Following the quadrupling of oil prices agreed by Opec at the end of 1973 in the wake of the Arab oil embargo, interest in the Middle East shifted to the economic opportunities emerging in the Gulf. Political issues were outweighed by the great boom in Arab oil export earnings and concerns about the impact of petrodollar surpluses on Western economies.

Arab oil exporting nations were courted around the world as governments and companies competed for some of the most valuable contracts in history. Within the Middle East, new banks and companies were established to cope with demand for financial and construction services. And a major inflow of expatriate labour to the Gulf began.

At MEED, the only weekly magazine devoted to reporting on economic developments in the region, a major expansion of editorial and commercial activities was initiated to cope with the demand for information about the Middle East.

Inspired by Opec’s success, Gulf states started to nationalise their oil industries. Huge infrastructure projects, including the twin industrial cities of Jubail and Yanbu in Saudi Arabia, were launched. In a drive to diversify sources of income away from oil, refineries and new industries, including Dubai Aluminium Company (Dubal) and the first Saudi heavy industrial schemes, were given life.

Then, in 1977, Egypt’s President Anwar Sadat announced a visit to Israel in a unilateral break of the Arab embargo on the Jewish state. For a brief period, Middle East peace seemed within reach, but these hopes were quickly dashed as every other Arab country not only refused to follow Cairo’s lead but imposed sanctions on Egypt.

Meanwhile, on the north side of the Gulf in 1978, it became evident the shah of Iran was in serious trouble. Massive street demonstrations culminated in the shah’s departure into permanent exile, the end of the Pahlavi dynasty’s rule and the arrival in Tehran of Ayatollah Khomeini. On 11 February 1979, control of the state passed formally to the revolutionary movement.

Few paid attention to developments in Baghdad, still furious after being forced to share sovereignty over the Shatt al-Arab with Iran in the 1975 Algiers agreement. In 1979, Saddam Hussein became president of Iraq.