Mission: Control

1951_02crude_oil_distillation_abadan

Sources are listed in abbreviations inside brackets at the end of each paragraph. See web/bibliography for .

For London, the AIOC had in Iran the world’s largest refinery, the second largest exporter of crude petroleum, and the third largest oil reserves. It also provided the British Treasury with £24 million in taxes and £92 million in foreign exchange; supplied the British navy with 85 percent of fuel needs; and the AIOC with 75 percent of its annual profit – much of which went to its shareholders in England as well as to oil ventures in Kuwait, Iraq, and Indonesia. [EA2 p118]

British Ministry of Fuel had warned the Foreign Office in 1945: “The strength of British oil lies in the fact that we hold concessions all over the world, in which we are ourselves developing the oil and controlling its distribution and disposal. It would weaken our position if countries began to develop their own oil. If Persia began to develop her own oil in the north, it might not be very long before she would want to do this in the south also. We should not encourage them to develop their own oil.” [EA1 p185]

[T]he central issue was who would control the production, distribution, and sale of oil. Although the word “control” was scrupulously avoided in public pronouncements, it was very much the operative term in confidential reports issued in both London and Washington. [EA2 p118]

[British Ministry of Fuel stated in a memo] “Iran would be content to see the industry running at a low level without foreign management. This raises a problem: the security of the free world is dependent on large quantities of oil from Middle Eastern sources. If the attitude in Iran spreads to Saudi Arabia or Iraq, the whole structure may break down along with our ability to defend ourselves. The danger of buying oil produced on reduced scale has, therefore, potentialities with dangerous repercussions.” [EA2 p119]

[A British Foreign Office Ministry memo stated] “The first effect of nationalization would be to put control into Persian hands. Seen from the United Kingdom point of view the present problem is not solely one of the fate of a major asset. It concerns the major asset which we hold in the field of raw materials. Control of that asset is of supreme importance. The point has already been made of the importance of the asset to our balance of payments and to our rearmament programme, but in the sphere of bilateral negotiations the loss of this, our only major raw material, would have cumulative and well-nigh incalculable repercussions. Moreover, it is false to assume an identity of interests between the Western world and Persia over how much oil should be produced and to whom it would be sold and on what terms. The Persians could get all the oil and foreign exchange they need from much reduced operations. For all these reasons, the United Kingdom has to keep control of the real resources involved.” [EA2 p119]

For Washington – as well as for London – Iranian control would have far-reaching disastrous consequences. It would not only strike a direct blow at the British. It would give control to Iran. It would inspire others – especially Indonesia, Venezuela and Iraq – to follow suit, and thus drastically shift control over the international petroleum market away from Western oil companies towards the oil-producing countries. [EA2 p119]

[Arthur Krock recalled] “The President [Truman] said he thought Mexico’s nationalization of oil was ‘right’, even thought so at the time; but it was regarded as ‘treason’ to say so. If, however, the Iranians carry out their plans as stated, Venezuela and other countries on whose supply we depend will follow suit. That is the great danger in the Iranian controversy with the British.” [BB p34]

[When Mossadeq was in] the United States, a State Department brief informed Truman that the prime minister was “supported by the majority of the population” and was “alert,” “witty,” “affable,” “honest,” and “well informed”. Truman was advised to stir the conversation into generalities about communism, American “disinterest” in oil, and U. S. goodwill toward Iran. [EA1 p187]

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  1. […] agreement, AIOC and the British Government (which owned 51% of it) dragged their feet and played games and called Iranians “greedy” and AIOC’s presence in Iran a “civilizing […]

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