It is no secret that the tension in the sociopolitical atmosphere in the Arab nations coincided with the period of discovery and extraction of oil in the Gulf. The nationalist themes of Arab unity and liberation from Western imperialism took center stage in the mid-twentieth century, which had a profound impact on the foreign-operated oil companies. This chapter discusses how the nationalists perceived oil and propagated oil among the Bahrainis, what impact it had on the oil companies, how the oil companies in response repainted oil as a modernizer, and the subsequent impact it had on the people that led to the rise of petrotopia in Bahrain, based on a literature review. The term “petrotopia” discussed herein indicates the petroleum-induced urban utopia and the utopian being. Many forces of the twentieth century projected oil towns and infrastructure as utopian, intentionally or unintentionally. The nationalists contemplating the liberation of oil from the Western hands, rejecting the Western hegemony, projected the services, infrastructure, and goods that the foreign employees enjoyed in oil towns as oil wealth that innately belonged to the citizens. This rather created a misunderstanding that the citizens were no less to use the Western infrastructure and goods; however, the nationalists only advocated that the oil wealth be used for the benefit of the citizens. On the other hand, oil companies went on advertising the facilities and services provided to the oil company employees in response to the accusations of the nationalists and to continue their smooth operation in the Gulf, which, along with the inaccessibility of the local people to the oil towns, created nostalgia for oil towns as utopias. Though the locals saw the oil towns as petrotopias, foreigners who visited them criticized them for being portrayed as suburbs or cities because they were isolated from city centers and lacked urban life. This paper unveils the ambivalence surrounding petrotopias in Bahrain and the fact that the fascination for urban fantasies and utopian visions in the Gulf dates back to the twentieth century.