Beginnings of Oil-Imperialism in Iran

“From the 1920s into the 1940s, Britain’s standard of living was supported by oil from Iran. British cars, trucks, and buses ran on cheap Iranian oil. Factories throughout Britain were fuelled by oil from Iran.”

The roots of the current crisis between Western powers, primarily the US and Britain, and Iran run as deep as any of the vast oil fields in the Middle East. To understand the latest flare up, the history of intervention by these two nations in Iran must be traced back over more than a century.

British firms and traders had been operating in what was then known as Persia for centuries, but the year of 1908 marked an important turning point. In that year an exploration team working for the English businessman William Knox D’Arcy located what was then the largest oil field ever discovered in Abadan, near the coast of the Persian Gulf. Although not instantly apparent this discovery was the start of a blood-soaked timeline which has yet to reach a conclusion.

Three years later, a certain Winston Churchill was appointed First Lord of the Admiralty. With Britain on an imperial collision path with Kaiser Wilhelm’s Germany he sought to modernise the Royal Navy by significantly upgrading its fleet to “more intense forms of war power”^[i]. This meant an overhaul from coal power to the cutting-edge efficiency of oil. Unlike coal, Britain had no domestic source of ‘black gold’ and was forced to look elsewhere to fuel its military ambitions.

By June 1914, just six weeks before the outbreak of World War One, Churchill had won over parliament to his modernisation plans and secured the British state a controlling 51% stake in the Anglo-Persian Oil Company (APOC)^[ii]. The acquisition required no renegotiation of the 1901 D’Arcy Oil Concession which stipulated that just 16% of net profits from all sales of “natural gas, petroleum, asphalt and ozokerite” in the vast majority of Persia were to be returned to the Persian Government^[iii].

The Concession was cancelled in 1932 and then renegotiated in 1933 by Reza Shah Pahlavi, but remarkably the overarching extortive framework of the agreement remained in place until the transformative year of 1951. Soon it was not just the British Navy that was being supported by this highly exploitative arrangement, but British society as a whole. In the words of former New York Times foreign correspondent Stephen Kinzer:

“From the 1920s into the 1940s, Britain’s standard of living was supported by oil from Iran. British cars, trucks, and buses ran on cheap Iranian oil. Factories throughout Britain were fuelled by oil from Iran.”^[iv]

During this period, Britain militarily intervened in Iran on two separate occasions. From 1918 to 1921, Britain was keen to counteract the threat of the Bolsheviks by launching a “Churchillian crusade to support the white [anti-Bolshevik] cause”[v] in Northern Persia. General Edmund Ironside led the Norperforce “of not a few thousands of His Majesty’s troops”^[vi] to the region. There he identified Reza Shah Pahlavi, a Persian Cossack Brigade officer, as someone capable of leading a coup, and with British support Reza Shah Pahlavi marched on Tehran in February 1921, securing British interests in the process.

20 years on Reza Shah Pahlavi was deposed at the request of the British government and replaced by his son Mohammad Reza Pahlavi following the Anglo-Soviet invasion of, what as of 1935 was officially called, Iran. Despite Iran taking a neutral position during World War Two, the Allies were keen to secure the Abadan oilfields and to ensure supply routes to Soviet forces. Under the code name Operation Countenance, the British invaded by land (almost entirely Indian brigades) and air from Iraq whilst the Navy attacked from the Persian Gulf. Meanwhile, Soviet forces invaded from the north.

The two invading powers swiftly overwhelmed the Iranian resistance. Occupying the country for the remainder of the war, they consumed vast resources in the process which led to widespread food shortages. Although all foreign troops eventually left the country by April 1946, following an early Cold War standoff between Stalin and Truman, the fight for Iran’s oil resources has proved to be a never-ending battle.

Mohammad Mossaddeq became Prime Minister in April 1951 having led the Jebhe Melli (The National Front) since its creation in 1949 on the back of a wave of nationalism. Alongside a range of social reforms, his most immediate concern was to wrestle control of the nation’s oil away from the British and after just three days in office Mossaddeq enforced the Oil Nationalisation Act. With typical imperial arrogance the British Government, led by Clement Attlee, perceived this as a ‘hostile’ act and proceeded to announce a full-scale embargo on Iranian oil, a ban on imports to the country and “measures to freeze Iranian sterling assets”^[vii]. Sound familiar?

Winston Churchill was restored as Prime Minister in October 1951 and began the job by attacking his predecessors for not using force against Iran^[viii]. With the UN Security Council and the International Court of Justice both siding with Iran in legal hearings brought by the British Government, talk of a coup began to fill the corridors of power. But after the great expense of World War Two, and the reorientation of power in the world that followed it, Britain was in no place to take on such a mission alone – now it needed the political and military power of the US to lead the way.

With Iran’s strategic position, vast oil wealth and support growing for the Tudeh Party (Iranian Communist Party) amongst an increasingly insurgent population it may have appeared the perfect target for President Truman’s doctrine of Soviet ‘containment’. Truman however was reluctant to back a military coup and Churchill still hoped that the severe financial pressure the country was under due to its embargoed oil industry would eventually lead Mossaddeq to cave in to British demands. Not so. Rather he resigned his position in protest at Mohammad Reza Shah’s refusal to back him over oil nationalisation and in doing so triggered huge demonstrations on the streets in support of his position. Just five days later he was re-instated as Prime Minister and more emboldened than ever.

You can purchase a copy of A Brief History of Western Intervention in Iran here

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