Iran, Britain and Oil: A Primer

November 13, 1951 — The Binghamton Press

The Mossadegh Project | April 7, 2016                  

In their Tuesday evening edition, a Binghamton, New York newspaper reviewed the Anglo-Iranian oil saga thus far in this scholastic editorial.

Oil Nationalization

Whatever settlement is ultimately reached in the Anglo-Iranian oil dispute, the oil is likely to remain nationalized and under native control. Efforts to settle the long-drawn-out controversy have been increased since the United Nations Security Council refused on Oct. 19 to take immediate action.

IRANIAN PREMIER MOSSADEGH, who denies the authority of the Security Council or the International Court to act, is still in Washington conferring with U.S. officials. The United States, attempting to be mediator, seeks a basis of settlement sufficiently promising to persuade Britain and Iran to resume negotiations. The new Conservative government in Britain [Winston Churchill] has called the British ambassador home from Tehran. [Sir Francis Shepherd, recalled by Foreign Secretary Anthony Eden] This suggests a fresh approach is sought in the impasse. Here is background on the issue:

Iran’s large oil resources have been developed by the Anglo-Iranian Oil Co., in which the British government has held a controlling interest since 1914. Although the concession was to run for another 40 years, the Iranian government nationalized the industry last May [late April] and took over the company’s properties. No oil has been produced since midsummer. Early in October the Attlee government [Premier Clement Attlee] bowed to Tehran’s demands and evacuated British workers from the oil fields.

Iran has indicated willingness to compensate Anglo-Iranian for the nationalized properties and to deliver oil for transport by that company to its customers. But Mossadegh says that “neither by trusteeship nor by contract will we turn over to foreigners the right to exploit our oil resources.”

How to get oil production going again under these conditions, and in view of Iran’s desperate need for foreign oil technicians, presents a difficult problem.

AMERICAN INTEREST in a settlement involves more than the oil at stake. There is fear that failure to settle the issue will throw Iran into Soviet hegemony. Iran as a strategic land bridge to the Far East is vital to Western strategy of defense. Then there is the further consideration of the vast oil resources of the whole Middle East.

Both Britain and the United States have been inept in dealing with the Iranian issue and with the surging nationalism of the Moslem world. Moderate placative measures taken months or years ago would have averted the present impasse. Western prestige has been allowed to decline by default. This loss of face has complicated the task of building a new defense command in the eastern Mediterranean. Egypt’s denunciation of treaties with Britain (over the Suez) stems from this loss of prestige.

EVEN IF THE IRANIAN AND EGYPTIAN issues at length are negotiable, the rising nationalism of the Middle East is likely to make for nationalization of oil everywhere.

The situations in Iran and Egypt, reflecting so much political instability, are a kick in the teeth to the theory of Point Four. Without political stability in under-developed countries, investments of large capital and technology are not safe.

Because exploitation of oil deposits in under-developed countries requires so much capital and technical skill, the exploitation has been dominated by a few giant companies, chiefly British and American. In the last few years these companies, particularly the American, have yielded ever more favorable terms to countries granting the concessions. But even the greater profit offered to the countries has not put off demands for native control. Expropriation is the order of the day.


Iran’s Oil | Baltimore Evening Sun (Letter), May 30, 1951

The Persian Drama | The Boston Globe, December 12, 1951

U.S. Plans New Mediation Effort In Iran Dispute | United Press, October 25, 1951

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

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