The Birth of a Petroleum Dream

In the early 20th century, as the industrial revolution transformed global energy demands, an audacious British speculator named William Knox D’Arcy secured a concession from Persia’s Shah in 1901 that would alter geopolitics forever. For £20,000 upfront and 16% of future profits, D’Arcy obtained exclusive rights to explore, extract, and sell Persian oil for 60 years—a deal contemporaries dismissed as reckless given Persia’s political instability and untested geology.

The venture faced immediate hurdles. Harsh desert climates, frequent religious holidays halting work, and malfunctioning drilling equipment slowed progress to a crawl. Local tribes, resentful of foreign workers and sensing exploitation, launched endless harassment campaigns. By 1903, D’Arcy’s telegrams to his team oscillated between desperate (“Find oil yet?”) and resigned (“Slow down and pray more”). Shipments of pipes, shovels, and drilling gear—alongside rifles and ammunition for protection—poured into Persia as costs ballooned.

The Discovery That Changed Everything

After six years of fruitless drilling, D’Arcy’s financiers at Burmah Oil Company ordered a final attempt at Masjed Soleyman in 1908. On May 26, at 4 AM, their persistence paid off: a 75-foot gusher of crude erupted skyward. The coded telegram announcing the strike quoted Psalm 104:15—”oil to make his face shine”—masking the news from competitors.

This discovery proved transformative. Geologists soon identified Persia’s oilfields as among the world’s largest, containing reserves that could power empires. Yet the technical challenges were immense. Engineers like George Reynolds (described as having a mind of “solid English oak”) battled scorching heat, sandstorms, and the logistical nightmare of building a 130-mile pipeline to the Abadan refinery on the Shatt al-Arab waterway—a project completed in 1912 that birthed the modern Middle Eastern oil infrastructure.

The British Navy’s Fuel Revolution

The timing proved fateful. Britain’s First Sea Lord, Admiral John Fisher, had been advocating since 1901 for the Royal Navy to transition from coal to oil—a shift that promised faster ships and strategic dominance. Persia’s oilfields offered a solution to Britain’s critical vulnerability: its lack of domestic petroleum reserves.

When D’Arcy’s consortium faced financial collapse in 1914, Winston Churchill, then First Lord of the Admiralty, orchestrated the British government’s purchase of a 51% stake in the newly formed Anglo-Persian Oil Company (APOC). This bold move, debated fiercely in Parliament, ensured the Navy’s oil supply just weeks before World War I erupted. As Churchill later declared, “Mastery itself was the prize of the venture.”

The Seeds of Modern Conflict

The consequences rippled far beyond energy markets. The 1901 concession—originally a speculative gamble—became a blueprint for Western control of Middle Eastern resources. Persian nationalists grew increasingly resentful of foreign exploitation, sentiments that would culminate in the 1951 nationalization crisis and the birth of OPEC.

Meanwhile, Britain’s wartime maneuvers to protect its oil interests redrew the regional map. The 1916 Sykes-Picot Agreement secretly partitioned Ottoman territories between Britain and France, while contradictory promises to Arab leaders like Sharif Hussein of Mecca sowed lasting tensions. As U.S. advisor Edward House warned, these backroom deals were creating “a breeding ground for future wars.”

The Petroleum Age Dawns

By war’s end, oil’s strategic value was undeniable. Lord Curzon famously declared that the Allies had “floated to victory on a wave of oil,” while German failures were attributed to their reliance on coal. The APOC (later BP) became a corporate giant, its pipelines tracing new Silk Roads of energy across Asia.

Yet the human costs were profound. Persian workers labored under brutal conditions for minimal pay, while colonial administrators like Arnold Wilson struggled to bridge cultural divides. As Wilson noted, British contractors viewed agreements as binding legal documents, while Persians saw them as “statements of intent”—a clash of perspectives that foreshadowed later conflicts.

Legacy of a Gamble

Knox D’Arcy’s concession ranks among history’s most consequential business ventures, comparable to Columbus’ 1492 voyage in its global impact. It launched the petro-state model, entangled energy with geopolitics, and planted the roots of modern Middle Eastern instability.

Today, as nations grapple with energy transitions, the lessons endure: control of resources shapes empires, technological shifts redefine power, and short-term deals can have century-long consequences. The oil derricks of Masjed Soleyman marked not just a geological discovery, but the birth of our fossil-fueled world order.