Hotheads and Fanatics
June 22, 1951 — The Age
This was the lead editorial in major Australian newspaper The Age on Friday, June 22, 1951.
PERSIAN OIL CRISIS A SERIOUS THREAT
MOVES by the Persian Government to seize the vast oil works of the Anglo-Iranian Oil Co., and its rejection of all overtures for working out an acceptable basis on which oil could be kept flowing, bring a situation fraught with serious possibilities.
So much is at stake that the British Government, as predominant holder in the undertaking, could not submit to an act of gross expropriation. If the British were to be bundled out, a shattering blow to British prestige throughout Asia would be given. Elsewhere in the Middle East, notably Irak, [Iraq] Saudi Arabia and Kuwait, where there are British-American oil undertakings, incipient moves for a similar expropriation would gain a strong impetus.
Britain must refuse to be ousted on one-sided conditions, at the behest of hotheads and fanatics. There can be no denying Persian sovereignty, and valid grounds for criticism of aspects of the companies past dealings with the Persian Government may exist. The company might have blunted the edge of nationalisation demands by a more liberal basis of realities, such as the 50-50 terms conceded by the Americans in Saudi Arabia. There has probably been procrastination and evasion, with a lack of frankness on delivery policies to which the company was committed.
But when these things are admitted, there is an impressive total on the credit side of the picture, in high wages rates, good conditions for workers and liberal provision of housing, schools, hospitals, training facilities for Persians, and amenities. The company’s legal rights are undeniable.
By the 1933 agreement ratified by the then Persian Parliament, the period of the concession was extended from 1961 to 1993. One of the terms was that any outstanding difference should be referred to outside arbitration. Every provision is now being repudiated, the Persians refusing to acknowledge that the International Court has any jurisdiction.
British capital, enterprise and technical skill have built up a colossal asset which today is a major source of oil and petrol supplies to the Western world. The refinery at Abadan, the largest in the world, reached a production rate of 25,000,000 tons yearly in 1943.
Obviously this huge enterprise, with the fleet of British tankers indispensable to the marketing and delivering of oil and petrol to many consuming countries, including Australia, is of vital importance to the whole British Commonwealth. Everything points to the conclusion that Britain must stand firm and refused to be forced out.
Were Britain to be denied access to these sources of supply and dispossessed of plant and equipment built up over 40 years at prodigious cost, the balance between East and West would be gravely upset. A material subtraction from the economic strength of the British Commonwealth and the Western world would be made. Whatever benefits were to accrue from such a violation of Britain’s rights would fall into the lap of the Soviet empire, which has long cast covetous eyes oil fields and open-sea outlets on the Persian Gulf.
Even at this hour it is hoped that the way to a composition will be found, and that the oil will continue to flow, not for the sake of making profits, but to serve the world’s industrial needs and the real interests of the Persians themselves.