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The paper assesses to what extent the development of the oil industry in Dammam urban region has contributed to the stimulation of further development in its surrounding areas. By analyzing data on industrial mix and location, it appears that development of industries relation to oil became highly polarized in the region. Facilitating the process of its trickling down towards smaller settlements in the form of affiliated industries would require further government intervention to upgrade their infrastructure so as to become more advantageous for private sector initiatives. In the absence of such intervention, people will continue to be pulled towards Dammam urban region and interregional disparities in levels of development will be further aggravated.