Did you know? The origin of the barrel as the unit of measurement for oil is directly linked to the early days of the oil industry in Pennsylvania, United States, in the mid-nineteenth century. We explain everything in this article.
Before the exploitation of oil, Americans already used barrels of different capacities to transport all kinds of goods such as salted fish, whiskey, tar or whale oil, etc. When the first oil well was drilled in Titusville, Pennsylvania, in 1859, a way had to be found to store and transport the black gold that came out of it. In the beginning, people used everything that could contain liquid: barrels made of reclaimed wood, whisky barrels, etc. The problem was that these containers were not all the same size. One producer could send oil in a 36-gallon barrel, another in a 40-, 42- or 45-gallon barrel. This made trading, contracting, and accounting extremely complicated.
Standardization to 42 gallons
To put an end to this confusion, the region’s oil producers met in 1866, and agreed that the standard barrel for oil would be 42 gallons. This number was not chosen at random. First, it’s convenient for transportation: A 42-gallon barrel had a size and weight that allowed a man to handle it to roll and load onto carts or barges. Secondly, this choice corresponds to the habits of the trade since this volume corresponded to units of measurement already used in other shops. It formed half a cord of wood, or corresponded to convenient lots for coopers. Finally, the measurement of the barrel guaranteed an included margin, especially since legend has it that the capacity of 42 gallons made it possible to deliver to the buyer a “full barrel” of 40 gallons, while leaving 2 gallons for evaporation and the inevitable leaks during transport. This private standard has become the rule. In 1872, the Petroleum Producers’ Association officially adopted the 42-gallon barrel as the standard.
A unit that has survived the modernization of transportation’s modes
Today, oil is no longer transported in wooden barrels, but in pipelines (oil pipelines) or giant tankers. However, the barrel remained the reference unit for several reasons, including historical inertia and habits since all contracts, financial markets (such as Brent or WTI) and statistics were based on this unit. Also, changing units would have required changing millions of contracts, software, measurement instruments and habits around the world. The cost would be enormous. The oil world therefore considered it more interesting to keep this historical unit of measurement.
