The earth was almost certainly far hotter millions of years ago, and the sea levels were much higher than they are today. Technically we are still in an ice-age, the earth is "normally" much hotter than it is now.
Millions of years ago, Australia was almost completely submerged with only today's coastal areas forming a huge archipeligo. That is why there are oil deposits in the outback. The same is true for all inland oil deposits all over the world. Oil is formed from old sealife that has been compressed underground for millions of years, in much the same way coal is formed from old trees. So all the oil in the middle-east is because it was submerged in the past.
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