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

American
Ambassador, L. Henderson, held talks with the Iranian Prime
Minister, Dr. Musaddiq, to make a further attempt to solve the
crisis of the Anglo-Iranian Oil Company. The British Foreign
Secretary, Anthony Eden, said that:

If we
decline to make any fresh overtures to the Persian Government
basing ourselves on the view that no satisfactory agreement could
ever be made with Dr. Musaddiq, there was real danger that the
United States Government would make an independent offer of
financial assistance to Persia with the object of preventing the
establishment of a ‘Communist regime’.50

On 30th
August, Winston Churchill and President Truman sent a joint
note to Iran, which outlined a broad formula for the settlement of
the dispute. The new Anglo-American proposals were that the whole
question of the Anglo-Iranian Oil Company’s compensation should be
submitted to arbitration. The British Foreign Secretary said that,
‘we were in principle prepared to see the oil dispute referred to
arbitration.’ 51

To start with, Iran had to

agree to
the submission of the compensation question to the
International Court of Justice, having regard to the legal position
of the parties existing immediately prior nationalisation and to all
claims and counter-claims of both parties.52

Secondly,
‘suitable representatives shall be appointed to represent
the Iranian Government and the AIOC in negotiations for making
arrangements for