The Persian Gulf has long stood at the centre of the global oil industry, home to some of the world’s largest hydrocarbon reserves. Over the past decade, petroleum activity has intensified, sharpening competition over control of resources.
A look at early visitors to the region and the history of oil discovery reveals why.
Age of the Abbasids
The earliest recorded civilisations appeared near its shores approximately five millennia ago, when the kingdoms of Elam and Sumer flourished at the head of the Persian Gulf in today’s southwestern Iran. Ghazban argues that they and their successors, the Assyrians and Babylonians, maintained relations with maritime communities along the southern coast.
As the Roman Empire became a major consumer of oriental goods such as spices, the Persian Gulf functioned as a principal trade route. The Arab-Persian maritime community further asserted itself after the establishment of the Abbasid Caliphate in the mid-8th century CE.
“The Caliphs and their prosperous elites became consumers of Oriental luxuries,” writes Ghazban, adding, “The Persians and the Arabs were the merchants and mariners who now brought a growing range of commodities from India and even China.”
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The fall of the Abbasid Caliphate reduced the region’s prosperity and long-distance trade. A revival came with the rise of Europe as an avid consumer of South Asian goods. “…a fierce contest of this lucrative traffic opened with the irruption of the Portuguese into the Indian Ocean and the Persian Gulf at the turn of the 16th century AD,” Ghazban notes.
Europeans in the Persian Gulf
The Portuguese seized several ports, most notably Hormuz. The Ottoman Empire followed, conquering Iraq and challenging Portuguese dominance.
By 1622, the East India Company had established a presence in India, and in subsequent centuries, the Gulf became one of the two “arteries”, as Ghazban calls it, of Britain’s trade with India. “Britain found it necessary to control the Persian Gulf… and successfully strove to establish a dominant position there during the 18th and 19th centuries.”
However, it was in the 20th century that Britain began searching for oil. Ghazban calls this “the latest and most dramatic stage in the history of the Persian Gulf.”
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The British in the Gulf
Britain established political control over much of the Gulf in the early 1800s, retaining it for over a century. By the mid-nineteenth century, the region’s strategic importance had grown, with Britain, Tsarist Russia, and the Ottoman Empire competing for influence.
“The rivalry between Britain and Russia turned Persia into a major issue in Great Power diplomacy. Lord Curzon… described Persia as one of ‘the pieces on a chessboard upon which is being played out a game for the domination of the world,’” notes author Daniel Yergin in The Prize (2008).
From the 1860s, Russia expanded through Central Asia, seeking influence and a warm-water port. “To Britain, Russia’s expansion was a direct threat to India,” writes Yergin.
Meanwhile, the commercial potential of oil became clear, driven by the invention of the combustion engine. In 1884, a British firm obtained an exploration concession near Bushehr, a city in Iran. “In the course of the following twenty years wells were dug in Deleki and Qeshm Island,” notes Ghazban—but without success.
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Yergin explains, “The end of the nineteenth century was marked by a worldwide boom in oil.”
Demand surged, supplies tightened, and prices rose further during the Boer War (1899). The internal combustion engine transformed warfare.
“The Wright brothers had made their first flight… in 1903… In the course of the war, Britain produced 55,000 planes; France, 68,000; Italy, 20,000; and Germany, 48,000. In its year and a half in the war, the United States produced 15,000 planes. Such proved to be the utility of what had, before the war, been dismissed as merely good sport,” writes Yergin.
Workers of the APOC in 1908 (Wikipedia)
The first major breakthrough came in 1908 at Masjed Soleyman in Iran. “The specific spot… was named for a nearby fire temple,” writes Yergin. Oil was struck at 1,109 feet, flowing at over 100 barrels per day. “This discovery”, notes Ghazban, “brought about the formation of the Anglo-Iranian Oil Company (AIOC) in 1909,” later British Petroleum.
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Yet, West Asia would not remain under European control alone. “The American companies were embarking on a campaign to develop new oil supplies worldwide.” Fear of depletion gripped the United States after World War I, drawing it ever deeper into global competition for oil in the Gulf.
Over the decades that followed, this competition would intensify, shaping commerce and conflict. As Yergin writes, “Over its entire history as an industry, oil has brought out both the best and worst of our civilization. It has been both boon and burden.”