The Arabian Peninsula was an integral part of the classical world between the 4th millennium BC and 500 AD, benefiting from its location between the Nile Valley, Mesopotamia and the Indus Valley/India. This made it into a hub for commerce and cultural exchange. The southwest of the peninsula and the Gulf around Bahrain were particularly sophisticated. The proto-Arab language and the Arabic script developed into classical Arabic among these cultures.
Despite being the point of departure of Islam, the Peninsula played no significant role in the development of Islamic civilization. From the 8th to the 20th Century AD, its overall role in world history remained marginal. This only changed with the discovery of oil in the 1930s.
The settlements along the southern shore of the Gulf always retained some prosperity because of their location on sea-trading routes between Mesopotamia and India. Though this trade was taken over by successively the Portuguese (16th Century), the Dutch (17th Century) and the British (18th and 19th Century), the ports of Bahrain, Kuwait and Muscat managed to profit by serving local markets and specializing in the slave trade. Another source of considerable income was pearling, until the 1930s. The discovery of oil came just in time to supplement the loss of pearling income.
After the period of the prosperous Yemeni kingdoms, South and West Arabia lapsed into subsistence agriculture, and the small trading posts (Mocha, Aden) established by European powers on the coast did little to develop the hinterland. Mecca, Medina and the port of Jeddah (i.e. the Hejaz) remained relatively prosperous and connected to the rest of the (Islamic) world thanks to pilgrims, but generally the peninsula stagnated until the end of Ottoman rule in the early 20th Century.
The central areas of the peninsula, from the Syrian desert to the Empty Quarter, had the least means to support a population. These areas were the theatre of tribal strife, often prompted by spells of drought and resulting migratory shifts. From the 18th Century onwards, the House of Al Saud progressively established its dominion over the peninsula, based on religious (Wahhabi) legitimacy, political skill and historical links to other ruling families of the Gulf. They only conquered the Hejaz in 1924. Their conservative interpretation of religion limited contacts between the population and the outside world. Oman and Yemen kept their own distinctive cultural make-up.
At the turn of the 20th Century, the Arabian Peninsula was one of the least developed regions of the ‘old world’. With the fall of the Ottoman Empire, British hegemony over the region was unquestioned. But the British made no attempt to develop the societies of the peninsula, as their main interest was to ensure that these societies did not disrupt their relations with their Indian colonies. This all changed with the discovery of oil.