To Understand Iran’s 150-Year Fight, Follow the Trail of Blood and Oil

Dieu et mon droit

It all started in 1872, with Nasir al-Din Shah having granted to the British Baron Julius de Reuter, rights to Iran’s entire economic estate. Reuter not only controlled Iran’s industry, farming, and rail transportation, but also held the right to issue currency and to set up a national bank, called the Imperial Bank of Persia, which was under direct British control.

In 1901, Muzzaffar al-Din Shah negotiated what became known as the D’Arcy Contract, granting William Knox D’Arcy, a millionaire London socialite, the special and exclusive privilege to basically own and manage the natural gas and petroleum of Iran for a term of 60 years.

In May 26th 1908 D’Arcy struck pay-dirt in Iran, discovering a huge oil field in Masjed-Soleiman. Britain immediately set up APOC in 1908, purchasing the rights to the black gold from D’Arcy. Six years later, First Lord of the Admiralty Winston Churchill gave the order to purchase 51% of APOC, effectively nationalizing the company. This was to ensure the free flow of oil to the British navy. It was the first company to extract petroleum from Iran.

Iran received only 16% of the royalties on the oil.

Britain continued to pursue total control of Iran, not through colonial occupation, but rather through economic “agreements”. In the midst of carving up the empire’s new “jewels” of the Middle East from the Sykes-Picot fraud on the Arabian people and the illegal British occupation of Palestine, the notorious Anglo-Persian Agreement of Aug 19, 1919 was also signed, with London effectively turning Iran into a de facto protectorate run by British “advisors”. Britain had succeeded in becoming the masters of Iran’s natural resources through this agreement.

Iran received almost nothing in return, not even oil from APOC for domestic consumption, but rather had to import it from the Soviet Union!

On Nov 28th 1932 Reza Shah announced that he would be cancelling the British concession to APOC. The British Navy was heavily dependent on cheap Iranian oil and thus Britain refused to acquiesce. A compromise was reached in 1933 through bilateral negotiations and the British managed to extend their concession up until 1993! Iran had succeeded in getting the British to pay a higher price but it still did not control its own oil.

The American Relationship

Despite claiming a neutral stance for Iran during WWII, word had gotten out that Reza Shah was apparently sympathetic to the cause of Hitler. The argument was thus used that a pro-German Iran could become a launching pad for an attack against the Soviet Union, justifying British and Soviet entry into the country on Aug 25th 1941 for what would be a several years’ occupation. On Sept 16th Reza was forced by the British to abdicate and go into exile transferring power to his 22 year old son, Mohammad Reza Shah.

Mohammad Reza Shah was not happy with the joint occupation and sought an American military presence as a mediator to British and Soviet interests. The Shah sent a letter to President Franklin D. Roosevelt on Aug 25th 1941 asking him to:

“be good enough to interest yourself in this incident…I beg Your Excellency to take efficacious and urgent humanitarian steps to put an end to these acts of aggression.”

In response to this plea, Roosevelt sent Gen. Patrick Hurley as his special representative to Iran to help prepare what was to become the Iran Declaration, finally adopted at the Tehran Conference where Stalin, Roosevelt and Churchill would agree to guarantee the territorial integrity and national sovereignty of Iran.

The Iran Declaration was used to finally end the foreign occupation of Iran after WWII, despite some resistance, and would play a crucial role in Iran’s future fight for sovereignty. The Iran Declaration thus proved itself to be more than just words, and this would certainly never have happened if not for FDR.

As part of Hurley’s report to FDR, he wrote some biting words on the present system of British imperialism,

“The imperialism of Germany, Japan, Italy, France… will, we hope, end or be radically revised by this war [WWII]. British imperialism seems to have acquired a new life. . . What appears to be a new life… is the result of the infusion, into its emaciated form, of the blood of productivity and liberty from a free nation [Iran] through Lend-Lease.”

Roosevelt sent a copy of the Hurley report to Churchill with his thoughts on the matter:

“The enclosed memorandum was sent to me… I rather like his general approach to the care and education of what used to be called ‘backward countries’…the point of all this is that I do not want the United States to acquire a ‘zone of influence,’ or any other nation for that matter [in Iran].”

Churchill was less than enthusiastic on the Hurley-FDR vision. He was particularly irked by Hurley’s notion that British imperialism were in conflict with democracy.

FDR died only a few months later, and with his interment, Hurley’s plans for American support for a sovereign and democratic Iran as a model for the rest of the Middle East were relegated to the dust bins of time and forgotten by much of the world.

Following WWII, nationalistic sentiments were on the rise including in the Middle East, the most notable being Iran. However, following the death of FDR the British were free to disingenuously respond to Iran’s request for better economic conditions by offering what was called the “Supplemental Agreement”, in May 1949. This entailed a better payment in royalties but still denied Iran any oversight over accounts or any other form of control over Iranian oil.

Enter Mosaddegh

In the late 1940s, a new political force emerged in Iran called the National Front led by Mohammad Mosaddegh. Their campaign was centered on the demand to nationalize the AIOC and the people of Iran were in accord, electing Mosaddegh into the Majlis (parliament) in 1949.

Mosaddegh lost no time, and quickly became the head of the Majlis Oil Committee which was tasked to study the British “Supplemental Agreement”. When it came time to put it to a vote on Nov 25th 1950, the committee delivered a resounding “no” to the British proposition.

Less than four months later, the Majlis voted on March 15th 1951 for nationalization of the AIOC, and it was renamed as the National Iranian Oil Company (NIOC). Less than two months later, Mosaddegh became Prime Minister of Iran on April 28th 1951.

The British were left empty handed.

Twice the British tried to argue their case before the international community, once in May 1951 at The Hague and again in October at the UN Security Council. Both attempts were to lose to Mosaddegh’s defense. Mosaddegh had earned a Ph.D. in law from the Neuchatel Law School in Switzerland in 1914.

This was anything but a formal victory. It was to set a precedent in the international community that a country’s right to national sovereignty would be favored over Britain’s imperial “claims”, which were exposed during these two very public trials as amounting to nothing more than the threats and bribes of pirates.

At the UN Security Council, Mosaddegh responded to Britain’s imperial ambitions over Iran with these eloquent words:

“My countrymen lack the bare necessities of existence…Our greatest natural asset is oil. This should be the source of work and food for the population of Iran. Its exploitation should properly be our national industry, and the revenue from it should go to improve our conditions of life. As now organized, however, the petroleum industry has contributed practically nothing to the well-being of the people or to the technical progress or industrial development of my country…if we are to tolerate a situation in which the Iranian plays the part of a mere manual worker in the oil fields…and if foreign exploiters continue to appropriate practically all of the income, then our people will remain forever in a state of poverty and misery. These are the reasons that have prompted the Iranian parliament… to vote unanimously in favor of nationalizing the oil industry.”

A British coup

The British were fuming over Mosaddegh’s high profile humiliation of the British Empire’s claim to Iran’s oil. Mosaddegh would have to be deposed, however, this could not look like a British retaliation.

During Averell Harrimann’s visit to Tehran in July 1951, in an attempt to salvage the broken British-Iranian relationship, Mosaddegh is reported to have said,

“You do not know how crafty they are. You do not know how evil they are. You do not know how they sully everything they touch.”

As coup rumours circulated and reports were rife of British contact being sought with Iranian military officers, Mosaddegh severed diplomatic relations with the UK on Oct 16th 1952. The British were further humiliated and had to leave the country taking their agents with them.

It was at this point that Churchill “invited” his lap dog, de facto president Truman, to participate in his vision for regime change in Iran. In November 1952, NSC 136 and 136/I were written into record, Truman had agreed to promote direct intervention in Iran through covert operations and even military force. A detailed plan was approved on Jan 8th 1953 which was 12 days before Eisenhower was inaugurated.

The management of this covert operation was under the treasonous Dulles brothers, who would use the very same technique when JFK first entered office in setting him up with the Bay of Pigs fiasco, however, JFK managed to publicly expose Allen Dulles in this scheme and fired him. Dulles had been the Director of the CIA for 8 years up until that point, and was Deputy Director of the CIA for two years prior. Refer to my paper on this for further details.

A preliminary meeting in Washington saw representatives of the Near East and Africa Division (NEA) with British Intelligence. The key personalities were Christopher Montague Woodhouse who had been station chief for British Intelligence in Tehran and on the American side Kermit Roosevelt (son of Teddy Roosevelt) acting as NEA Division Chief. It was the British who would propose a joint political action to remove Prime Minister Mosaddegh according to CIA documents, which were in part leaked by the New York Times on April 16th 2000. The final plan was codenamed TPAJAX.

Appendix B, aka “London Draft of the TPAJAX Operational Plan” was black propaganda aimed at hammering out these themes 1) Mosaddegh favors the Tudeh Party and the USSR 2) Mosaddegh is an enemy of Islam since he associates with Tudeh.

The aim of such tactics was to drive a wedge between Mosaddegh and his National Front on the one side and his clerical allies, especially Kashani on the other. Demonstrations against Mosaddegh in the streets were to provide the pretext for bought MPs to hold a vote against him, if he refused to step down the plan was to have Fazlollah Zahedi, leader of the opposition, to arrest him. Zahedi, as laid out in Appendix B was selected by the British to replace Mosaddegh as Prime Minister after the coup.

Chief of Staff Gen. Taghi Riahi found out about the coup plans and alerted Mosaddegh in time. When the chief of the Imperial Guards, Col. Nasiri went to Mosaddegh’s house the evening before the planned coup day (Aug 16th) to arrest him, Nasiri himself was taken as prisoner by the pro- Mosaddegh military. Zahedi managed to flee.

The coup attempt had failed and the word spread fast, crowds flooded the streets supporting Mosaddegh and denouncing the Shah. The Shah left the country quickly.

The CIA informed of the fiasco alerted Kermit Roosevelt that he should leave Iran immediately. But Kermit believed the coup could still work and would make a second attempt three days later. British Intelligence and CIA orchestrated demonstrations set to the streets on Aug 19th. The royal decrees signed by the Shah for the deposal of Mosaddegh to be replaced by Zahedi were made public in the press that very day with the radio news announcing: that Zahedi was Prime Minister, that Mosaddegh had been ousted and that the Shah would return soon.

Military units were dispatched to Mosaddegh’s home. As his house was being destroyed by gunfire and tanks, Mosaddegh managed to escape. It is said he later turned himself in to the authorities.

After a ten-week period in a military prison, Mosaddegh was tried on charges of treason, because he had allegedly mobilized for a rebellion and had contradicted the Shah. In fact, the accused treason was a nationalistic response to a foreign led coup.

Mosaddegh was promptly found guilty and sentenced to death, later lessened to three years in prison, followed by house arrest.

Mosaddegh’s response to the kangaroo court proceedings was,

“My only crime is that I nationalized the oil industry and removed from this land the network of colonialism and the political and economic influence of the greatest empire [the British Empire] on Earth.”

Members of his government were also arrested, as were the leading military who remained loyal to him. Six hundred of the 6, 000 of these men were executed.

Even after Mosaddegh had passed away, on March 5th, 1967, his enemies were fearful of his influence. Mosaddegh had requested that upon his death, he be buried in the public graveyard beside the victims of the political violence that occurred on the 21st July 1952 from British-backed Ahmad Qavam who ordered soldiers to shoot at Mosaddegh nationalists during a demonstration, resulting in a blood bath. Not wanting his grave to become the site of political manifestations, a public funeral for Mosaddegh was denied and his body was quietly buried underneath the floorboards of a room in his house.

An Introduction to the ‘Shah of Shahs’, ‘King of Kings’

One important thing to know about Mohammad Reza Shah was that he was no fan of British imperialism and was an advocate for Iran’s independence and industrial growth. That said, the Shah was a deeply flawed man who lacked the steadfastness to secure such a positive fate for Iran. After all, foreign-led coups had become quite common in Iran at that point.

He would become the Shah in 1941 at the age of 22, after the British forced his father Reza Shah into exile. By then, Persia had already experienced 70 years of British imperialism reducing its people to near destitution.

Mohammad Reza Shah had developed very good relations with the U.S. under President FDR, who at the behest of the Shah, formed the Iran Declaration which ended Iran’s foreign occupation by the British and the Soviets after WWII.

His father, Reza Shah came into power after the overthrow of Ahmad Shah in 1921, who was responsible for signing into law the infamous Anglo-Persian Agreement in 1919, which effectively turned Iran into a de facto protectorate run by British “advisors” and ensured the British Empire’s control of Iran’s oil.

Despite Reza Shah’s problems (Mosaddegh was sent into exile during his reign), he had made significant achievements for Iran. Among these included the development of transportation infrastructure, 15 000 miles of road by 1940 and the construction of the Trans-Iranian Railway which opened in 1938.

Mohammad Reza Shah wished to continue this vein of progress, however, he would first have to go through Britain and increasingly the U.S. in order to fulfill Iran’s vision for a better future.

In 1973, Mohammad Reza Shah thought he finally found his chance to turn Iran into the “world’s sixth industrial power” in just one generation…

OPEC and the European Monetary System vs the ‘Seven Sisters’

In 1960, OPEC was founded by five oil producing countries: Venezuela, Iraq, Saudi Arabia, Iran and Kuwait in an attempt to influence and stabilise the market price of oil, which would in turn stabilise their nation’s economic return. The formation of OPEC marked a turning point toward national sovereignty over natural resources.

However, during this period OPEC did not have a strong voice in such affairs, the main reason being the “Seven Sisters” which controlled approximately 86% of the oil produced by OPEC countries. The “Seven Sisters” was the name for the seven transnational oil companies of the “Consortium of Iran” cartel which dominated the global petroleum industry, with British Petroleum owning 40% and Royal Dutch Shell 14%, giving Britain the lead at 54% ownership during this period.

After 1973, with the sudden rise of oil prices, the Shah began to see an opportunity for independent action.

The Shah saw the price increase as a way to pull his country out of backwardness. To the intense irritation of his sponsors, the Shah pledged to bring Iran into the ranks of the world’s top ten industrial nations by the year 2000.

The Shah understood that in order for this vision to become a reality, Iran could not just stay as a crude oil producer but needed to invest in a more stable future through industrial growth. And as it just so happened, France and West Germany were ready to make an offer.

In 1978, France and West Germany led the European community, with the exception of Great Britain, in the formation of the European Monetary System (EMS). The EMS was a response to the controlled disintegration that had been unleashed on the world economy after the fixed exchange rate became a floating exchange rate in 1971.

French foreign minister Jean Francois–Poncet had told a UN press conference, that it was his vision that the EMS eventually replace the IMF and World Bank as the center of world finance.

As early as 1977, France and West Germany had begun exploring the possibility of concretizing a deal with oil producing countries in which western Europe would supply high-technology exports, including nuclear technology, to the OPEC countries in exchange for long-term oil supply contracts at a stable price. In turn, OPEC countries would deposit their enormous financial surpluses into western European banks which could be used for further loans for development projects… obviously to the detriment of the IMF and World Bank hegemony.

The Carter Administration was not happy with this, sending Vice President Walter Mondale to France and West Germany to “inform” them that the U.S. would henceforth oppose the sale of nuclear energy technology to the Third World…and thus they should do so as well. West Germany’s nuclear deal with Brazil and France’s promise to sell nuclear technology to South Korea had already come under heavy attack.

In addition, the Shah had started a closer partnership with Iraq and Saudi Arabia cemented at OPEC meetings in 1977 and 1978. In a press conference in 1977 the Shah stated he would work for oil price stability. Together Saudi Arabia and Iran at the time produced nearly half of OPEC’s entire output.

If an Iran-Saudi-Iraq axis established a permanent working relationship with the EMS it would have assembled an unstoppable combination against the London world financial center.

Recall that France and West Germany had already ignored British calls to boycott Iranian oil in 1951 under Mosaddegh, and therefore, there was no indication that they were going to follow suit with Britain and the U.S. this time either.

As far as London and Washington were concerned, the Shah’s reign was over.

British Petroleum, BBC News and Amnesty International as Servants to the Crown

Were we to select a date for the beginning of the Iranian revolution it would be November 1976, the month that Amnesty International issued its report charging brutality and torture of political prisoners by the Shah of Iran.

Ironically, the SAVAK which was the secret police under the Shah from 1957 to 1979, was established and pretty much run by the SIS (aka MI6), CIA and the Israeli Mossad. This is a well-known fact, and yet, was treated as somehow irrelevant during Amnesty International’s pleas for a humanitarian intervention into Iran.

For those who haven’t already discovered Amnesty International’s true colors from their recent “work” in Syria… it should be known that they work for British Intelligence.

Gruesome accounts of electric shock torture and mutilation were printed in the London Times, the Washington Post and other respected press. Within a few months, President Carter launched his own “human rights” campaign. With this, the international humanitarian outcry got bigger and louder demanding the removal of the Shah.

The Shah was caught between a rock and a hard place, as he was known not to be strong on “security” matters and often left it entirely up to the management of others. Once Amnesty International sounded the war-cry, the Shah made the mistake of not only defending the undefendable SAVAK in the public arena but continued to trust them entirely. It would be his biggest mistake.

With the international foment intensifying, the British Broadcasting Corporation’s (BBC) Persian language broadcasts into Iran fanned the flames of revolt.

During the entire year of 1978 the BBC stationed dozens of correspondents throughout the country in every remote town and village. BBC correspondents, often in the employ of the British secret service, worked as intelligence operatives for the revolution.

Each day the BBC would report in Iran gory accounts of alleged atrocities committed by the Iranian police, often without checking the veracity of the reports. It is now acknowledged that these news reports helped to fuel and even organise the political foment towards an Iranian revolution.

In 1978, British Petroleum (BP) was in the process of negotiating with the government of Iran the renewing of the 25 year contract made in 1953 after the Anglo-American coup against Mosaddegh. These negotiations collapsed in Oct 1978, at the height of the revolution. BP rejected the National Iranian Oil Company’s (NIOC) demands, refusing to buy a minimum quantity of barrels of Iranian oil but demanding nonetheless the exclusive right to buy that oil should it wish to in the future!

The Shah and NIOC rejected BP’s final offer. Had the Shah overcome the revolt, it appeared that Iran would have been free in its oil sales policy in 1979 – and would have been able to market its own oil to the state companies of France, Spain, Brazil and many other countries on a state-to-state basis.

In the American press hardly a single line was published about the Iranian fight with BP, the real humanitarian fight for Iranians.

The Sword of Damocles

The “Arc of Crisis” is a geopolitical theory focused on American/western politics in regards to the Muslim world. It was first concocted by British historian Bernard Lewis, who was regarded as the leading scholar in the world on oriental studies, especially of Islam, and its implications for today’s western politics.

Bernard Lewis was acting as an advisor to the U.S. State Department from 1977-1981. Zbigniew Brzezinski, the National Security Advisor, would announce the U.S.’ adoption of the “Arc of Crisis” theory by the American military and NATO in 1978.

It is widely acknowledged today, that the “Arc of Crisis” was primarily aimed at destabilising the USSR and Iran.

Egypt and Israel were expected to act as the initiating countries for the expansion of NATO into the Middle East. Iran was to be the next link.

Iran’s revolution was perfectly timed with the launching of the “Arc of Crisis”, and NATO had its “humanitarian” cause for entering the scene.

However, the fight was not over in Iran.

On Jan 4th, 1979, the Shah named Shapour Bakhtiar, a respected member of the National Front as Prime Minister of Iran. Bakhtiar was held in high regard by not only the French but Iranian nationalists. As soon as his government was ratified, Bakhtiar began pushing through a series of major reform acts: he completely nationalised all British oil interests in Iran, put an end to the martial law, abolished the SAVAK, and pulled Iran out of the Central Treaty Organization, declaring that Iran would no longer be “the gendarme of the Gulf”.

Bakhtiar also announced that he would be removing Ardeshir Zahedi from his position as Iran’s Ambassador to the U.S.

An apple that did not fall far from the tree, Ardeshir is the son of Fazlollah Zahedi, the man who led the coup against Mosaddegh and replaced him as Prime Minister!

Ardeshir was suspected to have been misinforming the Shah about the events surrounding the Iranian revolution and it was typical that he spoke to Brzezinski in Washington from Teheran over the phone at least once a day, often twice a day, as part of his “job” as Ambassador to the U.S. during the peak of the Iranian revolution.

With tensions escalating to a maximum, the Shah agreed to transfer all power to Bakhtiar and left Iran on Jan 16th, 1979 for a “long vacation” (aka exile), never to return.

However, despite Bakhtiar’s courageous actions, the damage was too far gone and the hyenas were circling round.

It is known that from Jan 7th to early Feb 1979, the No. 2 in the NATO chain of command, General Robert Huyser, was in Iran and was in frequent contact with Brzezinski during this period. It is thought that Huyser’s job was to avoid any coup attempts to disrupt the take-over by Khomeini’s revolutionary forces by largely misleading the Iranian generals with false intel and U.S. promises. Recently declassified documents on Huyser’s visit to Iran confirm these suspicions.

During the Shah’s “long vacation” his health quickly deteriorated. Unfortunately the Shah was never a good judge of character and kept a close dialogue with Henry Kissinger as to how to go about his health problems. By Oct 1979, the Shah was diagnosed with cancer and the decision was made to send him to the U.S. for medical treatment.

This decision was very much pushed for and supported by Brzezinski and Kissinger, despite almost every intelligence report indicating this would lead to a disastrous outcome.

In Nov 18th 1979, the New York Times reported:

‘The decision was made despite the fact that Mr. Carter and his senior policy advisers had known for months that to admit the Shah might endanger Americans at the embassy in Teheran. An aide reported that at one staff meeting Mr. Carter had asked, “When the Iranians take our people in Teheran hostage, what will you advise me then?” ‘

On Oct 22, 1979, the Shah arrived in New York to receive medical treatment. Twelve days later, the U.S. Embassy in Teheran was taken over and 52 American hostages would be held captive for 444 days!

With the taking of the hostages, the Carter Administration, as pre-planned under the “Arc of Crisis”, set into motion its scenario for global crisis management.

The hostage crisis, a 100% predictable response to the U.S.’ decision to accept the Shah into America, was the external threat the Carter Administration needed to invoke the International Emergency Economic Powers Act, authorising the President to regulate international commerce after declaring a national emergency in response to an extraordinary threat.

With this new authority, President Carter announced the freezing of all U.S.-Iranian financial assets, amounting to over $6 billion, including in branches of American banks abroad. Instantly, the world financial markets were thrown into a panic, and big dollar depositors in western Europe and the U.S., particularly the OPEC central banks, began to pull back from further commitments.

The Eurodollar market was paralyzed and most international lending halted until complex legal matters were sorted out.

However, the most serious consequence by far from the Carter Administration’s “emergency actions,” was in scaring other OPEC governments away from long-term lending precisely at a time when West Germany and France were seeking to attract deposits into the financial apparatus associated with the European Monetary System (EMS).

In addition, the Carter Administration’s insistent demands that western Europe and Japan invoke economic sanctions against Iran was like asking them to cut their own throats. Yet, the raised political tensions succeeded in breaking apart the economic alliances and the slow blood-letting of Europe commenced.

Within days of the taking of the hostages, the pretext was given for a vast expansion of U.S. military presence in the Middle East and the Indian Ocean.

Sound familiar?

The message was not lost on Europe. In a Nov 28, 1979 column in Le Figaro, Paul Marie de la Gorce,  who was in close dialogue with the French presidential palace, concluded that U.S. military and economic intervention into Iran would cause “more damages for Europe and Japan than for Iran.” And that those who advocate such solutions are “consciously or not inspired by the lessons given by Henry Kissinger.”

During the 444 day hostage crisis, a full-scale U.S. invasion was always looming overhead. Such an invasion was never about seizing the oil supply for the U.S., but rather to deny it to western Europe and Japan.

If the U.S. were to have seized the oil supply in Iran, the body blow to the western European economies would have knocked out the EMS. Thus, during the 444 day holding of American hostages, this threat was held over the head of Europe like the sword of Damocles.

It is sufficed to say that today’s ongoing sanctions against Iran cannot be understood in their full weight and international ramifications without this historical background.

This article was originally published on Strategic Culture.

Cynthia Chung is the President of the Rising Tide Foundation and a writer at Strategic Culture Foundation, consider supporting her work by making a donation and subscribing to her substack page for free.