A Provocative Step
May 3, 1951 — Aubrey Thomas

The Mossadegh Project | August 3, 2021                     

Aubrey Thomas, a British journalist and Fleet Street mainstay, penned this column on the Iranian oil crisis and its significance to England.

Persia’s oil grab will hurt us — her, too


LONDON, Wed.— Persia’s hurried decision to nationalise the Anglo-Iranian Oil Company will have repercussions in Whitehall, the Kremlin, and the White House.

And it will affect every person in the British Commonwealth whether he drives a car in Manly or catches a bus in Manchester.

A few days after taking over the Premiership Mohammed Mossadeq has pushed through a nationalisation bill, and has announced he will sell Persian oil to the highest bidder.

This will inevitably mean a price rise, and make travel dearer in all countries using Persian oil.

But the consequences of nationalisation of Anglo-Iranian’s interests in southern Persia are more far reaching. Mossadeq has set ablaze a Middle East trouble spot which has been smouldering for years.

Here for 50 years British and Russian interests have clashed.

Why, of all times, has Mossadeq decided now on this provocative step?

You will find the answer partly in the character of Mossadeq, and partly in the chaotic hotchpotch which passes for a social and economic system in Persia.

MOSSADEQ is 75, mild-mannered, and frail. [68] But he is strong in patriotic fervor and determination to fulfil [sic] the popular demand, “Persian oil for the Persians.”

When the Persian Parliament decided in principle last month to nationalise oil it made Mossadeq chairman of the committee which was to go into the matter.

After fewer than four weeks the committee worked out a vague nine-point resolution.

Hussein Ala, who had been Premier only six weeks — since the assassination of General Razmara — resigned because he thought nationalisation would throw Persia into turmoil. [Hossein Ala succeeded Ali Razmara merely as an interim figure]

Mossadeq had no such qualms. He reasoned this way:

Persian now gets nearly half its revenue from the Anglo-Iranian Oil Company, and has to borrow more money from the company to keep the country going. [False] If the Company were nationalised Persia would get a bigger slab of profits, and compensation could be paid to the Company from the profits left over.

There’s no question of the Government buying out the Company. Even if all Persia’s gold reserves were sold, and the Shah’s crown jewels and the peacock throne were pledged, too, Persia would still not be able to raise enough to compensate the mammoth oil company.

Persian finances are in such a state that the salaries of some civil servants are a month in arrears.

Yet Mossadeq blandly says that he relies on British oil technicians to remain as employees of the Persian Government.

They might feel their salaries will be paid as irregularly as the civil servants, and decide to quit.

But the oilfields would close down without them, as there are not enough Persians with the necessary skill and experience to carry on.

The Persian Government also goes ahead with its nationalisation plans, knowing that the value of Persian oil depends on the 140 Anglo-Iranian tankers which take it to the world’s markets.

These tankers won’t be nationalised, and if the Company withdraws them Persia faces the risk of having the oil on her hands.

But Mossadeq must think this a reasonable risk, since the British Commonwealth relies so much on Persian oil.

He must think, too, that Britain won’t allow her technicians to leave the oilfields just for the Russians to come in behind them.

MOSSADEQ has probably taken all these risks to try to pacify the restive Persian people.

This unhappy country of 12,000,000 to 17,000,000 people — no one knows what the population is — has one of the most unbalanced societies in the world.

To begin with, there are 2,000,000 civil servants — between one-sixth and one-eighth of the population. They are poorly paid and corrupt.

All commercial, economic, and political activity is concentrated in the capital, Teheran, so that the intellectuals and the wealthy and professional classes abandon the provinces to stay in the capital.

Wealth is unevenly distributed, most of it being in the hands of a few land-owners.

There are a large number of nomad tribes, who are constantly in trouble with the settled population.

In a country so ranged against itself there is plenty of scope for extremist parties. One of these is Kashani’s Moslem Devotees’ Association, a member of which assassinated Prime Minister Razmara. [Ayatollah Kashani and Feda’ian Islam]

Kashani ignores all the obvious reasons for Persia’s internal strife, and blames everything on the British.

The Communist Tudeh Party, which is outlawed, but still functions underground, stirs up feeling by blaming Persia’s troubles on foreign millionaires and the rich Anglo-Iranian Company.

The Tudeh Party is believed to get help from Moscow, and to have inspired the abortive revolution in north Persia two years ago.

Some of its organisers are also believed to have been behind the Abadan Oil Refinery strike which has just ended.

Russia is obviously anxious for the Tudeh Party to have a strong voice in Persia. Persia’s oil would be as welcome to Russia as it is to the British Commonwealth and the United States.

But one of the comforting statements Mossadeq has made since he became Premier is that he won’t sell oil to Russia — “not a drop.”

THE Anglo-Iranian Company produced 31,000,000 tons of oil last year, and now ranks as the world’s premier petroleum producer.

Estimates of the value of the Company’s interests in Persia vary from £73,000,000 sterling to £250,000,000 sterling.

The Company’s issued ordinary capital is £20,000,000 sterling, the British Government holding the controlling share of £11,000,000 sterling.

The royalties that the company has been paying to the Persian Government are not revealed, but they are believed to have been more than £20,000,000 sterling a year.

By nationalisation Mossadeq hopes he can double this profit for the Persian exchequer, but whether Persia, with its ineffective administration, can benefit from the extra money is another matter.

Persia may not do herself much good if she carries through this oil grab, but she will certainly do the Commonwealth enormous harm.

Richard Stokes’ Second Thoughts on Iranian Oil (1951 Letter)
Richard Stokes' Letter to Clement Attlee, Aga Khan Concurs (1951)

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Related links:

British Oil Interests In Persia | House of Lords, May 1, 1951

They Wanted To Use Force In Persia | Ian Colvin, Oct. 22, 1952

British Oil | The Miami Times, May 5, 1951 editorial

MOSSADEGH t-shirts — “If I sit silently, I have sinned”

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