The History of Oil in the Middle East

Oil Discovered in Persia

May 26, 1908

Oil was first discovered in the Middle East in Persia by a British Company led by William D'Arcy. D'Arcy recieved a license to explore for oil 7 years earlier. Eventually, they struck a gusher more than 1100 feet below ground in Majid-i-Suleman, Persia (Iran).

Oil Found in Egypt

Mar 11, 1910

Production of Egyptian crude oil began in the Gulf of Suez, which is known as the Gemsa oil field. The field was originally discovered in 1869 offshore the southern province. Shell and BP formed a joint venture called Anglo Egyptian Oilfields (AEO) to further develop Gemsa.

Oil Discovered in Iraq

Jun 27, 1927

Oil was found near Kirkuk, Iraq, making it the first commercial find in that Arab country. BP started drilling the first oil well at Baba Gurgur, north of the oil-rich Kirkuk. BP was a shareholder in the Iraqi Petroleum Company.

California Arabia Standard Oil Company Formed

May 19, 1933

The Standard Oil of California gained the rights to explore for oil in Suadi Arabia. They then formed the California Arabia Standard Oil Company. This led to their first discovery at Damman No. 7 oil field, Saudi Arabia.

Largest Oil Deposit Found

Jul 2, 1951

Saudi Arabia discovered Ghawar Field, the largest oil field in the world. The field measures approx. 20 miles wide by 175 miles long. Ghawar accounts for over half of all the oil production in Saudi Arabia. It is owned and operated by the state- run oil company, Saudi Aramco.

Ban on Oil Exports

Nov 19, 1973

Arab oil producing nations banned oil exports to the United States following the outbreak of the Arab-Israeli War. Saudi Arabia, Libya and other Arab states announced a total ban on oil exports. Gas prices in the US rose from 25 cents to more than a dollar per gallon.

End of Oil Embargo

Mar 17, 1974

The oil ministers of Arab countries (not including Libya) announced the end of the oil embargo on the US. This was a huge relief for America, as gas stations threatened to close due to federal fuel policies and high prices. The US economy also began to stablize after extreme stock exchange losses due to the embargo.

Terrorist Attack on Saudi Oil Ministers

Dec 21, 1975

There was a terrorist kidnapping of Saudi oil minister, Sheik Ahmed Zaki Yamani and other ministers from an OPEC (Organization of the Petroleum Exporting Countries) gathering in Vienna, Austria. These oil ministers were taken to North Africa on a hijacked plane and ransomed for one billion dollars. Eleven people were taken hostage and three people were killed.

Iranian Revolution

Jan 25, 1978

The beginning of the Irqanian Revolution brought political instability and high oil prices. The Iranian Shah was overthrown by the extremist religious leader, Ayatollah Khomeini. This resulted in the second oil crisis in the US where prices skyrocketed and long gas lines formed.

Iraq-Iran War

Sep 22, 1980

The Iraq-Iran War lasted over seven years and brought oil production to a halt. The war began when Iraq invaded Iran, and struck oil refineries. This followed many years of conflict and border disputes.