In 1927 a team of British geologists was drilling near Kirkuk, 150 miles north of Baghdad, when black crude oil and gas gushed violently to the surface with a thunderous sound, carrying rocks fifty feet above the derrick. In what oil hands call a "blowout"—losing control of a live oil well—the countryside was drenched with oil, and poisonous gas filled the air. Two drillers lost their lives, and whole villages in the area were threatened. Approximately seven hundred tribesmen were recruited to build dikes and walls to try to contain the flood of oil. In the end it took nine days to bring the well under control.

While the 1927 blowout caused destruction, there was also widespread celebration at the first discovery of a major oil reserve in Iraq. This event foreshadowed a future for Iraq in which oil would bring both ruin and prosperity. Oil has played a...