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  • Sahej Kapoor

What goes around, comes around, Iran's oil war with CIA

During the 1st half of the 20th century, European nations had undergone a drastic change in their production techniques. Industrialization had set a trend of mass production and the establishment of new factories across the countries. Sooner, they realized that in order to run their production units, they would require more fuel, but unfortunately, Europe had no oil of its own. Great Britain took the first-mover advantage and got into an agreement with Iran in 1908, wherein the British oil companies had complete control of Iran's oil wells.


Great Britain exploited Iran's oil wells for more than 40 years, until 1951 when the newly elected prime minister, Mohammad Mosaddegh proposes to nationalize Iran's oil wells. On 1 May 1951, Mosaddegh nationalized the anglo-Iranian Oil Company, canceling its oil concession (expired in 1993) and expropriating its assets. Mossadegh saw the AIOC as an arm of the British government controlling much of the oil in Iran, pushing him to seize what the British had built for Iran. The next month, a committee of five majlis deputies was sent to Khuzistan to enforce the nationalization.



Our long years of negotiations with foreign countries... have yielded no results thus far. With the oil revenues, we could meet our entire budget and combat poverty, disease, and backwardness among our people.

Mohammad Mosaddegh, 21st June 1951.


Mosaddegh's proposal of nationalizing the Iranian oil fields made the general people of Iran challenge the overseas oil companies who have been exploiting the country's precious resource for more than 40 years, however the colonial mentality of the British and took this reform as an offense on their superiority. They thought that being oppressed by a lesser powerful nation would downgrade their honor and dignity. After the British got aware of the new proposals, they defended themselves by claiming that how the British companies had improved Iran's infrastructure, by investing their money in maintaining parks, constructing new swimming pools, but that clearly did not compare to the revenues and profits that the British companies were making every year by exploiting Iran's oil wells.


The Iranian prime minister was regarded as a hero in Iran for showing the courage of going against a more powerful nation, something that the previous governments should have done before. Mosaddegh had got a lot of media coverage since he was elected as prime minister, in fact, TIME magazine chose Mohammad Mosaddegh as the man of the year in 1951, over Douglas MacArthur, Harry S Truman and Winston Churchill.

The motive behind nationalizing the oil wells was to gain profit out of a well-needed resource, however, this did not make the British very happy. One of their first impulses was that they are just going to send an army and invade Iran. Harry S Truman, the President of The United States of America did not support the British. Great Britain was clearly new to such kind of treatment where a less powerful nation had the upper hand. Whenever Iran would try to trade oil with another country, the British would impound them and would discourage any trade relations with Iran.

At last, Britain had no choice but to take this case to the United Nations Security Council. On 28th September 1951, Britain officially reported this case to the UNSC, where the British delegate Gladwyn Jebb had presented their case. Mosaddegh himself went to New York on 8th October 1951 to present his country's case. In his arguments, the Iranian prime minister clearly stated that the contract that was signed between the 2 countries 43 years ago needed some changes, and all that Britain had been doing so far. After listening to both the arguments, surprisingly the UNSC favored Iran and that Britain had no right to exploit another nations' resource, the way they have been doing it.

Mohammad Mosaddegh presenting his case

After the UNSC refused to give back the oil rights to the British, this case was taken to the World Court. Mosaddegh again flew all the way to The Hague, to present his case on 22nd July 1952. For Great Britain, it was an open and shut case. According to them, Iran had taken something that belonged to the British, quite the irony, but once again Mosaddegh had a great impact not just on public opinion, but also on the judges. Once again the British were disappointed with the results, as the World Court also gave its decision in favor of Iran.

Britain ran out of options, they were clueless about what to do next, when they have lost the same case twice, being presented at different levels. Winston Churchill then reaches out to the president of The United States of America, Harry S Truman however, Truman had fundamental sympathy towards Iran and did not approve of Britain's plan.


I would have never agreed to the formation of the CIA back in forty-seven.............I had known it would have become the American Gestapo.

Harry S Truman, 33rd President, the United States of America.



Finally, in November of 1952, a surge of excitement charge through the British foreign services, as the new president of the United States was elected, Dwight D Eisenhower, a.k.a General Ike. Harry Truman and Eisenhower had different opinions regarding Iran's case with Britain. On one hand, Truman thought that Iran was doing the right thing and fighting for its rights against the British, and though that negotiation was the only way whereas, on the other hand, Eisenhower had a different opinion.

John Foster Dulles was the new secretary of the State and his brother Allen Dulles became the new director of the CIA, for the first time ever in the history of the United States, brothers were controlling both covert and overt operations of the country. The British parliament reached out to the newly elected Republican administration in the hope that they would help them overthrow Mohammad Mosaddegh. In order to convince Eisenhower, the Dulles brothers presented arguments that how Mosaddegh would eventually become a communist, and that it also is geographically very near to the Soviet Union.

After the Eisenhower committee was convinced of overthrowing the Iranian government, Allen Dulles appointed Kermit Roosevelt as the head of operations to be carried out.

Kermit Roosevelt

Kermit Roosevelt was the son of the 26th President of the United States of America, Theodore Roosevelt. Kermit Roosevelt was the head of CIA in the middle east department and was no less than a real-life James Bond.


In August of 1953, Kermit Roosevelt arrives in the city of Tehran, with the aim of overthrowing the Iranian government. As soon as Roosevelt starts his operations, he wanted to downgrade Mosaddegh's image in the minds of the Iranian people. In order to do so, he bribes newspaper editors to write articles on how Mosaddegh was a dictator, a Jew, homosexual, agent of the British, etc.

Further, he bribes high ranking military officials, religious leaders, and members of parliament in order to put the city of Tehran in complete chaos and promote riots and outbreak of violence.


In an incident, Roosevelt bribed the chief leader of protection racket, Shaban to take his mob through the streets and shout slogans that how Mosaddegh was a great leader, but then Roosevelt bribes a bigger and more powerful mob, to attack Shaban's mob. Roosevelt took the Shah of Iran under him and explained to him the entire plot. The Shah agreed to Roosevelt's plan and on his demand issues 2 farmans (royal orders), which stated that Mosaddegh should be removed from his power, and General Zahedi as the new Prime Minister. A few soldiers arrive at Mosaddegh's house at night to arrest him but however, that plan failed as there were more soldiers at Mosaddegh's for his protection. The next morning, on the radio it was a proud moment for Iranians as they thought that a British plot had failed, but the naive Iranians were not aware that one single person, in the basement of the Embassy of the United States of America is behind all this.

The Shah fled away to Rome and sooner Roosevelt receives an order from the CIA to evacuate immediately. Roosevelt had one final man, on whom he could rely on for this operation, Law Henderson, the ambassador from the USA. Henderson claimed that the activities that were happening in Iran, had put the lives of the citizens of the United States at risk, and forced Mosaddegh to establish Martial Law. This helped the coup plotters to gain access to the resources and in August 1953 Mosaddegh's 3 tanks were not enough to fight the 36 tanks sent by CIA, looted Mosaddegh's house, and forced him to run away, and finally, CIA successfully overthrew the democratically elected Iranian government. After this Zahedi was declared as the new Prime Minister and was paid $5 million. The military was filtered out, several officers were arrested, around 60 were executed. Oil wells in Iran were soon de-nationalized and 40% of the shares were taken by the US companies. Profits were split with Iran on a 50-50 basis, but Britain had the overall control, and eventually, the company renamed itself British Petroleum.

Shah received the news that Mosaddegh was overthrown, and returns to Iran. Shah ruled for another 25 years with increasing repression. Shah along with the help of the US military formed 'Savak', in 1957 a special police force for Shah. Savak later was indulged in torturing of local residents and the public of Iran.

In 1979, people of Iran came out to the streets and revolted against the Shah, who ran away and was taken in by the United States. As a result, Iranian students took several American citizens as hostages. This lead to the Iranian Revolution.


In the middle of the cold war, the United States played a role in the overthrow of a democratically elected Iranian government, this history is well known.

Barack Obama, US President, Cairo, Egypt 2009.


Was the Iranian coup successful? At first, the CIA would think that it was carried out very well since in months they were able to overthrow the government, however, the repercussions that the United States had to face were far greater.


It is not something that happened yesterday, Iran is a country with a very long history, so something that happened 60 years ago is not very far back for a country whose history goes back 3,000 years ago.

Dr. Trita Parsi, Iranian- Amercian author


Shah ruled Iran for another 25 years, with increasing repressions, which lead to an explosion in the late 1970s. The Iranian revolution led to a rise in the number of anti-American religious leaders and activists who undermined the power of the west. Sooner the entire middle east was influenced by these fanatic leaders, and are ruled on the same grounds.

These impacts are something that the United States still has to face because of what it did in 1953. If the USA had not interfered in the matters of the two nations, not only Iran but the entire middle east would have had very different relations with the west to what it has right now. As much as American and British authors try to defend this by arguing that this was the result of the cold war or communism, but the fact won't change that this was a war of oil, which the CIA started by overthrowing the democratically elected government.




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