British Diplomatic Oil Crisis: Contemporary Anglo-Saxon Geopolitical Rivalries in the Persian Gulf: Drawing a Lesson? Or Sir Anthony Eden‘s Delusion of Grandeur.

After the
Second World War criticism of the Iranian share of the
Anglo- Iranian Oil Company emerged, and demand for the
nationalisation of the company began to grow in Iran. Post-war oil
production in Iran had been moving up, from 19.2 million tons in
1945 to nearly 20.2 million in 1946 and on its way towards 24.9
million in 1947. The Anglo-Iranian Oil Company was hesitant about
how far it could safely go to improve the level of payments to
Iran.13

Venezuela had negotiated an
oil concession agreement giving it a
50:50 share in profits, and the Iranians saw no reason why they
should not have the same. Furthermore, gold price was used to
calculate the Anglo-Iranian Oil Company’s tonnage royalties. The
market value of gold was much higher in the bazaars of Teheran than
in New York or London. The Iranians felt they were being cheated,
both over their royalty income and over their dividend-related
receipt. The Iranian economy was under considerable pressure. A
Seven-Year Plan had been drawn up for the period 1949-1956, and
royalties were the only conceivable way to finance it. The plan was
a long-term programme, providing for heavy expenditure on
infrastructure and on social improvement, for example, in education.
It was therefore not likely to produce short-term economic gains,
but these were just what the Iranian people, and most likely the
Iranian Parliament or the Majlis, expected from it. The final blow
came when the Arabian-American Oil Company (ARAMCO) reached a 50:50
profit-sharing agreement with the Saudi Government, which was
announced in December 1950. On 20th March 1951 the Majlis approved a
recommendation from the Oil Committee for the nationalisation of the
Anglo-Iranian Oil Company; on 28th April it passed a bill to
implement this nationalisation. 14

In the subsequent chapters
of this book I shall be concentrating on
British

foreign policy toward Iran,
regarding the nationalisation of the
Anglo-Iranian Oil