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In 1952, Britain and Iran Were in the Middle of an Oil Dispute. the Anglo-Iranian Oil Company

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In 1952, Britain and Iran Were in the Middle of an Oil Dispute. the Anglo-Iranian Oil Company In 1952, Britain and Iran were in the middle of an oil dispute. The Anglo-Iranian Oil Company (AIOC) was nationalized by the Iranian government under its fiery, bombastic premier, Mohammad Mossadeq (1880-1967).1 This was a tremendous loss for the British, the biggest stockholder in the company.2 As US Secretary of State Dean Acheson put it, “never had so few lost so much so stupidly in so short a time.”3 The oil nationalization came after the Iranian government had reopened negotiations of oil concessions with Britain. These negotiations were largely unsuccessful for Britain, due to Mossadeq’s aggressive negotiating style and his hatred of the British. In 1951, Mossadeq told US Special Envoy W. Averell Harriman, “You don’t know how crafty they [the British] are. You do not know how evil they are. You do not know how they sully everything they touch.”4 The British retaliated against oil nationalization by conducting threatening military maneuvers in the Persian Gulf and installing an embargo, which stopped the flow of Iranian oil to the rest of the world, mistakenly assuming that once Mossadeq saw the extent of Iranian dependence on the West, he would mute his support of oil nationalization. When he did not, one British lawmaker said, “really, it seemed hardly fair that dignified and correct Western statesmanship should be defeated by the antics of incomprehensible orientals.”5 The tension during this dispute was one of the many factors involved in the Iranian coup of 1953, in which the government of premier Mohammad Mossadeq was overthrown in an effort supported by the CIA (in its Operation Ajax) as well as the British international intelligence service, the MI6. The result was the installment of Iranian General Fazlollah Zahedi (1897-1963) as premier.6 The triumph of the CIA 1 The Editors of Encyclopaedia Britannica. "Mohammad Mossadeq." Encyclopedia Britannica. Accessed December ​ ​ 26, 2018. https://www.britannica.com/biography/Mohammad-Mosaddeq. ​ ​ 2 "D'Arcy Concession (1901)." Encyclopedia.com. Accessed December 26, 2018. ​ ​ https://www.encyclopedia.com/humanities/encyclopedias-almanacs-transcripts-and-maps/darcy-concession-1901. ​ 3 Abrahamian, Ervand. The Coup: 1953, the CIA, and the Roots of Modern U.S.-Iranian Relations. New York, NY: ​ ​ New Press, 2015, 9. 4 Walters, Vernon A. Silent Missions. Garden City, N.Y.: Doubleday, 1978, 247-248. ​ ​ 5 Elwell-Sutton, L.P. Persian Oil: A Study in Power Politics. London: Lawrence and Wishart Ltd., 1955, 258. ​ ​ 6 The Editors of Encyclopedia Britannica, Amy McKenna, and Surabhi Sinha. "Fazlollah Zahedi." Encyclopedia ​ Britannica. Last modified August 29, 2018. Accessed December 28, 2018. ​ https://www.britannica.com/biography/Fazlollah-Zahedi. ​ and MI6 in the 1953 coup of Iranian premier Mohammad Mossadeq was a tragic response to the US and Britain’s fears that Mossadeq’s policies were further legitimizing Iranian labor movements, anti-West movements, Iranian nationalism, and more broadly conflict between the Middle East and the West. Iranian nationalism has a history that goes back to July of 1906, when the Shah (of the Qajar dynasty) put in place the constitution of Iran after demonstrations in favor of democracy. The executive branch worked in the interest of the Shah; a hierarchy of courts including a Supreme Court was set up to rule on civil matters; and a bicameral legislative branch comprising a parliament (the Majles) with 136 members elected every 2 years, and a Senate with members appointed by the Shah and approved by the people. After World War I, the Qajar dynasty was overthrown by Reza Khan and Zia ed-Din. Reza Khan later took over as Minister of War, and moved on to became premier in 1923 and Shah in 1925.7 Mohammad Mossadeq said of Reza Khan’s rule: “There was always a reasonable balance between revenues and expenditures. The public servants of the country were not particularly well informed; nor did they have all the expert knowledge needed for a good modern government. Nevertheless, they managed to administer the country in their own way, according to their own peculiar sense of wisdom and disposition, and by their faith in the survival of the country. They did manage to turn the wheels in the right direction without the need to beg for money from foreigners.”8 Khan’s goals as Shah were based in the ideals of nationalism and the desire to modernize. His nationalism led to more widespread suspicion on the part of Iranians towards the Soviets and the British. After the 1941 occupation of Iran by the British and Soviets, Reza Khan fled, leaving his son, Mohammad Reza Pahlavi, as the shah, putting in place a legacy of Iranian nationalism that paved the way for others such as Mohammad Mossadeq. The 1953 Iranian coup was caused in part by the Cold War and the Red Scare. After seeing the policies of Mohammad Mossadeq such as the nationalization of British oil, the US worried that Iran 7 The Battle for Iran. 1974. Accessed December 26, 2018. ​ ​ https://nsarchive2.gwu.edu/NSAEBB/NSAEBB435/docs/CIA%20-%20Battle%20for%20Iran%20-%202013%20rel ease.PDF, 7. ​ 8 Homa Katouzian, ed. Musaddiq’s Memoirs London: Jebhe Publications, 1988, 114. ​ ​ would fall under Soviet influence. The United States considered the Middle East, and especially Iran, as a prize in the Cold War.9 One British ambassador said of fears of Soviet influence in Iran, “It is regrettable but a fact that the Persians are ideal Stalin-fodder. They are untruthful, backbiters, undisciplined, incapable of unity, without a plan. The Soviet system is equipped with a complete theoretical scheme for everything from God to galoshes.”10 While much of the fear of Soviet influence in Iran was unwarranted considering Mohammad Mossadeq’s objections not only to British influence in Iran but also to other influences, the USSR did account for 23% of foreign Iranian trade in 1926-27 and 38% in 1928-29.11 The Cold War motivation for the US involvement was further shown by an incident in 1944 in which Iran was plunged into Anglo-Soviet conflicts. After Mossadeq had been seated in the Iranian parliament, the Soviets publicly demanded oil concessions from Iran, mostly in the north. George Kennan, the architect of the US’s Cold War Containment Policy, said of this move, The basic motive of recent Soviet action in northern Iran is probably not need for oil itself but apprehension of potential foreign penetration in that area coupled with the concern for prestige. The oil of northern Iran is important not as something Russia needs but as something it might be dangerous for anyone else to exploit. The territory lies near the vital Caucasian oil center which so closely escaped complete conquest in the present war. The Kremlin deems it essential to its security that no other great power should have even the chance of getting a foothold there. It probably sees no other way to assure this than by seeking greater political and economic control for itself.12 9 Koch, Scott A. ''Zendebad, Shah!": The Central Intelligence Agency and the Fall of Iranian Prime Minister ​ Mohammed Mossadeq, August 1953. June 1998. Accessed December 26, 2018. ​ https://nsarchive2.gwu.edu/NSAEBB/NSAEBB435/docs/Doc%204%20-%20CIA%20-%20Zendebad%20Shah%20- %202000%20release.PDF, 1. ​ 10 British Ambassador, March 19, 1946, FO 371/Persia 1946/34-52670; it is unclear the extent to which Western ​ ​ racism figured in the events described in this paper. 11 The Battle for Iran, 11. ​ ​ 12 George Kennan to the Secretary of State, November 7, 1944, Foreign Relations of the United States: 1944, vol. 4, ​ ​ 470 The year before, the US State Department and the British Foreign Office had also demanded an oil concession, but privately. Thus Iran was forced to pick a side: the British or the Soviets. Mohammad Mossadeq, as an Iranian nationalist and supporter of oil nationalization, passionately opposed both of them. He argued that allowing a northern oil concession would be detrimental in the same way that the 1901 D’Arcy Concession (to the British in southern Iran) had been, and that the granting of more concessions would incentivise more Western powers to seek concessions from Iran. Iran ended up refusing all oil concessions until the end of World War II, angering the Soviets. In the end, Iran negotiated a deal in which the Soviets would own 51% of Iranian oil stock in northern Iranian provinces and Iran would own 49% for 25 years, after which Iran would own 51% and the Soviets 49% for the following 25 years.13 However, this deal was rejected by the Majles (Iranian parliament) with nationalists and communists aligning with each other. The Majles then forbade the government from conceding oil to any foreign country and encouraged renegotiations of oil concessions that had already been made, with a bill proposed by Mohammad Mossadeq. As President Roosevelt described the nationalism that Mossadeq later represented, The Iranians distrust the motives of both Britain and Russia and believe that the future existence of Iran as an independent nation is threatened… For the most part the attitude of the Iranian officials, and indeed of the Iranian people who are in a position to appraise conditions, is one of intense bitterness towards Great Britain... Toward Russia there is less bitterness… The Iranians openly charge and believe that Britain has been guilty of conduct akin to that of the Nazis in Europe. 13 Abrahamian, 43. If the Iranians had to decide today between Britain and Russia they would in my opinion unquestioningly choose the Russians.14 However, anything less than total support of the West against Soviet interests was seen by the outgoing British ambassador to Iran as “appeasement” of the Soviets in northern Iran, which he warned would “in the last analysis threaten our vital oil supplies in the south.”15 Few people saw what was actually coming.
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