The conception of space is fundamental to our understanding of the world. Dividing land into exclusive territories, such as sovereign states, is only one of many ways to think about space, and its historical expansion in the world during modern times needs to be examined in sufficient depth. This paper aims to bring in the newest insights from the field of environmental history to Middle East Studies by examining how the modern conception of territoriality evolved in the Persian Gulf in relation to water, and later oil. The case in point is an oasis called Buraimi located in the Southeastern corner of the Arabian Peninsula. In 1952, a border dispute over the oasis broke out between Saudi Arabia, Abu Dhabi and Oman. With a growing expectation of oil reserves, the former was supported by America, whereas the latter two was under the informal empire of Britain. The case was brought to an international arbitration tribunal in Geneva; but the debates there revealed a picture that was fundamentally at odds with the modern norm of sovereign territoriality. In contrast to the claims of the disputants, the ongoing research suggests that the Buraimi oasis had not been divided into mutually exclusive territories, but the water of the oasis had been traditionally shared by various local tribes. However, the emerging hope of the oil in the mid-1950s pressed Britain to withdraw from the arbitration tribunal and to capture oasis by force. The forceful closure of the Buraimi dispute also witnessed the making of a modern map by the British Foreign Office. The map, which became the basis of the later postcolonial states of the region, was so complex with a number of enclaves and areas of joint jurisdiction that even the Foreign Office officials called it a ‘jig saw puzzle’.