The Discovery of Black Gold — Churchill's Gamble and 1908

Last time, oil was still no more than a “handy mud.” What dragged it to the center of the world was the age of smoke and iron — the Industrial Revolution. Machines devoured coal, and before long humanity began to crave a “lifeblood” more powerful still than coal. Our story moves to the British Empire at the close of the nineteenth century.

From coal to oil — Churchill’s decision

At the end of the nineteenth century, the seas of the world were ruled by the warships of the British Empire, driven by burning coal. But coal had its weaknesses. It was heavy and bulky, refueling was laborious, and it gave off a great deal of smoke.

Enter oil. Lighter than coal, it produced more power for the same weight, and it could be replenished faster. With less smoke, a fleet was harder to spot from afar — a real tactical advantage. Coaling a ship meant hundreds of sailors heaving coal by the sweat of their brows; with oil, you simply pumped it through a pipe. It would lengthen a warship’s speed and range at a stroke, while sharply cutting the burden of resupply. Around 1912, Winston Churchill — then in charge of the Royal Navy — made the historic decision to switch the fuel of Britain’s capital ships from coal to oil.

Here the British Empire ran headlong into a grave problem. Britain itself produces no oil. The fuel that held the lifeline of the Navy could not be drawn from its own soil — not a single drop. It would have to secure “an oil field of its own” beyond its borders, somewhere it could rely on for a steady supply. Churchill’s insistence on diverse sources of supply came precisely from seeing through this fragility.

The D’Arcy concession, and a drilling of despair

Britain set its sights on Persia (present-day Iran), then lagging in modernization.

One man had already moved first: the British businessman William Knox D’Arcy. In 1901 he had bought from the Shah of Persia a sweeping exclusive concession — the right to “search for, drill, transport, and sell” oil. This is the famous D’Arcy concession.

But between a slip of paper granting a concession and actually striking oil lay an endless distance. The engineers sent out dug their holes day after day in the scorching wilderness. Malaria, a brutal climate, friction with the locals — and above all, no matter how deep they dug, no oil came.

The vast sums of money had run dry, and D’Arcy alone could no longer carry the project. In time another oil financier put up the money and joined the venture, and at the very brink of withdrawal the last of the drilling was barely kept going. It was a single step short of everything ending.

History holds many such moments of “if only they had given up one step sooner.” Had the equipment been packed away that day on orders from home, Persia’s oil would not have been found, and the fate of the Middle East — and the shape of two world wars — might have been utterly different. That is how thin the ice was. The engineers digging their holes in the wilderness had no way of knowing they stood at a turning point of world history.

26 May 1908: the gusher that rose into the sky

26 May 1908, at Masjed-e Soleyman in southwestern Persia.

Before dawn, something stirred at the drilling site. With a roar, gas burst from the earth, and then black oil shot high into the sky — the moment the Middle East’s first commercial-scale oil field revealed itself. To a crew braced for retreat came a reversal that, quite literally, turned heaven and earth upside down.

On the strength of this discovery, the following year, 1909, the Anglo-Persian Oil Company was founded to operate the field. This was the parent body of BP (British Petroleum), which would grow into one of the world’s largest oil majors. And in 1914, under the lead of Churchill — bent on securing a stable supply of fuel for the Navy — the British government took a majority stake in the company. The state had placed a private firm’s oil field directly under its control.

An empire with its “lifeblood,” a fuse already laid

So the British Empire secured the oil to drive its Navy in the depths of far-off Persia. To Persia itself, only a sliver of that wealth fell, as “rent for the land.” The technology to drill it, the ships to carry it, the markets to sell it — all lay in foreign hands.

Oil was no longer waterproofing, nor medicine for mummies. It had become a strategic resource on which a nation’s survival depended — the lifeblood, you might say, of the modern state. And once it was lifeblood, to cut it off, to seize it, to monopolize it came to mean, directly, the power of a nation.

And we must not forget that already, at this point, “the countries that use oil” and “the countries where oil is found” had split into separate places. The ones that needed oil most were the industrial nations — Europe, and later America. But the ones where oil slept most abundantly lay far from those industrial nations, in the Middle East. The users and the holders did not coincide — this geographic dislocation is the deepest root of the hundred-year struggle over oil. Churchill’s gamble brought the British Empire power, but it also planted in the modern state a thirst it could never slake by itself.

This precarious arrangement would soon erupt into real violence. A few years after the 1908 gusher, humanity plunged into the first total war in history — the First World War. An age was beginning in which tanks, warships, and aircraft in the sky would roar in their hunger for oil. And before long the victors would lay rulers across the map and draw new borders upon the land of the Middle East. The story moves to the age of world war and partition.