In 1901, the first of the big Middle Eastern oil fields was detected in Iran by a British prospector named William Knox D’Arcy. He promptly bought exclusive rights to all of Iran’s petroleum from the Qajar king of the time, in exchange for a sum of cash stuffed immediately into that shah’s pockets, and a 16 percent royalty payable to the Iranian treasury later, a royalty to be calculated on “net profits” realized from Iran’s petroleum, not on the gross, which means that D’Arcy’s lease made no guarantees about how much money Iran ever stood to make from its oil.
