TEHRAN Soon after oil was discovered in Iran in 1908 as the very first country in the region, colonial powers, particularly Britain and later the United States sought to bring the Iranian national wealth under their control, denying the impoverished nation of its revenues.In the absence of an effective Iranian federal government during both Qajar and the follower Pahlavi dynasties, the British colonial power utilized force and abused the weak point of the Iranian state to persuade it into making concessions which permitted foreign business to manage oil extraction and sale.
The nationalization of the oil market was the response to such manifest destiny.
Different weak Iranian kings made concessions to colonial powers.DArcy ConcessionIn 1901, William Knox DArcy, a British investor backed by the British government, reached a sixty-year contract with Mozzafar al-Din Shah of Iran to make use of Irans possible oil resources.
6 years later, in 1907, his exploration efforts paid off and oil was found in Masjedsoleyman in the southwestern province of Khuzestan for the first time in the West Asia and southern Persian Gulf areas.
Within two years, the Anglo-Persian Oil Company was developed to produce and bring Iranian oil to world markets.After the first Pahlavi king, Reza Shah rose to power with the full support of the British Empire, who helped him to stabilize the nation in line with its colonial goals, he started to reverse what his Qajar predecessors did.
One of Reza Shahs actions was to cancel the 1932 DArcy Concession.
His 1933 oil concession was not much in Irans favor.Irans 1933 Oil ConcessionThe Iranians at the time of Reza Shah were opposed to the DArcy Concession as they looked for their inalienable rights and the increasing Irans share of oil earnings.
By contrast, Britain sought to optimize their gains and extend its complete control over the natural Iranian resources.
The Brits also meant to get a stronger arrangement, which needed to be ratified in the Iranian parliament in order not to have the weaknesses of the previous concession.The new 1933 arrangement extended the concession for another sixty years, sparking outrage amongst Iranians who eventually moved towards the 1951 nationalization.After the ratification of the 1933 contract, an amount of pound sterling was deposited into Reza Shahs account at Lloyds Bank in London, while the little quantity of cash as Irans share in the contract was invested by Reza Shah and his inner circle as they wished.In the meantime, the British were taken part in a rivalry with the Russians over acquiring control over the Iranians wealth.Formation of the nationalization of the Iranian oil industry movementThe movement to nationalize the oil industry was a reaction by the Iranians to concessions made by both Qajar and Pahlavi Shahs to foreign powers.
The movement was originated in the parliament.The motion was led by lawmaker Mohammad Mosaddegh, who later became prime minister.The British and Soviet troops invaded Iran in 1941, toppled Reza Shah, and occupied the nation.
The British gotten rid of Reza Shah and sent him into exile while Iran remained under Allied profession until 1946.
When the young Mohammad Reza changed his father as the brand-new Pahlavi king, the anti-colonial oil nationalization motion had become too strong to reduce.
In the meantime, the senior cleric Ayatollah Abol-Ghasem Kashani was leading a powerful popular motion outside the parliament versus foreign interference in the countrys affairs.Anyway, the weakness of Mohammad Reza Shahs routine benefitted the motion in the duration after World War II.
Various political groups emerged and the oil movement slowly got more and more powerful.As time passed, the United States signed up with the United Kingdom and the Soviet Union to get control of the Iranian oil market.
The religious movement led by Ayatollah Kashani and the National Front headed by Mosaddegh, who were both MPs from the capital Tehran constituency at the 16th parliament, were strongly in favor of nationalizing the oil market in the parliament.
Ayatollah Kashanis home had currently become a center for popular gatherings and challengers of the Shah-appointed prime ministers Abdolhossein Hazhir (1948 ), Ali Mansour (1950 ), and Haj Ali Razmara (1951) governments.After Prime Minister Razmara was assassinated by a member of the spiritual motion Fadaiyan-e Islam, the 16th parliament led the procedure of authorizing the legislation to nationalize the oil market and the Anglo-Iranian Oil Company (AIOC).
Finally, on March 15, 1951, the legislation was approved and it was validated by the parliament 2 days later March 17.
Mohammad Reza Shah reverses course on nationalization of oil industryAfter the piece of legislation to nationalize the oil industry was passed, the next month in April, Mosaddegh was introduced as prime minister by Shah Pahlavi under enormous pressure from the parliament.
Consequently, he served as the 35th Iranian prime minister from 1951 to 1953.
The young Shah along with the UK and the U.S.
might not stand the nationalization of the oil market and the democratically-elected Mosaddegh.
For that, they toppled his government in the 1953 coup dtat which was managed by the intelligence companies of the United Kingdom (MI6) and the United States (CIA).
In the aftermath of the coup, Mohammad Reza Pahlavi might reassert his autocratic control and negotiated the 1954 Consortium Agreement with the British, which returned the ownership of Iranian oil to a consortium of Western business till 1979, the year the Islamic Revolution became triumphant.