History of the petroleum industry

While the local use of oil goes back many centuries, the modern petroleum industry along with its outputs and modern applications are of a recent origin. Petroleum's status as a key component of politics, society, and technology has its roots in the coal and kerosene industry of the late nineteenth century. One of the earliest instances of this is the refining of paraffin from crude oil. Abraham Gesner developed a process to refine a liquid fuel (which he would later call kerosene) from coal, bitumen and oil shale; it burned more cleanly and was cheaper than whale oil. James Young in 1847 noticed a natural petroleum seepage when he distilled a light thin oil suitable for use as lamp oil, at the same time obtaining a thicker oil suitable for lubricating machinery. The world's first refineries and modern oil wells were established in the mid-nineteenth century. While petroleum industries developed in several countries during the nineteenth century, the two giants were the United States and the Russian Empire, specifically that part of it that today forms the territory of independent Azerbaijan. Together, these two countries produced 97% of the world's oil over the course of the nineteenth century.^[1]

The use of the internal combustion engine for automobiles and trucks in the turn of the twentieth century was a critical factor in the explosive growth of the industry in the United States, Europe, Middle East and later the rest of the world. When diesel fuel replaced steam engines in warships, control of oil supplies became a factor in military strategy—and played a key role in World War II. After the dominance of coal waned in the mid-1950s, oil received significant media coverage and its importance on modern economies increased greatly, being a major factor in several energy crises.

The concern of oil reserve depletion has brought new developments to light such as commercial-scale fracking and the increasing usage of cleaner energy. In the twentieth century issues of air pollution led to government regulation. In the early twenty-first century, environmental issues regarding global warming from oil and gas (in addition to coal) makes the industry politically controversial.