History of BP Includes Role in 1953 Iran Coup After Nationalization of Oil

Interesting interview linking BP, the CIA, and the rise of modern terrorism in the Middle East. 60 years ago BP was called the Anglo-Iranian Oil Company.

Excerpted from an interview with Stephen Kinzer, author of All the Shah’s Men: An American Coup and the Roots of Middle East Terror.

STEPHEN KINZER: Well, I’ll tell you an interesting story to start off. I was recently on a panel in the National Cathedral in Washington, and one of the other panelists—we were talking about Iran—was Bruce Laingen, who had been the chief American diplomat in Iran and was the most prominent figure among the hostages that were held there for 444 days. And I knew that Laingen had become an advocate of reconciliation with Iran, which I consider quite remarkable, considering the ordeal that he suffered, so I wanted to talk to him. I hadn’t met him before. And we exchanged some emails after that.

He told me an amazing story. He said, “I had been sitting in my solitary cell as a hostage for about a year, when one day the cell door opens, and there is standing one of the hostage takers, one of my jailers. And all of my rage and my fury built up over one year sitting in that cell just burst out, and I started screaming at him, and I was telling him, ‘You have no right to do this! This is cruel, this is inhumane! These people have done nothing! This is a violation of every law of god and man! You cannot take innocent people hostage!’” He said, “I went on like this for several minutes. When I was finally out of breath, the hostage taker paused for a moment, and then he leaned into my cell and said, in very good English, ‘You have no right to complain, because you took our wh*** country hostage in 1953.’”

That story really reinforced to me the connection and the fact that those hostage takers took those hostages not out of nihilistic rage, but for a very specific reason that seemed to make very good sense to them. In 1953, the Iranian people had chased the Shah out, but CIA agents working inside the American embassy in Tehran organized a coup and brought him back. So flash forward to 1979, people of Iran have chased the Shah out again. He has been admitted into the United States.

What happened was that in the first half of the twentieth century, Americans had a super good image in Iran. The only Americans there were doctors and school teachers and people who really were selflessly devoting themselves to Iranians. Meanwhile, the British and the Russians and the French and other colonial powers were ripping Iran apart and stealing and looting everything of value there. So they, people in Iran, had a very high, exalted opinion of the United States, perfect country, the ideal country. And the words of Franklin Roosevelt in all his radio speeches during the Second World War also had a big impact on Iranians. And, of course, there was a big World War II conference in Tehran that just focused Iranians on the ideals of freedom that the Allied powers said they were fighting for.

So in the period after World War II, Iranian nationalism came to focus on one great cause. At the beginning of the twentieth century, as a result of a corrupt deal with the old dying monarchy, one British company, owned mainly by the British government, had taken control of the entire Iranian oil industry. This one company had the exclusive rights to extract, refine, ship and sell Iranian oil, and they paid Iran a very tiny amount. But essentially the entire Iranian oil resource was owned by a company based in England and owned mainly by the British government. That was Anglo-Iranian Petroleum, later to become British Petroleum and BP.

Anyway, what happened was that Prime Minister Mosaddeq, who really was an extraordinary figure in his time, although he’s been somewhat forgotten by history, came to power in 1951 on a wave of nationalism aimed at this one great obsession: we’ve got to take back control of our oil and use the profits for the development of one of the most wretchedly impoverished nations on earth at that time. So the Iranian parliament voted unanimously for a bill to nationalize the Anglo-Iranian Petroleum Company, and Mosaddeq signed it, and he devoted himself during his term of office to carrying out that plan, to nationalize what was then Britain’s largest and most profitable holding anywhere in the world.

Bear in mind that the oil that fueled England all during the 1920s and ’30s and ’40s all came from Iran. The standard of living that people in England enjoyed all during that period was due exclusively to Iranian oil. Britain has no oil. Britain has no colonies that have oil. Every factory in England, every car, every truck, every taxi was running on oil from Iran. The Royal Navy, which was projecting British power all over the world was fueled 100 percent by oil from Iran.

Suddenly, Iran arrives and says, “Oh, we’re taking back the oil now.” So this naturally set off a huge crisis. And that’s the crisis that made Mosaddeq really a big world figure around the early 1950s. At the end of 1951, Time magazine chose him as Man of the Year, and they chose him over Winston Churchill, Douglas MacArthur and Dwight Eisenhower. And they made the right choice, because at that moment Mosaddeq really was the most important person in the world.

Actually, it was at this time that Aramco, the Arab American Oil Company, came into Saudi Arabian, and their deal was a fifty-fifty split, so 50 percent for the country that has the oil and 50 percent for the company that comes in and builds the refinery. That had the air of fairness that ordinary people could understand, but the Anglo-Iranian Oil Company would not give in one inch. And that just made the Iranians more and more radical.

The British tried all sorts of things to bring Mosaddeq down. They imposed a crushing economic embargo on Iran. They required all their oil technicians to leave. Many of them wanted to stay in Iran and work for the nationalized company. The British wouldn’t allow this. So, since they had been very careful not to train anyone how to run the oil refinery, any Iranians, that was the end of the possibility of oil refining. Just in case the Iranians could figure out how to extract any oil, the British imposed a naval embargo around the port, where oil is exported from in Iran. The British took Mosaddeq to the United Nations, they sued him in the World Court, and lost both times. The British were arguing that the Iranian oil industry was their private property and that Mosaddeq had stolen it from them. That was their complaint, but they failed to get any redress in international fora.

So then the British decided they would have to overthrow Mosaddeq, and they started a plot to do that. But Mosaddeq figured out what was happening, and he did the only thing he could have done to protect himself: he closed the British embassy. He sent home all the British diplomats. And among those diplomats were, of course, all the spies and the secret agents that were arranging the coup. So then, the only thing that Prime Minister Churchill could think of to do was to ask Harry Truman, the American president, to do this job for us: Can you please overthrow Mosaddeq, because we don’t have anyone in Iran now that can do it? And Truman said no. Truman believed that the CIA could be a covert action and intelligence-gathering agency, but he never wanted it to get involved in overthrowing governments. So that was the end of the line for Britain, until there was regime change in the United States.

We had the election of 1952. Dwight Eisenhower took office. John Foster Dulles became his secretary of state. And Dulles had spent his wh*** adult life working as a lawyer for giant international corporations. And the idea that a country should be able to get away with nationalizing such a big company, such a big corporate resource, was, as Dulles very well understood, a great threat to the system that he had been representing all his life, the system of multinational enterprise. And he realized that it was in the interest of the United States, as he saw them, to make sure that no such example could be set. So the new administration, the Eisenhower administration, reversed the policy of the Truman administration. They agreed to send a CIA agent, Kermit Roosevelt, to Iran in the summer of 1953. And that’s the story that I tell in my book.

It just took Kermit Roosevelt three weeks in August of 1953—Bag of money and a few other very interesting resources. He was a real-life James Bond. This guy was a real intrepid secret agent, and the story is just amazing how he did this. But it’s really an object lesson in how easy it is for a rich and powerful country to throw a poor and weak country into chaos. So at the end of August 1953, Mosaddeq was overthrown. At the moment, that seemed like a great success. So we got rid of a guy that we didn’t like, and we replaced him with someone else, the Shah, who would do anything we wanted. It seemed like the perfect ending. He was under house arrest for the rest of his life in his village in Iran. So that coup seemed like a success at first. But now, when you look back on it, it serves as a fascinating object lesson in unintended consequences.

Just very briefly, we placed the Shah back on his peacock throne. The Shah ruled with increasing repression for twenty-five years. His repression set off the explosion of the late 1970s, what we call the Islamic Revolution. That revolution brought to power a clique of fanatically anti-American mullahs. That revolution also inspired radicals in other countries, like next-door Afghanistan, where the Taliban came to power and gave shelter to al-Qaeda with results we all know. That instability in Iran that followed that revolution also led Iran’s great enemy next door, Saddam Hussein, to invade Iran. That not only set off an eight-year war between Iran and Iraq, but it also brought the United States into its death embrace with Saddam. We were the military allies of Saddam during the Iran-Iraq War, and we were supplying Saddam with military intelligence, with Bell helicopters that he used to spray gas on Iranian positions. President Reagan sent a special envoy twice to Baghdad to negotiate with Saddam and ask him how we could help him. And, of course, that envoy was Donald Rumsfeld. So that instability set off by that revolution also led the United States into the spiral in Iraq that brought us to the point where we are now.

That revolution in Iran also spooked the Soviets. They were terrified that there would be copycat fundamentalist revolutions all along their southern flank. And to prevent that, they invaded Afghanistan. That brought the United States into its position in Afghanistan, where we brought Osama bin Laden there, we trained all these tens of thousands of jihadis in how to kill infidels, which they later became the Taliban. We later became the infidels they wanted to kill. So why is this all so important for today?

They call it in the CIA “walking back the cat.” You can walk back the cat endlessly on this one. And the reason the story is so relevant is that it tells us the main thing you need to know in a****sing the current idea of an attack on Iran, which is the worst consequences are ones you can’t even imagine. Not even the wisest analysts, the most prescient specialists, in 1953 could ever have imagined all these consequences. Ah, the Shah’s going to fall; there’s going to be mullahs in power; the Soviets are going to invade Afghanistan; all these other things will happen. It shows you that when you violently interfere in the affairs of another country, you’re like setting off a wheel at the top of a hill. You let it go; you have no idea how it’s going to bounce.

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