From the 16th century to as late as the early 20th century the Middle East had a great impact on the trade of antique carpets as well as the markets that produced them.
Any oriental rug that was imported into Europe had a high probability of traveling through the Middle East while Persian rugs were commonly traded as well. The history of the rug dates back to many years BC (with the oldest rug dating back to the fourth or fifth century B.C.), but rugs did not find themselves used on a grand scale until the 16th century when they replaced the every day straw rug that was used in Europe.
Portugal's possession of the island of Hormuz in 1514 would give the country a major advantage in the Persian rug trade, and also made Persia uneasy regarding the Portuguese presence. In 1553, England would enter the rug trade with the establishment of what would become known as the Muscovy Company. The Muscovy Company sought to import oriental rugs and other riches via a northern route and required passage through Iran, which was granted until the northern route was abandoned in 1581.
During the early 1600s, Persia (Modern day Iran) acted as a middleman for the purchases of rugs on behalf of Polish royalty from Persia. The English East India company was founded in 1600 and would later threaten Portuguese supremacy of the India trade. In 1615, the first trade for Persian silk was established between England and Persia despite Portugal's best efforts to intercept the ship. England now threatened to gain dominance in both the Indian and Persian trade markets.
By 1619, Portugal demanded that Persia no longer trade with England. Persia requested and obtained the help of England, and by 1621, Persia had regained control of the island of Hormuz due to the English assistance. This would be the beginning of many wars between European nations over trade routes and dominance for quite some time. In 1722, however, the Afghans would invade Persia and trade to all of Europe would be interrupted.
The Dutch, English and French abandoned all of their trading posts along the Arabian Gulf due to the instability of Persian rule and the wars sparked in Europe. The rug trade had all but died until the reign of Karim Kahn Zand from 1750 until 1779. During this time, the British were persuaded to resume trade with Persia. Persian silk was incorporated into European fashion and was used for clothing as well as rugs.
Trade flourished until the 1860s, when there was an outbreak of silkworm disease that devastated the Persian silk industry. Persia attempted to use cotton as a cash crop at the time but these attempts would fail due competition from America and Egypt. Persia's economy would continue to decline as the European and American textile industries would continue to produce higher quality products and Persia faced wars with England and Russia.
It was in the ending years of the 19th century that the Middle East would return to glory in the carpet industry due to investments by local and foreign partners. To this day, these rugs are Iran's most profitable export aside the oil industry. The rugs dramatically increased in size, becoming much larger and the industry flourished due to the numerous large investments by capitalists, both locally and abroad.
Foreign investment in the Persian textile industry would remain steady until the end of the 1920s when Iran saw a more nationalistic government rise to power. However, our fascination with Middle Eastern rugs has not died with our investments and antique Persian rugs continue to be sought out by many in Europe and America. The Persian rug trade was both founded and molded by war and diplomacy, and with each rug comes a feeling of connection to history and beauty in the mind of the owner.
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