Settled Score
August 9, 1954 — The San Bernardino County Sun

The Mossadegh Project | January 3, 2016                     

The San Bernardino County Sun newspaper in Southern California displayed more of its ample ignorance in this lead editorial on the 1954 oil consortium.

Iran Oil Consortium | Archive of Documents (1953-1954)

Iran Oil Dispute Ends

After three years of private haggling, diplomatic representations and repercussions that threatened to inflame the whole Middle East, apparently the volatile Iran oil situation is on the way to amicable solution.

When the then Iranian Premier Mohammed Mossadegh ordered nationalization of the country’s oil industry and seized the vast properties of the British-controlled Anglo-Iranian company, he set in motion a chain of developments that disturbed the whole world.

The British company refused to abide by Mossadegh’s decision, withdrew its technicians and shut down oil production, including the big Abadan refinery. The nation’s chief source of revenue was seriously impaired, but Mossadegh held firm. So did the British.

Mossadegh said he would reopen the oil fields if he found it necessary to call in experts from the Soviet Union. [he never said this] This was the opportunity that Moscow was waiting for and the Kremlin heartily concurred in Mossadegh’s proposal.

But the premier lacked the power to go so far alone and the Iranian government refused to extend him more. He quit the government, but was called back again after his absence of three days led to serious street rioting that threatened to develop into a general uprising. [July 1952] However, there was little extension of power granted him and his relations with the Shah began to deteriorate.

Eventually the Shah was forced to leave the country, [he chose to leave] but his departure unexpectedly removed a lot of Mossadegh’s personal popularity.

A rebellion eventually broke out against him and the Shah returned to his country to take command of the situation. Mossadegh was imprisoned and tried for treasonable acts. The Shah was inclined toward leniency throughout the proceedings and refused to ask for Mossadegh’s life.

The negotiations again were made possible. Iran stood by its nationalization of the oil industry, but agreed to deal with the Anglo-Iranian company. [Anglo-Iranian Oil Company] The British firm wanted half a billion dollars for its holdings and to compensate it for the 39 more years its contract with Iran was to be honored. It was a stumbling block, but proved not insurmountable.

The final settlement provided that Anglo-Iranian [AIOC] would receive 87 million dollars for its rights and would share with other oil companies, including five American, in the right to operate the oil industry for Iran. The American companies were brought into the picture on the insistence of the Iranian government, apparently wanting closer ties with the U.S.

The new agreement will run for 25 years and there are provisions for three additional 5-year extensions. It is estimated that Iran will get 420 million dollars through taxes and a split in the profits during the first three years of operation.

Representatives of the interested oil companies say they can get the fields into production within a very short period. The oil will be exported to various parts of the world and some of it likely will be put on the American market.

The Iranian oil fields are of tremendous importance to the Western Powers and would be of even greater impact in case of war. By controlling the marketing of the Middle East oil basin, it means an adequate nearby source of supply should the Communists start on the move across Europe. Were Iranian oil in the hands of the Soviet, [sic] that movement might take place at any moment.

It is not difficult to see the tremendous importance of the new agreement to reopen the Iranian fields. Not only is it possible for it to serve as an instrument of peace, but may prove a deterrent to war. The fact that the Middle East and the Western Powers are brought closer together is also a factor not to be overlooked.

If the difficulties with Egypt over control of the Suez Canal can be settled amicably, it might be said that the cold war is not going entirely in favor of the Communists.

Divvying Up the Loot: The Iran Oil Consortium Agreement of 1954
Divvying Up the Loot: The Iran Oil Consortium Agreement of 1954


Related links:

Mossadegh Treated Well | The San Bernardino County Sun, December 24, 1953

Iran Faces The Future | The Times Record, August 6, 1954

Iran Back In Business | The Leader-Republican, February 2, 1954

MOSSADEGH t-shirts — “If I sit silently, I have sinned”

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