AFTER long negotiations, an agreement has at last been reached between the Persian Government, the National Iranian Oil Company and a consortium of eight other oil companies, which will place Persian oil, both crude and refined, back on the world markets. This success for the West has been lost sight of here, in the concern over the South-East Asian crisis: but it is a considerable one, which reflects credit on all concerned. [referring to Thailand and the Philippines]

Nobody has “triumphed:” and this is, perhaps, the best hope that the agreement will endure. Persia admits eight members of the international oil industry to work the oilfields and refineries which she could not keep going: and she has lost three years’ revenues from oil. On the other hand, the Anglo-Iranian Company, dispossessed in 1951, appears to be somewhat poorly compensated for its lost refineries and installations, and is only to have a two-fifths share in future operations.

The problem of the Persian Government in the oil negotiation, was to make offers attractive enough to tempt the foreign investor back, without arousing hostile nationalist reactions at home. On the other side, the consortium of oil companies had to be prevented from “dragging their feet” by their Governments. They have no great need of Persian oil now: and their investments in neighbouring States might be endangered if they gave the impression that it paid to maltreat foreign companies. There were perils in over-generosity, with the Arabs round about watching like hawks to see if Persia was going to get a better bargain through “playing up.” On the other hand, a stable, industrialized, friendly Persian Kingdom is a strong political asset to the Western world in designing its defence system for the Middle East.

Thanks to courtesy and “sweet reasonableness” on either side, together with a hard perception of economic and political realities, these obstacles have been surmounted. The Arabs can see that the Persians are getting no better terms than they themselves already have—at a cost of heavy losses which they have not incurred. The Persians, on their part, have no longer the excuse for looking upon their relation with the oil companies as those between a “Western exploiter” and his “victim.” The amendment of past errors gives hope for popular support for the agreement in Persia; while it should bring to an end a period of somewhat feverish speculation among oil investors in Anglo-Iranian. The company may now, perhaps, enter upon a time of maturity free from major trouble.

The chief Persian negotiator, Dr. Amini, has been successful in eliminating the prejudices of some of his compatriots in the administration. [Ali Amini] The influence of the Shah, which is now supreme in Persia, is expected to do the same in the Majliss (the Persian Parliament) when the new pact comes up to be ratified there. [Majles]