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Economics and Trade • Oil and Geopolitics

The Anglo-Iranian oil crisis began on April 26, 1951, when Iran's new nationalist leader, Mohammad Mosaddeq, moved to nationalize his nation's oil reserves. The crisis ended on August 19, 1953, when Mosaddeq's government was overthrown in a U.S.-sponsored coup d'état.

Mosaddeq's nationalization measures came largely at the expense of the British-controlled Anglo-Iranian Oil Company, which had been exploiting Iranian oil reserves for years. The crisis highlighted the differing communist containment policies carried out by the British Foreign Office and the U.S. State Department in the Middle East. It can also be viewed as an early attempt by a developing nation to break free from Western imperialism and colonial control. The fact that the crisis involved oil also showcases just how critical cheap and abundant oil supplies were to the West.

Competing Economic Interests

During 1951–1953, there was an ongoing diplomatic crisis among Iran, the United Kingdom, and the United States over Mosaddeq's actions. Beginning in November 1951, Mosaddeq requested that Western nations that had purchased Iranian oil in the past confirm their current orders with the newly nationalized Iranian oil industry. The British took immediate action by pressuring purchasing nations not to cooperate with Mosaddeq's request.

At first, the United States took a neutral stance in the crisis, siding completely with neither London nor Tehran. The Americans' chief concern was keeping Iranian oil out of Soviet control rather than saving the Anglo-Iranian Oil Company. U.S. secretary of state Dean Acheson urged Britain to accept Iran's nationalization and instead aim at maintaining control over the technical aspects of oil production. Throughout much of 1951, the United States regarded Iran's continued alliance with the West as a priority over British economic interests.

President Harry Truman sought to broker a settlement between Tehran and London. This agreement would involve Britain accepting Iranian nationalization in return for control over oil production and drilling. At the same time, British officials were debating whether launching a war against Iran was a viable option to ending the standoff. The British Foreign Office seemed willing to entertain the idea of military force. However, British prime minister Clement Attlee was steadfastly opposed to it.

U.S.-British Alliance

The British government ultimately refused to negotiate with the Iranians and instead opted to impose economic sanctions on Mosaddeq's regime. On September 10, 1951, Britain took measures to prevent purchases of Iranian oil on the international market.

Meanwhile, the United States and Britain were moving closer together on ending the crisis. Throughout the autumn of 1951, the Truman administration became less neutral. As time went on, the U.S. State Department trusted Mosaddeq less and less. From January 1952 on, the United States became increasingly concerned about Iran's internal economic stability. The United States maintained that Mosaddeq was now increasingly likely to turn to Moscow to stabilize Iran's economy.

By the spring of 1952, these concerns led the Americans to view regime change as a viable path to ending the crisis. Between the end of 1951 and July 1952, the Americans hoped that this would happen as a result of the dispute between Shah Mohammad Reza Pahlavi of Iran and Mosaddeq over which of the two would control the Persian Army. In the fall of 1952, Tehran broke diplomatic relations with London.

Coup Restores the Shah

In January 1953, Dwight D. Eisenhower became president of the United States. The failure of diplomacy coupled with the Eisenhower administration's eagerness to end the crisis opened the door for the coup d'état of August 1953. The Eisenhower administration supported regime change in Iran in a coup organized by the U.S. Central Intelligence Agency. U.S. policymakers were particularly alarmed by the possibility that Mosaddeq would bring the communists to power in Iran. Supported by the British government, the coup returned Shah Pahlavi to power. The British and U.S. governments then established an Anglo-American oil consortium on April 12, 1954.

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Further Reading

Bamberg, James. British Petroleum and Global Oil, 1950–75: The Challenge to Nationalism. Cambridge, UK: Cambridge University Press, 2000; Heiss, Mary Ann. Empire and Nationhood: The United States, Great Britain, and Iranian Oil, 1950–54. New York: Columbia University Press, 1997; Marsh, Steve. Anglo-American Relations and Cold War Oil. London: Palgrave MacMillan, 2003.

MLA Citation

Selva, Simone. "Anglo-Iranian Oil Crisis." World History: The Modern Era, ABC-CLIO, 2019, worldhistory.abc-clio.com/Search/Display/1349032. Accessed 19 Mar. 2019.

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Entry ID: 2181011

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