Bahrain, a small Arab state situated in a bay on the southwestern coast of the Persian Gulf. It is an archipelago consisting of Bahrain Island and some 30 smaller islands. Its name is from the Arabic term al-baḥrayn, meaning “two seas.”Located in one of the world’s chief oil-producing regions, Bahrain itself has only small stores of petroleum. Instead, its economy has long relied on processing crude oil from neighboring countries, and more recently the financial, commercial services and communications sectors have grown markedly, as has tourism.