Oil crisis in Iran from 1951 to 1954
Anglo-Iranian Oil Company in Abadan
The
Abadan Crisis
(
Persian
:
????? ???? ?????
Bohran Nafti Iran
, "Iran Oil Crisis") occurred from 1951 to 1954, after
Iran
nationalised
the Iranian assets of the
BP
controlled
Anglo-Iranian Oil Company
(AIOC) and expelled Western companies from oil refineries in the city of
Abadan
(see
Abadan Refinery
).
Prelude
[
edit
]
The AIOC was the
United Kingdom
's "single largest overseas asset" and a "source of national pride" in the British post-war era of
Clement Attlee
, and
Ernest Bevin
. Even as late as the "1940s and early 1950s some high British officials still believed that Persian petroleum was actually and rightly British petroleum because it had been discovered by the British, developed by British capital, and exploited through British skill and British ingenuity."
[1]
In stark contrast, Iranian Premier
Mohammad Mosaddegh
believed the 1933 concession granted to the AIOC by Iran was "immoral as well as illegal". Mosaddeq "challenged every aspect of the British commercial presence in Iran". The British feared that if Mosaddeq's policies prevailed, "nationalists throughout the world could abrogate British concessions with impunity."
[2]
Nationalization
[
edit
]
Prime minister
Mohammad Mossadegh
shaking hands with
Mohammad Reza Shah Pahlavi
The AIOC was nationalized by the Iranian Parliament in March 1951. In Iran this was enormously popular and seen as a long overdue staunching of the bleeding of its national wealth which could now be harnessed to fighting poverty in Iran. In Britain, the nationalisation was widely seen as an intolerable breach of contract or theft. British emissaries in the United States after the nationalisation, argued that allowing Iran to nationalise the oil company "would be widely regarded as a victory for the Russians" and would also "cause a loss of one hundred million pounds per annum in the United Kingdom's balance of payments, thus seriously affecting our rearmament program and our cost of living."
[3]
British warships blockaded Abadan. On 22 August, the British cabinet imposed a series of
economic sanctions
on Iran. It prohibited exports of key British commodities, including sugar and steel, directed the withdrawal of all British personnel from Iranian oil fields and all but a hard core of about 300 administrators from Abadan and blocked Iran's access to its hard currency accounts in British banks.
[4]
After the withdrawal of the British workers in the fall of 1951, the Iranians felt confident that they could easily hire non-British technicians to run the industry and then quickly train their own nationals to replace them. This did not prove to be the case; the United States, Sweden, Belgium, the Netherlands, Pakistan, and West Germany all refused to make their technicians available to the nationalized Iranian industry. Only Italy agreed, demonstrating that most industrialized countries supported Britain over Iran in the nationalization dispute."
[5]
In July 1952, the
Royal Navy
intercepted the Italian tanker
Rose Mary
and forced it into the British protectorate of
Aden
on the grounds that the ship's petroleum was stolen property. News that the Royal Navy was intercepting tankers carrying Iranian oil scared off other tankers and effectively shut down oil exports from Iran.
[6]
Coup d'etat
[
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]
The prime minister, who was selected by the Shah and approved by the Majlis, was overthrown on 19 August 1953, following
a coup d'etat
orchestrated by the United Kingdom and the United States. During the
coup
, codenamed
Operation Ajax
, the
CIA
and
MI6
restored
Mohammad Reza Pahlavi
to power. In August 1954, the AIOC was set under the control of an international
consortium
. Initially, ownership shares in the consortium proposed to be divided along the following lines: 40% to be divided equally (8% each) among the five major American companies;
British Petroleum
to have a 40% share;
Royal Dutch/Shell
to have 14%; and
CFP
, a French Company, to receive 6%. Iran now received 25% of the profits compared to 20% of the original treaty with the AIOC.
Saudi Arabia
and other oil-exploiting countries of the region received up to 50% of the profits in cooperation with American oil companies at the same time.
[
citation needed
]
In April 1951, the Majlis nationalized the Iranian oil industry by a unanimous vote, and the National Iranian Oil Company (NIOC) was formed, displacing the AIOC. The AIOC withdrew its management from Iran and organized an effective worldwide embargo of Iranian oil. The British government, which owned the AIOC, contested the nationalization at the
International Court of Justice
at The Hague, but its complaint was dismissed.
[
citation needed
]
NIOC was established right after nationalization of oil.
See also
[
edit
]
Notes
[
edit
]
- ^
William Roger Louis quoted in
Mohammad Mosaddeq and the 1953 Coup in Iran
Ed, by Mark J. Gasiorowski and Malcolm Byrne, Syracuse University Press, 2004 , p.129
- ^
William Roger Louis quoted in
Mohammad Mosaddeq and the 1953 Coup in Iran
Edited by Mark J. Gasiorowski and Malcolm Byrne, Syracuse University Press, 2004 , p.148
- ^
Kinzer, Stephen,
All the Shah's Men : An American Coup and the Roots of Middle East Terror
, Stephen Kinzer, John Wiley and Sons, 2003, p.90
- ^
Kinzer,
All the Shah's Men
, (2003), p.110
- ^
Heiss quoted in
Mohammad Mosaddeq and the 1953 Coup in Iran
Edited by Mark J. Gasiorowski and Malcolm Byrne, Syracuse University Press, 2004 , p.182
- ^
Kinzer,
All the Shah's Men
, (2003), p.138
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