The Persian Gulf was an important transportation route in antiquity but declined with the fall of Mesopotamia. In succeeding centuries control of the region was contested by Arabs, Persians, Turks, and Western Europeans. In 1853, Britain and the Arab sheikhdoms of the Persian Gulf signed the Perpetual Maritime Truce, formalizing the temporary truces of 1820 and 1835. The sheikhs agreed to stop harassing British shipping in the Arabian Sea and to recognize Britain as the dominant power in the gulf. These sheikhdoms thus became known as the Trucial States. An international agreement among the major powers in 1907 placed the gulf in the British sphere of influence.
Although oil was discovered in the gulf in 1908, it was not until the 1930s, when major finds were made, that keen international interest in the region revived. Since World War II the gulf oil fields, among the most productive in the world, have been extensively developed, and modern port facilities have been constructed. Nearly 50% of the world's total oil reserves are estimated to be found in the Persian Gulf. It is also a large fishing source and was once the chief center of the pearling industry. In the late 1960s, following British military withdrawal from the area, the United States and the USSR sought to fill the vacuum. In 1971 the first U.S. military installation in the gulf was established at Bahrain.
The long-standing Arab–Persian conflict in the gulf, combined with the desire of neighboring states for control of large oil reserves, has led to international boundary disputes. Iraq and Iran argued over navigation rights on the Shatt al Arab, through which Iran's main ports and most productive oil fields are reached. Iran and the sheikhdoms of Sharjah and Ras al-Khaimah contested ownership of the oil-rich islands of Abu Musa and Greater and Lesser Tunb at the entrance to the gulf. Iranian forces occupied these islands in Dec., 1971, infuriating Iraq. The much-contested rights over the Shatt al Arab led Iran and Iraq into an 8-year war in the 1980s (see Iran-Iraq War). In 1984 American and other foreign oil tankers in the gulf were attacked by both Iran and Iraq. The security of Persian Gulf countries was threatened throughout this war.
When Iraq invaded Kuwait in Aug., 1990, the Persian Gulf was once again a background for conflict. International coalition ground forces were stationed in Saudi Arabia and neighboring gulf countries in the Persian Gulf War (1991). Before Iraq was expelled from Kuwait in Feb., 1991, Iraqi soldiers set fire to over 500 Kuwaiti oil wells and dumped millions of barrels of oil into the Persian Gulf, causing an environmental crisis and threatening desalination plants throughout the area. The area again was the scene of warfare in 2003 when U.S. and British forces invaded Iraq. The Persian Gulf's vast oil reserves make the area a continuing source of international tension.