The nationalization of the oil industry, approved by Iran’s parliament
on March 20, 1951, marked a major political and economic victory for the
country. It was followed by the expulsion of the Anglo-Iranian Oil Company from
its operations and mass demonstrations supporting Mosaddegh’s government on
July 21, 1952.
Yet just over a year later, Mosaddegh’s government was overthrown.
Khodadadian argues that the reversal cannot be explained by a single
factor. The economic impact of the oil embargo, declining public support,
political miscalculations and British and US intervention all contributed to
the conditions that preceded the coup.
Oil embargo deepened economic pressure
The loss of oil revenues placed severe pressure on Iran’s economy
after nationalization.
According to official production statistics cited by Khodadadian, the
Anglo-Iranian Oil Company produced an average of about 561,000 barrels a day
in the year before nationalization, with annual output reaching 204.7 million
barrels in 1949.
Production rose to about 664,000 barrels a day, or 242.5
million barrels for the year, in 1950. By 1953, however, output had collapsed
to about 26,800 barrels a day, with annual production falling to just
9.8 million barrels.
The sharp decline deprived the government of a major source of revenue
at a time when the country was already under significant economic pressure.
Attempts to offset the shock, including the issuance of national bonds, failed
to generate a comparable economic boost, according to the analysis.
Khodadadian argues that the resulting economic difficulties, combined
with political developments and foreign intervention, helped transform the mass
support seen for Mosaddegh in 1952 into relative public passivity by August
1953.
British and US role
Declassified documents released over subsequent decades have provided
extensive evidence of British and US involvement in efforts to remove
Mosaddegh.
Former British Foreign Secretary Jack Straw discusses the episode in
his book The English Job, including British intelligence activities in
Iran and the role of the Anglo-Iranian Oil Company in gathering information.
Straw also refers to planning documents prepared by US intelligence
operative Donald Wilber describing the operation against Mosaddegh. According
to figures cited in Straw’s account, the initial cost of the operation was
estimated at about $285,000, with the US contributing $147,500 and
Britain’s Secret Intelligence Service contributing $137,000.
Additional funds were allocated to support a replacement government
under Fazlollah Zahedi, while money was also designated for efforts to secure
parliamentary backing and support the new government following the coup.
The documents cited by Straw reinforce the historical assessment that
foreign intelligence services played a central role in the overthrow of
Mosaddegh’s government, with assistance from domestic actors.
Nationalization survived the coup
Although Mosaddegh’s government fell, the nationalization of Iran’s
oil industry was not reversed.
A year after the coup, an international consortium of oil companies
assumed responsibility for oil production and development activities under the
oversight of the National Iranian Oil Company. Iranian oil production
subsequently expanded dramatically, eventually reaching a record daily output
of about 6.6 million barrels, according to the cited production
statistics.
The lasting legacy of nationalization was the end of the Anglo-Iranian
Oil Company’s monopoly over Iran’s oil resources and the creation of a more
competitive environment involving multiple international oil companies.
The political authorities of the time described the Aug. 19, 1953
events as a “national uprising,” but the episode has since been widely
documented and studied as a coup that removed Mosaddegh from power.
Farshid Khodadadian is a researcher of oil history and industrial
heritage.