Oil is first discovered in Saudi Arabia.

On March 3, 1938, an American-owned oil well in Dhahran, Saudi Arabia, drilled into what would soon be identified as the largest source of petroleum in the world. The discovery radically changed the physical, human, and political geography of Saudi Arabia, the Middle East, and the world.

Before the discovery, Saudi Arabians were largely nomadic. The country’s economy was based on tourism revenue from observant Muslims’ pilgrimages to the holy city of Mecca. After the discovery, Saudis established strong infrastructure dotted with wells, pipelines, refineries, and ports. Today, oil accounts for more than 92% of the Saudi budget.

Saudi Arabia is one of the largest producers and exporters of oil in the world. The lucrative petroleum trade fostered sophisticated diplomatic relations between Saudi Arabia and the West, as well as Japan, China, and Southeast Asia. Most industrialized nations depend on petroleum imports, and critics claim this allows Saudi Arabia to have an outsized role in some foreign policy decisions, especially those surrounding the Middle East. The discovery of oil also changed the demographics of the kingdom. Today, millions of foreign workers—from the U.S., India, Pakistan, Ethiopia, and the Middle East—live and work in Saudi Arabia.