Teagle has been accused of contributing to Nazi Germany during World War II through his involvement with German chemical company IG Farben.

As a director of IG Farben's American subsidiary, he allied Standard Oil with the German company and conducted research jointly.

Standard Oil supplied information to IG Farben on how to manufacture tetraethyl lead and synthetic rubber, both critical resources to the war effort.

[citation needed] In 1938, under Teagle's leadership, Standard Oil and its British subsidiaries supplied five hundred tons of tetraethyl lead to Germany's Luftwaffe.

By 1934, Standard Oil, under Teagle, also supplied Japan with large quantities of this critical aviation gas component, including to Japanese forces in Japan-occupied Manchuria.

[8] In a memorandum dated October 24, 1934, Chief of the Division of Far Eastern Affairs Stanley K. Hornbeck discussed his meeting with Teagle to U.S. President Franklin D. Roosevelt, and how Teagle was also uncooperative with U.S. recommendations and was given special treatment by the Japanese government, which made him and his company less subjected to Japan's national businesses regulations than they did other companies.

Because of the patents it had sold to Germany, Standard Oil also interfered with America's production of synthetic ammonia (for use in explosives), acetic acid (another crucial war material), and methanol (another fuel additive).

Standard and Teagle, again protecting IG Farben's patents, had also worked to prevent the US military from obtaining paraflow, a crucial high-altitude lubricant used in fighters and bombers.

Faced with a United States Department of Justice investigation, Teagle convinced President Franklin D. Roosevelt that a suit would hurt the war effort, instead choosing to pay an out-of-court fine.

The result was a fall in public favor for Standard Oil and the resignation of Teagle in 1942, one year short of the mandatory retirement age.

Standard's oil shipments from the United States to Spain were briefly halted in January 1944 due to American public pressure, then began again in May 1944.