THE ANGLO–IRANIAN OIL COMPANY’S CRISIS MORE CRUCIAL THAN THE SUEZ CANAL CRISIS: BRITISH LIMITATION: NOT LEARNING A LESSON!
The Stokes mission failed. The Stokes mission failed because, while offering the Iranians nationalisation and the withdrawal of the Anglo-Iranian Oil Company, it wanted to secure British management of the oil operation. This was not acceptable to the Iranian Prime Minister, Dr. Musaddiq. The Iranian Prime Minister insisted that the British and Iranian staff in the industry should be employed under a direct contract with the National Iranian Oil Company. The British Government subsequently submitted the case of the Ang1o-Iranian Oil Company to the Security Council of the United Nations. The removal of Dr. Musaddiq, the Iranian Prime Minister, became the British Government’s prime objective. The Truman administration, as has been said, was of the opinion that a British military action would become a pretext for the Soviet Union to intervene, and the dispute between Britain and Iran should be settled by negotiations. The Americans became involved as a mediator in the Ang1o-Iranian Oil Company conflict because of the financial considerations, the United Kingdom also welcomed the International Bank’s mediation. The loss of Iranian oil was forcing the United Kingdom to spend 25 per cent of her dollar earnings on oil supplies. The British Government, therefore, was seeking the International Bank’s help. The American mediation, and the International Bank’s mediation, respectively, failed. In the American mediation, the British were determined that the handling of Iranian oil must not be shared with anyone else except under British control. The Iranians were equally intransigent in their determination that no foreign organisation must be involved in the handling of the Iranian oil industry, giving way would compromise the principle of nationalisation. The American mediation failed. In the International Bank’s mediation Dr. Musaddiq wanted the Bank to act ‘on behalf of the Iranian Government, within the nationalisation law, and the operating staff to come from neutral countries. This was not acceptable to the British Government. The International Bank’s mediation failed.
The Truman administration provided economic aid to Iran, believing that an economic collapse in Iran would lead to a communist takeover. This annoyed the Churchill administration, by now in power, because the United Kingdom Government was concerned about overthrowing the Musaddiq regime, and protecting British interests in Iran, which meant the oil facilities in Abadan. Sir Anthony Eden, the British Foreign Secretary, was not unhappy that the mediation collapsed, hoping that it would weaken Dr. Musaddiq’s position. Besides the economic considerations which have been touched on, the British Foreign Secretary, Sir Anthony Eden, believed that if the United Kingdom refused to talk, the United States Government would provide economic aid to the government of Dr. Musaddiq in order to prevent an economic collapse in Iran which would lead, in America’s opinion, to a communist takeover of the country. Ironically, the United States was pressing the British Government to negotiate, something which the British Government was willingly doing anyway in order to prevent the United States Government from providing financial assistance to the government of Ur. Musaddiq.
Meanwhile, there was a considerable degree of discontent beginning to show inside Iran. The economic sanctions by Britain and the oil blockade began to have an effect on the Iranian economy. Politicians, land owners, merchants, the army and the Shah became anxious about the economic problems. The Civil Service and the Islamic leaders became increasingly concerned about the economic situation. The Iranian Communist Party, the Tudeh Party, backed the government of Dr. Musaddiq and called for a People’s Democratic Republic. At the same time the Soviet Union announced that they would provide aid to Iran. The backing of the Tudeh Party to the government of Dr. Musaddiq and the fear of the Soviet challenge brought the United States and the United Kingdom together. The American Government saw a basic identity of interest with Britain, maintaining the flow of oil from Iran. The United States viewed the Iranian Government as dangerously unstable in a strategically important part of the world, with its rich oil reserves.
