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

the need
to conclude a long-term contract for oil supplies to the
Navy. As the counterpart to a favourably priced contract,

in 1914 an agreement was
made between Treasury and the Company which
was directed to ensuring supplies of fuel oil for the Navy and to
making sure that these supplies, which would be required in
increasing quantities, were purchased by the Government at
reasonable prices. His Majesty’s Government subscribed to the
Company a total of £3,300,000. They became entitled to appoint two
Government Directors: and held by virtue of their capital
subscription a majority of the share votes. (The situation at the
present date is that His Majesty’s Government. has a majority share
holding, 55.86% of the ordinary shares, and a majority also of
votes, 52-55%) The arrangement between Treasury and the Company
conferred on the Government Directors a right of veto which,
however, the Government undertook not to exercise except in certain
circumstances.2

In 1919,
by which time war time experience had amply justified the
involvement, the British Government put in another £3 million.

1931 turned out to be
disastrous for the Anglo- Persian Oil
Company’s profits due to the Depression, so the royalties fell to
just over £300,000, not much more than a fifth of their level two
years earlier. The Shah, who was ambitious and looked to the oil
royalties to modernise his country, and to arm it with warships and
other weapons systems, became disappointed with the Company and
cancelled the concession on 27th November, 1932. This led to a
formal complaint by the British Government against Iran in the
Council of the League of Nations. However, before the case was
heard, under the auspices of the League