The Iranian oil industry is the oldest in the Middle East, with oil seeps known since ancient times but systematic exploration beginning in the early 20th century. In 1901, William Knox D'Arcy obtained an oil concession from Iran and the first well was unsuccessfully drilled, but in 1908 oil was struck in commercial quantities at Masjed-e Soleymān. This led to the formation of the Anglo-Persian Oil Company in 1909, which built Iran's first oil refinery near Abadan in 1912 with a capacity of 2,400 barrels per day, steadily increasing production through 1918.

1. History of Iranian Oil discovery
The Iranian oil industry is the oldest in the Middle East. Although the occurrence of
numerous seeps in many parts of Iran had been known since the ancient times, the
systematic exploration and drilling for oil began in the first years of the 20th century.
In 1901 William Knox D’Arcy, who had made a fortune in the Australian gold rush during
the 1880s, obtained an oil concession from the Iranian. The first unsuccessful well was
drilled at a locality called Čāh-e sorḵ, near Qaṣr- e-Širin. After years of efforts and
expenditures, oil in commercial quantities was struck at Masjed-e Soleymān, situated in
southwestern foothill of the Zagros Mountains (the Dezful basin), in May 1908. After this
discovery, the Anglo-Persian Oil Company (APOC) was formed in 1909 (the name was
changed to Anglo-Iranian Oil Company [AIOC] in 1935). The company purchased a
piece of land on the island of Ābādān and started the construction of a refinery with an
initial capacity of 2,400 barrels per day (120,000 ton per year). This refinery was
completed in 1912, and in 1914, the British government acquired a controlling interest in
the APOC. Given the British navy’s requirement for fuel, the refinery’s capacity was
steadily increased to around 20,000 barrels per day (one million tons per year) by 1918.
At this time, production of crude oil had also reached 23,600 barrels per day.