The United Arab Emirates (UAE) was established 46 years ago when Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, Umm al-Quwain and capital city Abu Dhabi came together to form their own federation. It produced 3,188,000 barrels of oil a day in 2016, making it the number-eight oil producer in the world. It also has the seventh-largest proven oil reserves in the world.
Prior to the First World War and the Great Depression of the 1920s and 1930s, pearl hunting was the primary industry of the Trucial States, as the UAE was known back then. The fate of this industry was ultimately sealed with the introduction of cultured pearls, causing considerable hardship in the region.
Despite the British-led Iraq Petroleum Company (IPC) showing an interest in the region, it would be a long time before it would benefit from its suspected oil wealth. From 1935 onwards, concessions were signed to allow onshore exploration. First came the Anglo-Persian Oil Company (APOC), which would later become BP, but its 23.75% share in IPC meant it was bound by the Red Line Agreement and therefore prohibited from independently seeking oil interests in ex-Ottoman territory. ExxonMobil, which produces the premium circulating oil Mobil DTE Light, received its first oil concession in Abu Dhabi later in 1939, when it was the Standard Oil Company of New Jersey, but its involvement in IPC also hindered it.
The rulers of the Trucial States were therefore denied the wealth they saw being accumulated in nearby countries like Bahrain, Iran, and Saudi Arabia, although the signing of options at least generated some valuable revenue to relieve the suffering resulting from the collapse of the pearl hunting industry.
Eventually in 1950, the first oil well was drilled at Ras Sadr by an IPC operating company. Despite taking a year to drill the 4,000-metre deep hole, and the bill coming it at an eye-watering million pounds, the well was found to be dry. Fortunately, the exploration of offshore areas yielded some valuable finds, and a viable onshore source was finally found in 1962 in the form of the Murban No. 3 well.
Today, the UAE is estimated to be home to over nine million people, although only a fraction of these are Emirati citizens. Despite its continuing reliance on oil exports, the UAE does enjoy one of the most diversified economies in the Gulf Cooperation Council. In addition, Dubai is not just the UAE’s most populous city—it also plays a global role as an aviation and business hub.