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

east Asia,
Abadan became the major source of petroleum products to
sustain the Allied war effort in India and the Pacific. AIOC’s
labour force in Khuzistan more than doubled, from 32,000 to 68,000,
with the Company (helped by the Middle East Supply Centre in Cairo),
having to meet their needs for housing, food and all requirements.
Abadan was developed into a ship repair centre. A major plant for
the produce of 100-octane aviation spirit was built; this proved
invaluable for wartime supplies to all the Allies, including the
Soviet Union. In 1945, oil production in Iran was 19.2 million tons,
well above the pre-war peak of 10.2 million tons.

The Soviet Union’s
involvement in Iran led, ironically, to a further
revision of the agreement between the Anglo-Iranian Oil Company and
the Iranian Government. AICC’s concession area did not include the
five northern provinces of Iran. There was therefore room available
for other companies to seek concessions. In 1943 there were
tentative approaches from Shell and from two American companies,
although these came to nothing. More seriously, strong pressure for
a concession in the north was mounted by the Soviet Union in the
second half of 1944. When the issue came to the Majlis in December
1944, nationalist sentiment led to the passage of a bill prohibiting
negotiations for the letting of any oil concession to foreigners.
The mover of the bill was Dr. Muhammad Musaddiq. The continuing
Soviet demand for a concession in the northern provinces was coupled
with their refusal to leave Iran within six months of the end of the
war as they had promised (parallel to the British evacuation of the
south). Under Soviet protection an autonomous regime was established
in the Iranian province of Azerbaijan, virtually a Communist
republic. The Iranian Government was determined to get rid of the
Soviet troops. To achieve this they were prepared to compromise over
an oil concession. On 4th April 1946, an agreement was signed in
Teheran granting concession to a company 51% owned by the Soviet
Government. However, the concession was subject to ratification by
the Majlis under the law passed in 1944 on the insistence of Dr.
Musaddiq. By

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