The development of the international petroleum industry has been influenced by the taxation policies of the United States, the home country of most of the major integrated international petroleum producers. These corporations are multinational in the most general definition of the word, operating in over 100 countries and centrally involved in every aspect of the world petroleum industry. They are also multinational in the sense that commonly the same companies involved in the primary production in one set of the countries, also conduct major refining and marketing operations in other consumer countries. The first two parts of this study sketch the general industrial structure of the international petroleum industry and examine its position as a major source of United States foreign investments. In the third section we discuss the tax structure of the U.S. as it applies to foreign investment, and in particular to the petroleum industry. Income and tax data by country are analyzed in the fourth section to show how the petroleum companies have accommodated their organization to the tax environment. In the fifth and sixth parts of the paper, some of the future developments of the international petroleum industry are analyzed and some of the prospective U.S. tax policies are evaluated.petroleum industry, foreign investment, U.S.