The wildly popular, democratically-elected Iranian prime minister Mohammad Mossadegh was ousted in a coup 70 years ago this year. It was organised by the British and US secret services, MI6 and the CIA, and backed wholeheartedly by both governments. After the coup in August 1953, the reigning Shah Mohammad Reza Pahlavi built a repressive regime armed and supported by the US.
Why? The liberal and monarchist Mossadegh had the temerity to nationalise Iranian oil in April 1951, fulfilling a demand supported across Iranian society bar for the ruling elite. David Painter and Gregory Brew’s new book, The Struggle for Iran: Oil, Autocracy and the Cold War 1951-1954, draws out the twists and turns and competing interests involved. They’re anxious to show Mossadegh wouldn’t have been overthrown without the active involvement of British spooks in Iran and CIA networks in the Iranian army, and their funding of gangs and thugs.
The story starts with the British Empire, goes through the role of Iran in its dissolution, and ends with US imperialist hegemony in the West and Middle East. Iran was never a British colony, but nevertheless controlled by the British. In 1901 William D’Arcy—the founder of what would become BP—gained a concession to search for oil in an area covering 500,000 square miles. It made up all of Iran, bar five provinces that bordered on Russia, and was to last 60 years. Iran would receive a one-off payment of £20,000 and 16 percent of net profits thereafter.
In 1905, Darcy’s concession became a subsidiary of the British owned Burmah Oil company. When oil was discovered in Khuzestan province in the south west, a new company known as the Anglo-Persian Oil Company (APOC) was set up. Later renamed the Anglo Iranian Oil Company (AIOC), it could drill anywhere and build pipelines and refineries wherever it chose. The company paid no tax, the engineers were British and admin staff Indian. Iranians were only given low level jobs, because they were considered too stupid to run an oil industry. The British government took a controlling stake in the company in 1914, the year after the Royal Navy switched from coal to oil-fired engines.
Abadan, the site of the world’s biggest refinery, reflected the racist, colonial approach familiar to peoples all over the British Empire. Painter and Brew write, “British staff lived comfortably, with access to amenities including swimming pools, squash and tennis courts, and a cinema. Conditions for Iranian workers were often very poor. In 1950, 80 percent of the company’s non-skilled workers remained without company housing, according to a report from the International Labour Office.”
The following 50 years saw a combination of British colonial arrogance, robbing Iranians of their own resources and transferring huge profits to the British government. Small wonder that it led to a burning hatred of the British and the demand to end all oil concessions to foreign interests.
The actions of the AIOC were central to the development of nationalist aspirations in Iran. In 1946, there was a mass strike by oil workers in Abadan that reflected growing support for Iranian control of the country’s oil. Later in March 1951, worsening economic conditions simply reinforced the national mood. Oil workers demonstrated over job and pay cuts—just as the renewal of the concession to the AIOC was being debated in the Iranian parliament.
The colonial arrogance of the company helped precipitate the inevitable nationalisation. Its chair, Sir William Fraser, thought the idea of Iran controlling its own oil was a joke and had no idea of how high feelings were running. He refused to contemplate a 50-50 split with the Iranian government. It would have been on the lines of a 1948 agreement between the Venezuelan government and foreign oil companies, and the forthcoming deal over oil in Saudi Arabia. Mass pressure prevented a renewal of the AIOC’s, leading directly to the decree for nationalisation.
This triggered an international crisis. Clement Attlee’s Labour government had itself nationalised about 20 percent of the British economy, including coal, railways, road transport, the Bank of England, civil aviation, electricity, gas, and steel. But it campaigned tooth and nail to safeguard British imperialism’s interests, to overturn the Mossadegh government and regain control of Iran’s oil industry. This included sending 14 warships up the Persian coast to blockade the oil refinery at Abadan and implementing sanctions against Iranian oil.
After the general election in October 1951, Winston Churchill’s Tory government continued the imperialist threats. They were both determined to reverse the nationalisation using a combination of military pressure and economic sanctions. Britain had coal reserves aplenty, but no oil, so controlling oil fields such as those in Iran was crucial. Iran supplied 85 percent of Royal Navy needs at cheap rates. But the AIOC was crucial in another way—oil revenues underpinned the British balance of payments trade deficit, helping fund Britain’s post war economic recovery.
The US government was initially less set on overturning Mossadegh. It supported sanctions to prevent Iran exporting oil but opposed military intervention. The US shared British government concerns about the ramifications of Mossadegh’s nationalisation decree and was worried other countries might follow his lead.
However, both Democrat president Truman and Republican successor Dwight Eisenhower were much more concerned at the possibility of Iran going over to the Soviet Union in the Cold War. Military conflict could lead to a war involving Stalinist Russia. Mossadegh presented a powerful case to the UN on Iran’s right to control its own resources, a message that was welcomed globally by anti-colonial forces. The US also viewed the Tudeh Party, the Russian-aligned Iranian Communist Party, with alarm. It was worried that worsening economic conditions in Iran could strengthen the Tudeh party and tip Mossadegh into leading Iran into the Russian camp.
Mossadegh set up the National Iranian Oil Company (NIOC) to run the oil industry. He issued an ultimatum to the British government to submit British employees to the NIOC’s control, or to leave Abadan by 4 October. Without US support, Attlee was forced to withdraw the warships and on 27 September and ordered the evacuation of all British employees from Abadan.
Iranian troops entered Abadan the same day, while Mossadegh spoke to a tumultuous rally in the capital Tehran. Painter and Brew refer to an interview in 1991 given by Sir Peter Ramsbotham, “who worked on oil matters at the Foreign Office in this period”. He made the point “that British officials feared the loss of Iranian oil revenues would be a greater blow to the empire than Indian independence. ‘Abadan,’ he observed, was ‘the real end of empire.’”
It was. From then on, the US would be the power in Iran. US imperialism was building a liberal capitalist order, underpinned by institutions such as the International Monetary Fund (IMF) and the Nato warmongers’ alliance rather than direct colonial control. As well as competing with the Soviet Union in the Cold War, it wanted to ensure its hegemony among its Western allies, Europe’s declining colonial powers.
But strategically, the US still needed Britain. The authors write, “President Eisenhower noted in a National Security Council meeting in March 1953 that while the United States should do what it thought necessary to prevent the loss of Iran, ‘we certainly don’t want a break with the British.’”
The US sought over the next 18 months to reach an agreement with Mossadegh. It hoped the deal would satisfy Iran’s aspirations and Britain’s demands for compensation for lost revenue. It wanted to preserve the principle that legal contracts could not simply be overturned by one side, so other states couldn’t unilaterally nationalise resources plundered by corporations. At one stage, the World Bank tried to broker a solution.
All attempts foundered on the fundamental issue. It was Iran’s right to run and benefit from its own oil industry versus Britain’s demands for compensation up until 1993 when the new oil concession was due to expire. In the end, the US concluded that an agreement with Mossadegh was not going to happen. He was leaning on the Tudeh Party for support. And, soon, Iran would again be able to sell enough oil to nullify the boycott. In other words, Iran would have won.
The internal opposition to Mossadegh was too weak and his support too strong for a coup to succeed without foreign intervention. But, tragically, Mossadegh’s popularity did not translate into the kind of mass organisation that could oppose a coup. He was a liberal constitutionalist—not a revolutionary—who wanted to use Iran’s oil wealth to develop the nation state and the economy.
The National Front, the organisation he’d set up in 1949 “was not a political party”, write Painter and Brew. It was “rather a loose grouping of factions united around the ideas of nationalisation, opposition to British influence, and constitutional government over the dominance of the Shah”. Over the course of the two years 1951-1953, the economic situation deteriorated as Mossadegh failed to conclude an agreement with Britain and the US over nationalisation. This coalition fragmented, helping to undermine Mossadegh’s position and allowed the British and CIA to successfully pursue a strategy of overthrowing Mossadegh.
US Secretary of State John Foster Dulles signed-off on organising a coup on 11 April 1953. There were two attempts, two days apart. After succeeding in blocking the first attempt, Mossadegh did not envisage a second attempt and had supporters of the Tudeh Party driven off the streets the following day. This opened the door to the second and successful attempt to take over Tehran, capture Mossadegh and put the Shah in charge. Mossadegh was allowed to retire to the countryside, but the Tudeh Party and other opposition were severely repressed.
It still took over a year for an agreement to be concluded that was acceptable to the British, the AIOC, the world’s leading oil companies and the US. This was without Mossadegh and with a compliant Shah, Mohammad Reza Pahlavi, supported economically and militarily by the US. Fraser’s tenacity to get proper compensation paid off. “The AIOC “came out surprisingly well” from the nationalization crisis, even though the company no longer existed in Iran.
The US denied the role of the CIA until 2017 when the truth was revealed in US Foreign Relations documents. The reason for the denial was simple, explain Painter and Brew. “President Dwight D. Eisenhower noted in his diary on 8 October 1953 that if the facts of the U.S. involvement became public, ‘our chances of doing anything of like nature in the future would almost certainly disappear.’” The authors continue, “The United States subsequently deployed the covert tactics used in Iran in a host of operations throughout the Global South.”
What concerned the US, then as now, was not the right of millions of Iranians to control their own destiny and their own resources. It was to ensure US hegemony, using any means necessary. In 1947, US President Truman had made clear that any country likely to fall to “Communism” was fair game. The years 1951-54 come at the start of the Cold War and the drawing of the lines between the Soviet Union and US. President Truman noted in a letter to ex-Ambassador to Iran Henry F. Grady: “’We had Israel, Egypt, near east defence, Sudan, South Africa, Tunisia, the NATO treaties all on fire. Britain and the Commonwealth nations were and are absolutely essential if these things are successful. Then on top of it all we have Korea and Indochina. Iran was only one incident.’”
Painter and Brew’s meticulous documentation of these crucial years in Iran’s recent history underpins their conclusion. They write, “The oil settlement reintegrated Iranian oil into world markets and provided Iran with substantial and growing oil revenues. It also reversed nationalisation and strengthened, at least temporarily, control of the world oil economy by the major international companies. These “successes” came at the cost of the Iranian people, as the settlement entrenched and strengthened authoritarian rule under an increasingly autocratic shah, dependent on support from the United States.”
Payback was to come in 1979. By then, the US had become as hated as the British Empire had been before them. A revolution overthrew the US-backed Shah and popular participation and democracy briefly flourished. But the political forces that manoeuvred into Iran’s leadership afterwards didn’t deliver on its promise.
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