Oil—Discovery and Production in the Persian Gulf (1900–1945)

Abstract

A hundred or so years ago, at the turn of the century, oil was not a critical input for the global economy and even less so for the economic and political affairs of the Persian Gulf and the greater Middle East. To state the obvious, oil became an inseparable part of the Middle East region’s fabric as it rose to global importance as a commodity, and the region became a significant supplier of oil to world markets, with oil revenues contributing a large share of the region’s total export revenues. During the twentieth century, the global importance of oil increased as oil became an important fuel for transportation, a use where it had little competition. Oil replaced coal in boilers of ships and in locomotives of trains, was used to power the first automobiles, and then fueled airplanes, powered industrial furnaces, provided electricity, and even heated homes and commercial buildings. While oil had little competition in powering automobiles and airplanes, its primary competitor in other uses was coal, a fuel that is dirty and more costly to transport, and to a lesser extent natural gas, the cleanest of the hydrocarbon fuels, which became steadily easier to transport to markets and thus became a growing competitor to oil. Although there was competition from other fuels—coal, natural gas, hydropower, nuclear, and renewables—the share of oil in global primary energy consumption continued to increase, especially after World War II.