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Why Washington’s Iran Policy Could Lead to Global Disaster
Posted on Apr 14, 2012
By Juan Cole, TomDispatch
Iran is particularly jealous of its independence because in modern history it has so often been dominated by a great power or powers. In 1941, with World War II underway, Russia and Britain, which already controlled Iranian oil, launched an invasion to ensure that the country remained an asset of the Allies against the Axis. They put the young and inexperienced Mohammed Reza Pahlevi on the throne, and sent his father, Reza Shah, into exile. The Iranian corridor—what British Prime Minister Winston Churchill called “the bridge of victory”—then allowed the allies to effectively channel crucial supplies to the Soviet Union in the war against Nazi Germany. The occupation years were, however, devastating for Iranians who experienced soaring inflation and famine.
Discontent broke out after the war—and the Allied occupation—ended. It was focused on a 1933 agreement Iran had signed with the Anglo-Iranian Oil Company (AIOC) regarding the exploitation of its petroleum. By the early 1950s, the AIOC (which later became British Petroleum and is now BP) was paying more in taxes to the British government than in royalties to Iran for its oil. In 1950, when it became known that the American ARAMCO oil consortium had offered the king of Saudi Arabia a 50-50 split of oil profits, the Iranians demanded the same terms.
The AIOC was initially adamant that it would not renegotiate the agreement. By the time it softened its position somewhat and began being less supercilious, Iran’s parliamentarians were so angry that they did not want anything more to do with the British firm or the government that supported it.
On March 15, 1951, a democratically elected Iranian parliament summarily nationalized the country’s oil fields and kicked the AIOC out of the country. Facing a wave of public anger, Mohammed Reza Shah acquiesced, appointing Mohammed Mosaddegh, an oil-nationalization hawk, as prime minister. A conservative nationalist from an old aristocratic family, Mosaddegh soon visited the United States seeking aid, but because his nationalist coalition included the Tudeh Party (the Communist Party of Iran), he was increasingly smeared in the U.S. press as a Soviet sympathizer.
The British government, outraged by the oil nationalization and fearful that the Iranian example might impel other producers to follow suit, froze that country’s assets and attempted to institute a global embargo of its petroleum. London placed harsh restrictions on Tehran’s ability to trade, and made it difficult for Iran to convert the pounds sterling it held in British banks. Initially, President Harry Truman’s administration in Washington was supportive of Iran. After Republican Dwight Eisenhower was swept into the Oval Office, however, the U.S. enthusiastically joined the oil embargo and campaign against Iran.
Iran became ever more desperate to sell its oil, and countries like Italy and Japan were tempted by “wildcat” sales at lower than market prices. As historian Nikki Keddie has showed, however, Big Oil and the U.S. State Department deployed strong-arm tactics to stop such countries from doing so.
In May 1953, for example, sometime Standard Oil of California executive and “petroleum adviser” to the State Department Max Thornburg wrote U.S. ambassador to Italy Claire Booth Luce about an Italian request to buy Iranian oil: “For Italy to clear this oil and take additional cargoes would definitely indicate that it had taken the side of the oil ‘nationalizers,’ despite the hazard this represents to American foreign investments and vital oil supply sources. This of course is Italy’s right. It is only the prudence of the course that is in question.” He then threatened Rome with an end to oil company purchases of Italian supplies worth millions of dollars.
In the end, the Anglo-American blockade devastated Iran’s economy and provoked social unrest. Prime Minister Mosaddegh, initially popular, soon found himself facing a rising wave of labor strikes and protest rallies. Shopkeepers and small businessmen, among his most important constituents, pressured the prime minister to restore order. When he finally did crack down on the protests (some of them staged by the Central Intelligence Agency), the far left Tudeh Party began withdrawing its support. Right-wing generals, dismayed by the flight of the shah to Italy, the breakdown of Iran’s relations with the West, and the deterioration of the economy, were open to the blandishments of the CIA, which, with the help of British intelligence, decided to organize a coup to install its own man in power.
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