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Iran, BP and the CIA

The offshore oil drilling catastrophe in the Gulf of Mexico brought to us by BP has overshadowed its central role over the past century in fostering some other disastrous events.

BP originated in 1908 as the Anglo-Persian Oil Company—a British corporation whose name was changed to the Anglo-Iranian Oil Company two decades later.  With exclusive rights to extract, refine, export, and sell Iran’s rich oil resources, the company reaped enormous profits.  Meanwhile, it shared only a tiny fraction of the proceeds with the Iranian government.  Similarly, although the company’s British personnel lived in great luxury, its Iranian laborers endured lives of squalor and privation.

In 1947, as Iranian resentment grew at the giant oil company’s practices, the Iranian parliament called upon the Shah, Iran’s feudal potentate, to renegotiate the agreement with Anglo-Iranian.  Four years later, Mohammed Mossadeq, riding a tide of nationalism, became the nation’s prime minister.  As an enthusiastic advocate of taking control of Iran’s oil resources and using the profits from them to develop his deeply impoverished nation, Mossadeq signed legislation, passed unanimously by the country’s parliament, to nationalize the Anglo-Iranian Oil Company.

The British government was horrified.  Eager to assist the embattled corporation, it imposed an economic embargo on Iran and required its technicians to leave the country, thus effectively blocking the Iranian government from exporting its oil.  When this failed to bring the Iranians to heel, the British government sought to arrange for the overthrow of Mossadeq—first through its own efforts and, later (when Britain’s diplomatic mission was expelled from Iran for its subversive activities), through the efforts of the U.S. government.  But President Truman refused to commit the CIA to this venture.

To the delight of Anglo-Iranian, it received a much friendlier reception from the new Eisenhower administration.  Secretary of State John Foster Dulles had worked much of his life as a lawyer for multinational corporations, and viewed the Iranian challenge to corporate holdings as a very dangerous example to the world. Consequently, the CIA was placed in charge of an operation, including fomenting riots and other destabilizing activities, to overthrow Mossadeq and advance oil company interests in Iran.

Organized by CIA operative Kermit Roosevelt in the summer of 1953, the coup was quite successful.  Mossadeq was placed under house arrest for the rest of his life, the power of the pro-Western shah was dramatically enhanced, and the Anglo-Iranian Oil Company was once again granted access to Iran’s vast oil resources.  To be sure, thanks to the key role played in the coup by the U.S. government, the British oil company—renamed British Petroleum—henceforth had to share the lucrative oil extraction business in Iran with U.S. corporations. Even so, in the following decades, with the Iranian public kept in line by the Shah’s dictatorship and by his dreaded secret police, the SAVAK, it was a very profitable arrangement—although not for most Iranians.

But, of course, actions can have unforeseen consequences.  In Iran, public anger grew at the Shah’s increasingly autocratic rule, culminating in the 1979 revolution and the establishment of a regime led by Islamic fanatics.  Not surprisingly, the new rulers—and much of the population—blamed the United States for the coup against Mossadeq and its coziness with the Shah.  This, in turn, led to the ensuing hostage crisis and to the onset of a very hostile relationship between the Iranian and U.S. governments.

And there was worse to come.  Terrified by the rise of Islamic fundamentalism on their southern border, Soviet leaders became obsessed with fundamentalist revolt in Afghanistan and began pouring troops into that strife-torn land.  This was the signal for the U.S. government to back an anti-Soviet, fundamentalist jihad in Afghanistan, thus facilitating the growth of the Taliban and Al-Qaeda, who eventually turned their weapons on the United States.

Furthermore, as part of its anti-Iran strategy, the U.S. government grew increasingly chummy with Iran’s arch foe, Iraq.  As Saddam Hussein seemed a particularly useful ally, Washington provided him with military intelligence and the helicopters that he used to spray poison gas on Iranian troops during the Iran-Iraq War.  Might not such a friendship, cemented with a handshake by Donald Rumsfeld, have emboldened Saddam Hussein to act more freely in the region in subsequent years?  It certainly didn’t improve U.S. relations with Iran, which today is headed by a deplorable government that—consumed by fear and loathing of the United States—might be developing nuclear weapons.

At this point, we might well wonder if it was such a good idea to overthrow a democratic, secular nationalist like Mossadeq to preserve the profits of the Anglo-Iranian Oil Company (now renamed BP). Indeed, given the sordid record of BP and other giant oil companies, we might wonder why we tolerate them at all.

Dr. LAWRENCE S. WITTNER is Professor of History at the State University of New York/Albany. His latest book is Confronting the Bomb: A Short History of the World Nuclear Disarmament Movement (Stanford University Press).

This essay is distributed by the Oregon Peace Institute.

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Dr. Lawrence Wittner is Professor of History emeritus at SUNY/Albany and the author of Confronting the Bomb (Stanford University Press.)

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