Big Oil and the Supermajors
Big Oil is the name for the largest listed oil companies: ExxonMobil, Shell, BP, Chevron and TotalEnergies. The world's largest oil company, Saudi Aramco, is state-run and sits outside the term.
Big Oil is the name used for the world's largest listed oil companies, such as ExxonMobil, Shell, BP, Chevron and TotalEnergies. Some lists add Eni. The world's largest oil company, state-run Saudi Aramco, sits outside the term.[19] The phrase spread through the press from the late 1960s and is usually meant critically. The companies have two origins: the pieces of Standard Oil, broken up by the US Supreme Court on 15 May 1911, and the European groups formed to compete with it.[2]
The 1911 Break-Up and the New Rivals
The court split Rockefeller's company into dozens of parts. The largest were Standard Oil of New Jersey, Standard Oil of New York and Standard Oil of California, which later became Exxon, Mobil and Chevron. Standard's hold on the industry had started to slip before the ruling, though, and the clearest reason was in Texas.
The first person to believe there was oil under Spindletop hill near Beaumont was Pattillo Higgins, a local businessman looking for natural gas for his brickyard. Anthony Lucas, an engineer who specialised in salt domes, took over the drilling. He ran out of money, found new backers, and on 10 January 1901 the well blew in at an estimated 100,000 barrels a day. Standard could not dominate the field as it had in the East, because Texas antitrust law and public hostility stood in its way. The companies that grew out of the field were Gulf Oil and Texaco. Gulf was backed by the Mellon family of Pittsburgh and took its name in 1907.[3]
Europe's Answer: Shell and Anglo-Persian
Europe produced two separate challengers. Royal Dutch was founded in the Netherlands in 1890 to work an oilfield in Sumatra. In London the merchant Marcus Samuel was shipping Russian kerosene to Asia through the Suez Canal in his tanker Murex, and in 1897 he founded Shell Transport and Trading. Henri Deterding, an Amsterdam banker who joined Royal Dutch in 1896, rose to run it and built up a tanker fleet. Neither company could carry a price war with Standard alone. In a merger arranged by Calouste Gulbenkian in April 1907, Royal Dutch took 60% of the stock and Shell 40%. They stayed two legal companies and ran the business as one group.[4]
The second challenger started in Persia. In 1901 the British businessman William Knox D'Arcy obtained a 60-year prospecting concession from Shah Mozaffar al-Din. Years passed without result, and his backer Burmah Oil ordered the work stopped. The geologist George Reynolds delayed carrying out the order and struck oil at Masjed Soleiman on 26 May 1908. The Anglo-Persian Oil Company was set up on 14 April 1909 to work the field. When it needed fresh capital in 1914, the British government bought 51%, and the Royal Navy gained a secure supply in return.[5] The company became Anglo-Iranian in 1935 and British Petroleum in 1954.
Achnacarry Castle, 1928
By the late 1920s these companies were wearing each other down across the world market. The United States, Venezuela, Romania and the Soviet Union were all flooding it with oil. Deterding had a particular grudge against Russian oil, because the Soviets had nationalised his holdings in Baku. When Standard of New York kept buying it, he cut prices, the fight spread to many markets and prices collapsed.[1][4]
To make peace, Deterding rented Achnacarry Castle in the Scottish Highlands for August 1928 at £3,000. His guests included Walter Teagle of Standard of New Jersey, Sir John Cadman of Anglo-Persian and William Mellon of Gulf. Two weeks of talks produced a 17-page document that was agreed but not signed. Under this "As-Is" text, each company would keep its 1928 share in each market and could grow only as total demand grew. Prices would be calculated from the Gulf of Mexico price plus freight. The US domestic market was left out because of antitrust law.[1]
Another deal that summer concerned the Middle East. On 31 July 1928 at Ostend, the partners in the Turkish Petroleum Company marked the former Ottoman lands with a red line on a map and agreed not to seek concessions independently inside it. Four partners took 23.75% each of the crude, and Gulbenkian kept the remaining 5%.[6]
The Achnacarry arrangement did not hold for long. Producers outside it undercut the price, and oil from East Texas swelled supply from around 1930. The text was rewritten several times. Jersey Standard gave notice in 1938, and what was left ended with the war in September 1939.[1]
The Seven Sisters
After the Second World War the American companies argued that the Red Line Agreement no longer applied. The case with Gulbenkian was settled out of court, which let Standard of New Jersey and Socony-Vacuum into Aramco in Saudi Arabia.[6]
A crisis in Iran then brought the companies to one table. Led by Mohammad Mosaddegh, the Iranian parliament nationalised Anglo-Iranian in March 1951. An embargo kept Iranian oil off the market. A coup backed by the CIA and MI6 removed Mosaddegh in 1953. To bring the oil back, the US State Department proposed a consortium, and the 1954 structure was divided as follows: BP 40%, Shell 14%, Gulf, Standard of New Jersey, Standard of New York, Standard of California and Texaco 8% each, and France's Compagnie Française des Pétroles 6%.[5][7]
Leaving the French partner aside, those seven companies dominated international oil trade from the mid-1940s to the 1970s. The name Seven Sisters came from Enrico Mattei, head of Italy's state company Eni, who had tried to join the group, was turned down and then spread the phrase. Anthony Sampson's 1975 book The Seven Sisters made it common usage. Before 1973 the group is estimated to have controlled about 85% of the world's oil reserves.[2][7]
The Producers Move
The seven companies' power rested on their right to announce the price. In February 1959 they cut the posted price of Venezuelan and Middle Eastern crude by 10%, and producer governments' income was tied to that price. Venezuela's oil minister Juan Pablo Pérez Alfonzo and the Saudi oil official Abdullah Tariki agreed in Cairo on a consultation commission. When the companies cut Middle Eastern prices again in August 1960, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela founded OPEC in Baghdad on 14 September 1960.[8]
The balance shifted in the 1970s. Libya reached a deal with Occidental in 1970 that gave it 58% of the profit, and other producers demanded the same. In the 1973 shock the producers set the price themselves, and revenue per barrel rose from about $3 to $12.[8] Concessions then passed to the state one by one. Iraq nationalised in 1972 and Venezuela on 1 January 1976, and Saudi Arabia bought all of Aramco in 1980. Between 1973 and 1982 the majors' crude production fell from 30 million to 15.2 million barrels a day, and their output from reserves they controlled fell from 25.5 million to 6.7 million.[9]
How the Supermajors Formed
The seven first became six in the 1980s. When the corporate raider T. Boone Pickens began accumulating Gulf shares, its management looked for a friendly buyer and in March 1984 accepted about $13.2 billion from Standard Oil of California. Gulf disappeared as an independent company in 1985.[3]
On 13 February 1998 the Morgan Stanley analyst Douglas Terreson published a report called The Era of the Super-Major, which predicted consolidation among the large companies.[2] That year BP merged with Amoco, the former Standard of Indiana. Exxon and Mobil followed in 1999, putting two pieces split apart in 1911 back under one roof. Total bought Petrofina and then Elf Aquitaine. BP took ARCO in 2000, Chevron merged with Texaco in 2001 and Conoco with Phillips in 2002.[2] The mergers are often put down to the low oil prices of 1998, but a 1999 industry conference report said prices were not a key factor, and pointed to cost savings and the need to take on large projects.[10]
| Company | Origin | Defining mergers |
|---|---|---|
| ExxonMobil | Standard of New Jersey, Standard of New York | Exxon and Mobil (1999), Pioneer (2024) |
| Chevron | Standard of California | Gulf Oil (1984), Texaco (2001), Hess (2025) |
| Shell | Royal Dutch, Shell Transport | BG Group (2016) |
| BP | Anglo-Persian | Amoco (1998), ARCO (2000) |
| TotalEnergies | Compagnie Française des Pétroles | Petrofina (1999), Elf Aquitaine (2000) |
Who Actually Holds the Reserves
The mergers did not bring back the old weight. On a commonly used count the supermajors control about 6% of global oil and gas reserves, and OPEC and state companies about 88%. In 2007 the Financial Times applied the label "new Seven Sisters" to Saudi Aramco, Gazprom, CNPC, NIOC, PDVSA, Petrobras and Petronas.[2] What the supermajors kept is capital and technology. They can take on deepwater fields and LNG projects worth tens of billions of dollars, and their refining and trading arms follow the oil from the well to the pump.
The World's Largest Oil Companies
The order depends on the yardstick. Energy Intelligence's list of November 2025, which combines oil and gas reserves, output, refining capacity and product sales, puts Saudi Aramco first, then Iran's NIOC, China's CNPC, ExxonMobil, Russia's Rosneft, Venezuela's PDVSA, Gazprom, Chevron, Shell and Abu Dhabi's ADNOC.[19] Seven of the ten are owned or controlled by their governments, and BP and TotalEnergies miss the top ten. By market value Saudi Aramco again leads, followed by ExxonMobil, Chevron and Shell.[20]
Accidents and Tanker Vetting
Accidents account for much of the name's bad reputation. On 24 March 1989 the Exxon Valdez went aground in Alaska, leading to the US law that ended the single-hull tanker. On 20 April 2010 the Deepwater Horizon rig exploded at BP's Macondo well in the Gulf of Mexico. Eleven people died and, on the US government's estimate, about 4.9 million barrels of oil went into the sea. By 2018 it had cost BP more than $65 billion.[11]
Oil Major Approval in Shipping
In shipping, these companies' names are tied to a specific inspection system. OCIMF, the body set up by the oil companies, launched the SIRE programme in 1993 over concern about substandard tankers. Accredited inspectors examine the ship, the report goes into a shared database, and charterers, terminal operators and government bodies can obtain it. The programme is voluntary. Each recipient decides for itself whether to accept the report and whether to charter the ship.[12] For an owner, approval means access to the big charterers' cargoes and has a direct effect on freight income. Port state control is separate, an official inspection run by governments.
Recent Deals and Leadership Changes
A second merger wave began in 2023. ExxonMobil bought Pioneer Natural Resources, a large Permian Basin producer, for about $59.5 billion, closing on 3 May 2024.[13] Chevron's purchase of Hess sat in arbitration for a long time, because the real prize was Hess's stake in the Stabroek block off Guyana and the block's operator ExxonMobil claimed a right of first refusal. Chevron won and completed the deal of about $53 billion in July 2025.[14]
In June 2025 reports said Shell was interested in BP. Shell formally stated it had no intention of bidding, which under UK takeover rules barred it from acting for six months.[15] BP, then looking for its fourth CEO in six years, chose Meg O'Neill, head of Woodside and a veteran of more than two decades at ExxonMobil. She took over on 1 April 2026, the first woman to run a supermajor.[16] That side of the industry is covered in women in the oil and gas industry.
The Hormuz Crisis and Profits
2025 was a weak year for these companies. ExxonMobil's profit fell from $33.7 billion to $28.8 billion on lower crude prices.[17] When war with Iran began at the end of February 2026 and the exit from the Persian Gulf largely closed, the picture reversed. In the third quarter Shell's adjusted earnings rose from $5.43 billion a year earlier to $10.81 billion, and TotalEnergies' adjusted net income from $4 billion to $9.1 billion. Much of that came from refining, with Shell reporting a margin of $42 a barrel and TotalEnergies $33.2. The cost showed in production, with Shell's oil and gas output down 17% over the first nine months.[18]
Frequently asked questions
What is Big Oil?
Big Oil is the name used for the world's largest listed oil companies, such as ExxonMobil, Shell, BP, Chevron and TotalEnergies.
What are the largest oil companies in the world?
In Energy Intelligence's list of November 2025 the top five are Saudi Aramco, NIOC, CNPC, ExxonMobil and Rosneft. Among listed private companies ExxonMobil is the largest, followed by Chevron and Shell.
Are Big Oil and OPEC the same thing?
No. Big Oil refers to listed private companies, and OPEC is an organisation of producer countries. State companies such as Saudi Aramco are not counted as Big Oil.
Which companies are the supermajors?
ExxonMobil, Chevron, Shell, BP and TotalEnergies are the core. Eni appears on some lists. There is no formal membership.
Who were the Seven Sisters?
Anglo-Persian (BP), Shell, Standard of New Jersey (Exxon), Standard of New York (Mobil), Standard of California (Chevron), Gulf and Texaco. Gulf and Texaco later became part of Chevron.
How is Big Oil related to Standard Oil?
ExxonMobil and Chevron descend from pieces of Standard Oil, broken up in 1911, and BP carries part of that legacy through Amoco. Shell and BP themselves began as Standard's rivals.
Sources
- Daniel Yergin. The Prize: The Epic Quest for Oil, Money, and Power, 1991, Achnacarry chapter.
- Wikipedia. Big Oil.
- Wikipedia. Spindletop; Gulf Oil.
- Wikipedia. Shell plc; Henri Deterding.
- Wikipedia. Anglo-Persian Oil Company.
- Wikipedia. Red Line Agreement.
- Wikipedia. Seven Sisters (Oil Companies).
- Wikipedia. OPEC.
- Wikipedia. Nationalization of Oil Supplies.
- Offshore Magazine. Supermajors Jostling for Influence in World-Class Petroleum Plays, 1999.
- Wikipedia. Deepwater Horizon Oil Spill.
- OCIMF. SIRE programme page.
- ExxonMobil. ExxonMobil Completes Acquisition of Pioneer, 3 May 2024.
- Law360 and PrivSource. Reports on the Chevron and Hess transaction, 2025.
- Fortune. Shell Denies BP Mega Merger, 25 June 2025.
- Fortune. BP's Meg O'Neill, 18 December 2025; World Oil, 18 December 2025.
- Oil & Gas Journal. ExxonMobil Post 2025 Earnings of $28.8 Billion.
- MercoPress. Shell and TotalEnergies Double Profits on a Refining Boom, 30 October 2026.
- Energy Intelligence. Top 100: Global NOC & IOC 2026 Rankings, press release, 24 November 2025.
- CompaniesMarketCap. Largest Oil and Gas Companies by Market Cap.
