Iran Oil Industry Analysis

Moreover, the nationalization of the Iranian oil industry yielded much, if not more political instability. Iran had historically been coerced by foreign powers to grant concessions to them, providing them access to oil extraction. During the second world war the antagonism between the Soviet Union, Britain and the United States to gain autonomy of the Iranian oil industry grew more intense. Britain had already had a strong foothold in this competition through the Anglo Iranian Oil Company (AIOC). The majority of the shares were owned by the British and the majority of the revenue that flowed into Iran was used to repay debt back into Europe. The disparity between Anglo-Iranian profits were evident in an AIOC report where British profits were

This resentment was clearly present among the Majles, as they had approved nationalisation of the oil industry in March 1951. Prime Minister Mossadeq,a leading influence behind the nationalization decision was inaccurately depicted by the British and Americans as a radical fanatic although Keddie portrays Mossadeq as an ‘anti-imperialist nationalist who intended to keep Iran from being controlled by any foreign country or company.’ The AIOC, in order to pressure the reversal of the nationalization of the oil industry, sparked a worldwide boycott of Iranian oil, in which the United States participated. This was effectively an economic blockade. The National Iranian Oil Company was prohibited from selling oil during the nationalization period, despite being able to produce some oil. This resulted in loss of oil revenue being cut off from Iran, despite the government compensating for the loss of worker’s income by maintaining them on their payroll. Foreign (especially British and American) dissent for oil nationalization pressured the Shah in dismissing Mossadeq in 1952, however, Mossadeq was returned to office following mass demonstrations in his favour. Despite all this, British and American hostility to nationalist agenda remained firm - they were unobliging to the Iranian’s

As a deduction it exposed the vulnerability of Iran’s fragile independence... Although it is tempting to take on the angle that imperialism and American influence was the cause of the coup d’etat, upon further inspection it is clear that the coup was the result of the failures of Iran’s ruling powers. The Shah and the Majles were frequently in dispute over the issue of oil nationalization, so much so that the Shah attempted to discontinue Mossadeq’s power as Prime Minister. The Shah worked against Mossadeq in favour of his own personal interests, in which his dictatorial power and wealth would be restored and increased at the expense of the Iranian people’s desire for independence and freedom. Had the Shah alternately decided not to corruptly spoil this desire and work with Mossadeq rather than against him, the British Intelligence and CIA would not have had the power to overthrow Mossadeq, despite their best efforts. Although the economic blockade sparked by the AIOC resulted in inflation and general economic decline, overtime, economic pressures and the rising price of oil would have persuaded countries to back out of the boycott and eventually purchase Iranian oil. Therefore, the Shah was the one to truly blame for the instability caused by coup, as he had encouraged it and could have prevented it. It is therefore probable that the instability caused by the