Why Washington's Iran Policy Could Lead to Global Disaster
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On March 15, 1951, a democratically elected Iranian parliament summarily nationalized the country’s oil fields and kicked the AIOC out of the country. Facing a wave of public anger, Mohammed Reza Shah acquiesced, appointing Mohammed Mosaddegh, an oil-nationalization hawk, as prime minister. A conservative nationalist from an old aristocratic family, Mosaddegh soon visited the United States seeking aid, but because his nationalist coalition included the Tudeh Party (the Communist Party of Iran), he was increasingly smeared in the U.S. press as a Soviet sympathizer.
The British government, outraged by the oil nationalization and fearful that the Iranian example might impel other producers to follow suit, froze that country’s assets and attempted to institute a global embargo of its petroleum. London placed harsh restrictions on Tehran’s ability to trade, and made it difficult for Iran to convert the pounds sterling it held in British banks. Initially, President Harry Truman’s administration in Washington was supportive of Iran. After Republican Dwight Eisenhower was swept into the Oval Office, however, the U.S. enthusiastically joined the oil embargo and campaign against Iran.
Iran became ever more desperate to sell its oil, and countries like Italy and Japan were tempted by “wildcat” sales at lower than market prices. As historian Nikki Keddie has showed, however, Big Oil and the U.S. State Department deployed strong-arm tactics to stop such countries from doing so.
In May 1953, for example, sometime Standard Oil of California executive and “petroleum adviser” to the State Department Max Thornburg wrote U.S. ambassador to Italy Claire Booth Luce about an Italian request to buy Iranian oil: “For Italy to clear this oil and take additional cargoes would definitely indicate that it had taken the side of the oil ‘nationalizers,’ despite the hazard this represents to American foreign investments and vital oil supply sources. This of course is Italy’s right. It is only the prudence of the course that is in question.” He then threatened Rome with an end to oil company purchases of Italian supplies worth millions of dollars.
In the end, the Anglo-American blockade devastated Iran’s economy and provoked social unrest. Prime Minister Mosaddegh, initially popular, soon found himself facing a rising wave of labor strikes and protest rallies. Shopkeepers and small businessmen, among his most important constituents, pressured the prime minister to restore order. When he finally did crack down on the protests (some of them staged by the Central Intelligence Agency), the far left Tudeh Party began withdrawing its support. Right-wing generals, dismayed by the flight of the shah to Italy, the breakdown of Iran’s relations with the West, and the deterioration of the economy, were open to the blandishmentsof the CIA, which, with the help of British intelligence, decided to organize a coup to install its own man in power.
A Danger of Blowback
The story of the 1953 CIA coup in Iran is well known, but that its success depended on the preceding two years of fierce sanctions on Iran’s oil is seldom considered. A global economic blockade of a major oil country is difficult to sustain. Were it to have broken down, the U.S. and Britain would have suffered a huge loss of prestige. Other Third World countries might have taken heart and begun to claim their own natural resources. The blockade, then, arguably made the coup necessary. That coup, in turn, led to the rise to power of Ayatollah Khomeini a quarter-century later and, in the end, the present U.S./Israeli/Iranian face-off. It seems the sort of sobering history lesson that every politician in Washington should consider (and none, of course, does).