<P> In 1925, Holmes signed a concession with the sheikh of Bahrain, allowing him to search for oil there . He then proceeded to the United States to find an oil company that might be interested in taking on the concession . He found help from Gulf Oil . In 1927, Gulf Oil took control of the concessions that Holmes made years ago . But Gulf Oil was a partner in the Iraq Petroleum Company, which was jointly owned by Royal Dutch / Shell, Anglo - Persian, the Compagnie Française des Pétroles, and "the Near East Development Company, representing the interests of the American companies . The partners had signed up to the "Red Line Agreement" which meant that Gulf Oil was precluded from taking up the Bahrain concession without the consent of the other partners; and they declined . Despite a promising survey in Bahrain, Gulf Oil was forced to transfer its interest to another company, Standard Oil of California (SOCAL), which was not a bound by the Red Line Agreement . </P> <P> Meanwhile Ibn Saud had dispatched American mining engineer Karl Twitchell to examine eastern Arabia . Twitchell found encouraging signs of oil, asphalt seeps in the vicinity of Qatif, but advised the king to await the outcome of the Bahrain No. 1 well before inviting bids for a concession for al - Hasa . To the American engineers working in Bahrain, standing on the Jebel Dukhan and gazing across a twenty - mile (32 km) stretch of the Persian Gulf at the Arabian Peninsula in the clear light of early morning, the outline of the low Dhahran hills in the distance were an obvious oil prospect . </P> <P> On 31 May 1932, the SOCAL subsidiary, the Bahrain Petroleum Company (BAPCO) struck oil on Bahrain . The discovery brought fresh impetus to the search for oil on the Arabian peninsula . </P> <P> Negotiations for an oil concession for al - Hasa province opened at Jeddah in March, 1933 . Twitchell attended with lawyer Lloyd Hamilton on behalf of SOCAL . The Iraq Petroleum Company represented by Stephen Longrigg competed in the bidding but SOCAL was granted the concession on 23 May 1933 . Under the agreement, SOCAL was given "exploration rights to some 930,000 square kilometers of land for 60 years". Soon after the agreement, geologists arrived in al - Hasa and the search for oil was underway . </P>

When did the middle east start producing oil