Post-war power games in Iran
In Tehran, which had been cleared of German agents, the allies Britain, the Soviet Union and the United States agreed to withdraw their troops from Iran after the war ended. The United States and the Soviet Union agreed to withdraw their troops from Iran, but the region had become strategically important to the United States, which tried to bring the countries concerned into its sphere of interest even before the war ended. ARAMCO had interests in Saudi Arabia, while the other countries in the region were under British influence, so it could only implement its ideas step by step.
The Americans established good relations with the Iranian ruling class, and in 1947 the two sides signed a military treaty. The police were reorganised and armed along American lines. To complicate matters, national movements for independence were increasingly making their voices heard, while Kurdistan and Azerbaijan in the Soviet occupied zone were granted 'Russian-style autonomy'.
But the Truman Doctrine, proclaimed in 1947, guaranteed the independence of the Persian state. Afterwards, the Soviets, who were permanently landlocked in Iran, wanted to acquire oil concessions, but the Iranian prime minister managed to get the plan rejected by parliament.
The rise of Mossad and oil nationalisation
Mohammmad Mossadi, who in 1950 founded the Patriotic National Front (PNT), an Islamist, national social-democratic and radical party whose main objective was to make Iran independent of all outside powers. The Shah and his circle relied on the United States to oppose the PNT in the face of the Soviets and, although they failed to implement popular welfare measures, they launched the first seven-year plan in 1949. One of his measures was to nationalise the Anglo-Iranian Oil Company, and it was then feared that it would join the Eastern Bloc. The Shah signed the law on 2 May, allowing the formation of the National Iranian Oil Company.
The changes caught the attention of the US government, and on 15 July 1951, Averell Harriman, President Truman's personal envoy, arrived in Tehran on a special mission. His mission was to assure the United States of material and moral support for the Mossad government.
However, the situation was complicated by the fact that NIOC started selling its oil very cheaply on the market. The British companies boycotted the purchases. Iran was therefore only able to sell 132,000 tonnes of oil in 1952-53. This was compared to 54 million tons exported by the Anglo-Iranian Oil Company in 1950-1951. The British government then threatened to assert its interests by force of arms, and sent warships to the Persian Gulf, which were only withdrawn at American demand.
After Britain's attempts to do so failed, it lodged a complaint against Iran with the International Court of Justice in The Hague, which was rejected. The oil interests drew the appropriate conclusions from the Iranian nationalisation and came to the conclusion that Mossad should be replaced.
The 1953 coup and US intervention
In a tense situation, the Shah, on US advice, left the country and, with the financial support of the Central Intelligence Agency (CIA), the so-called "Operation Ajax" was launched. In August 1953, the United States overthrew Mossad in a coup organised by the US CIA. In its documents, US intelligence explained the intervention in Iranian politics by the possibility of a Cold War and the fear that in the event of a British invasion, the Soviets would respond by seizing the Iranian oil fields. If that happened, the West would lose Iranian oil for good and the chain of defence around the Soviet Union that was part of US foreign policy would be broken.
The CIA appointed General Fazlallah Zahedi to lead the coup, who, after mobilising the army and declaring a state of emergency, announced the overthrow of the Mossad government in August 1953. Soldiers seized strategically important buildings, including the government headquarters, and a week after the coup, Shah Mohamed Reza Pahlavi was allowed to return to the country. As a first step, the organisations involved in the coup were dismantled and their leaders and several military officers arrested.
Mossad was also tried by a military court, but because of his popularity and his old age, he was sentenced to only three years' imprisonment on the Shah's recommendation. (He later died under house arrest.)
In October 1954, after lengthy negotiations, all Iran's oil assets were transferred to the National Oil Company. The Anglo-Iranian Oil Company held 40 per cent of the consortium's shares, Royal Dutch Shell another 14 per cent, the French Compaigne Francaise des Petroles 6 per cent, and the remaining 40 per cent were shared by the American oil companies.
Redesigning the Suez Canal and oil supplies
By 1950, the Suez Canal had also grown in importance in the trade of Western European countries.Between 1951 and 1955, trade reached 207 million tonnes a year, a quarter of which was imported from Britain.In 1956, 75 per cent of Western Europe's oil requirements from the Middle East came to Europe via the Suez Canal, the remainder via the Mediterranean oil pipeline. France's dependence on Middle Eastern oil reached 90 percent during the period. Half of this came through the Suez Canal and half through oil pipelines.
The United States was also heavily dependent on shipments through the canal.
The creation of OPEC and its policy objectives
In September 1960, the oil-producing countries of the Middle East met in Baghdad to defend the basic price system through joint lobbying. The inaugural congress was attended by Iraq, Iran, Saudi Arabia, Kuwait and Venezuela. At the initiative of Sheikh Abdallah Tariki, Saudi Arabia's Minister of Petroleum, these countries formed an interest group known as the Organization of Petroleum Exporting Countries (OPEC). The aim of the organisation is to raise oil prices to a level that member states consider acceptable. Later OPEC was joined by Qatar, Dubai, Abu Dhabi, Sharjah, Algeria, Nigeria, Ecuador, Gabon, Trinidad and Tobago.
At the OPEC meeting in 1968, a turning point was reached, it was put forward that national oil policy, oil production, was the sovereign right of each country. The largest oil monopolies, however, did not formally recognise OPEC as a representative body and refused to sign contracts with the organisation.
The oil centre of the Western world has shifted from the Americas to the Middle East, in the Persian Gulf region. It was here that more than half of the world's most economically recoverable oil reserves were located, and the yields from these wells were relatively low.
In 1966, events accelerated. The Arab countries dealt a severe blow to the Iraq Petroleum Company (IPC), one of the largest international oil monopolies with US, British, French and Dutch interests. In December 1966, Syria seized the assets of the oil company. In response, the company closed the Iraqi oil pipeline through Syrian territory. Syria's actions were supported by Lebanon, Egypt, Algeria and Kuwait, forcing the IPC to conclude new agreements with Syria and Lebanon. In September 1966, an attempted coup was foiled in Syria. There were also several armed clashes on the Israeli-Jordanian border. On 25 November, the UN Security Council condemned Israel for its military action against Jordan. In April 1967, Israeli troops launched an attack on Syria. At the same time as the Israeli troop movements, the Arab countries of Syria, Egypt, Iraq and Kuwait ordered their armed forces to be on full combat alert. Egypt, meanwhile, called for the withdrawal of UN troops from the Gaza Strip, and in May 1967 the government announced the closure of the Gulf of Aqaba.
Following Arab action, Israeli troops attacked Egypt on 5 June and destroyed Jordanian and Syrian air forces. At the same time, they captured the Sinai Peninsula, Gaza, Sharm-el-Sheikh, West Jordan, the Arab part of Jerusalem and the Golan Heights in Syria.
Meanwhile, Iraq, Kuwait, Algeria, Saudi Arabia, Lebanon, Bahrain and Qatar have announced that they will not supply oil to the United States and Britain. The oil embargo did not last long, as the countries concerned were all dependent on oil. First Saudi Arabia, then Kuwait and finally Iraq resumed oil supplies. At the same time, Iraq enacted a new oil law under which the extraction and processing of oil throughout the country is under the jurisdiction of the national oil company.
In January 1968, after the failure of the boycott, the oil producers of the Persian Gulf decided to form a common interest grouping (Organization of Arab Petroleum Exporting Countries, OAPEC) to create Arab unity. Meanwhile, the pro-Baath leadership in Iraq, with the very active but still in the background involvement of Saddam Hussein, took power in Iraq in 1968. The Revolutionary Command Council was led by Ahmed Hassan al-Bakr, a relative of Saddam.
The oil crisis of 1973
In the summer of 1968, Great Britain announced that it would withdraw its troops from the Persian Gulf no later than 1 December 1971. At the OPEC and then OAPEC conferences in December 1971, Libya declared its willingness to send troops to expel the Iranians from the occupied islands, but the idea was not supported by the majority of member countries. Gaddafi retaliated by nationalising British Petroleum's interests in Libya. Saudi Arabia and Iran, taking advantage of the oil shortages caused by the oil boycott, have made substantial revenues, and their behaviour has had a demoralising effect on other Arab countries.
The Persian Gulf oil producers met with their representatives in Tehran in January 1971. The unfolding oil crisis was mainly due to the activities of US oil companies operating in the Persian Gulf. ARAMCO, for example, kept Saudi Arabia informed in 1973 about the development of US strategic oil reserves, thus enabling the Saudi leadership to time the embargo appropriately. The major US oil companies created artificial shortages in the market to keep consumer prices high.
The 1973 oil crisis and its global impact
On October 6, 1973, the fourth Middle East war broke out, known as the Yom Kippur War (Yom Kippur, or Day of Atonement). Subsequently, OPEC member countries decided at a meeting on October 17 to impose a full embargo on the United States and the Netherlands from October 21 for supporting Israel's aggressive policies. At the same time, oil supplies to Western European countries were reduced. However, the US government had overestimated its oil policy, believing that it could control oil prices and lift the oil boycott at any time. At the OPEC conference in Vienna on 17 May 1974, the embargo against the United States was lifted, but oil prices were not reduced, thanks to the intervention of Saudi Arabia. The majority of OPEC members would have supported a reduction in oil prices only if world commodity prices had been lowered.
Meanwhile, the oil-producing countries, intoxicated by the opportunities offered by oil revenues, began to make spectacular investments and purchases of military equipment.
The high European dependence on Arab oil is explained by the different policies of the US and Western Europe towards the oil-producing countries of the Middle East. In order to reduce dependence on oil, they have placed increasing emphasis on building up strategic reserves.
As a result of political tensions, Iran's role in the West's oil supply gradually declined from mid-1979 onwards. The economic reasons included high oil prices and sanctions that prohibited Western countries from supplying oil drilling and production equipment to Iran, where political and economic anarchy prevailed, while the shadow of a decade-long conflict that eventually led to the outbreak of the Iraq-Iran war was cast.
