The story
On May 26, 1908, drillers working for the British financier William Knox D'Arcy strike oil at Masjed Soleyman in southwestern Persia (Iran). It is the first commercially significant oil discovery in the Middle East. The company formed to exploit it, the Anglo-Persian Oil Company, is founded in 1909 and later becomes Anglo-Iranian and then BP.
D'Arcy, who had made a fortune in Australian gold mining, bought a 60-year concession from Persia's Qajar shah in 1901 and spent years and most of his money on a hard search, led by the geologist George Reynolds. Oil was already a major industry, and navies were switching from coal to oil, which made secure supplies a matter of national power. In 1914 First Lord of the Admiralty Winston Churchill had the British government buy a majority stake in the company to secure fuel for the Royal Navy.
A refinery at Abadan, built in 1912, became one of the largest in the world. Iran gained little from the arrangement, and the royalties dispute fed anger against the foreign company, which led in 1951 to the nationalization under Prime Minister Mohammad Mosaddegh. In 1953 a coup backed by the British and American intelligence services overthrew Mosaddegh. The discovery also set off the search for oil in Iraq, Saudi Arabia, Kuwait and the Gulf, and that changed the economy and politics of the whole region.
Why it mattered
- It started the Middle East's oil age, which led to discoveries in Iraq in 1927 and Saudi Arabia in 1938.
- It tied Britain's navy and foreign policy to Gulf oil, shaping British policy in the region during and after World War I.
- Resentment of foreign control of Iranian oil fed the 1951 nationalization and the 1953 coup, with long effects on Iran's politics.
- It created a company, later BP, that became one of the world's largest oil firms.
Sources
- Anglo-Persian Oil Company Encyclopaedia Iranica
- Oil Discovered in Persia EBSCO Research Starters
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