The tragic and senseless story of Persian oil is moving into its most dangerous chapter, and at this moment everybody stands to suffer heavily except Communist Russia.

Persia is already suffering, having allowed the negotiations with the British government to founder on the twin rocks of assassination threats and a stubborn frenzy of nationalistic fervor. Unemployment is mounting as the big oil fields shut down, and the government has launched a five-year agricultural plan to provide jobs for thousands who used to work for the old Anglo-Iranian Oil Company.

Simultaneously, fear of the consequences of the Persian government’s failure to make a deal with Britain is beginning to spread, and threatens to cause an internal political crisis. Still further, the Persian government has lost the huge oil revenues on which it depended so heavily.

The last British offer to Persia went a very long way towards recognizing Persia’s national aspirations. Britain would give up the $1,000,000,000 industry it had created and turn it over to Persia entirely. It would then set up a new British company to buy the oil and re-sell it, turning over half the profits to Persia. A joint Persian-British company would handle the technical end, with the Persians nominally in control but with British technicians managing operations.

Persia, in the full knowledge that British technicians were vital to production and that there was no other way of marketing the oil, turned the offer down. The only explanation seems to be that suspicion and fear have over-ridden all reason, and that Persia is bent on economic suicide.

Without the oil industry, Persia’s economy will almost surely lapse into chaos. Ever since 1933 it had depended on oil revenues. Between 1933 and 1949, at least 15 per cent of government revenue came from oil.

In 1949, Britain made a new offer which would have doubled this figure, guaranteeing annual payments to Persia which would have added up to one-third of the national revenue. In 1950 alone, with back payments, the company would have paid Persia about $135,000,000, compared to government revenue from all other sources of only about $120,000,000. Persia turned the offer down.

The latest offer reportedly would have tripled the amount of royalties payable to the Persians. But Persia still says no, like a starving miser refusing to sell a valuable gem in order to buy food.

Persia now has a vast oil industry with no way of running it and no customers even if it could. It has lost its biggest source of revenue. It has a political crisis boiling up at home. It stands to lose the benefit of schools, technical training centres, a health scheme and numerous other welfare projects set up by the British government’s oil company, including an annual expenditure of $24,000,000 on new houses.

The time is almost ripe for Persia to become a poverty-stricken power vacuum. It is hard to imagine a situation more to Russia’s liking.