'The US had a great deal going from 1953 to 1979 with the Shah of Iran. For 25 years Iran was a cornerstone of the US usurping the British Empire in the Middle East, following World War Two. Iran was a base for projecting US power in the region, and strategically it bordered the Soviet Union during the Cold War.
During the early 20th century the British Empire had full control of Iran’s oil industry, and was paying Iran a flat fee for every barrel of oil it extracted. A rough calculation of Iran’s royalties is between 8% to 16% of the profits, but Iran was never allowed to look at the financial books. [*]
Prior to the CIA-led 1953 overthrow of the democratically elected Prime Minister Mohammed Mossadegh, Iran demanded 50% of the profits and control of their oil industry. That was not unreasonable, but Iran was willing to negotiate. At the time, the US oil companies had a 50/50 profit sharing agreement with Saudi Arabia.
The British refused any negotiated settlement. It was then that the Iranian parliament led by Mossadegh voted to nationalized Iran’s oil industry. The British responded with a naval blockade, and began plotting to overthrow Mossadegh and the parliament. As the Prime Minister, Mossadegh held the most political power in Iran because the people were behind him. The Shah of Iran was mostly a figurehead, at the time. [*]
President Harry Truman was adamantly against British style colonialism and sided with Iran, which infuriated the U.K. When President Dwight D. Eisenhower took office in 1953, he sided with the British. Eisenhower and Churchill plotted a coup d’état to overthrow Mossadegh. The frightened Shah, who was in on the plot, fled from Iran before the coup attempt just in case anything went wrong. The first attempt did fail. A second daring CIA-led coup succeeded and the US reinstalled Mohammad Reza Pahlavi as the Shah of Iran, with dictatorial power.
By its intervention, however, the US broke the British Empire’s monopoly on Iran’s oil. That was part of the US’ calculous. After the coup, US oil companies got 40% of Iran’s oil industry, 14% went to Royal Dutch-Shell, 6 % went to the French Petroleum Company, and the British oil company kept 40%. In addition, Iran got its 50/50 share of the net profits that it wanted in the first place. The US immediately sent financial aid to prop up the Shah, and to bolster Iran’s weakened economy from the British blockade.
If the British had initially been flexible, renegotiated a 50/50 oil deal with Prime Minister Mossadegh, then it would have made a coup less likely. Iran was developing a secular democratic government. It might have become a model for other post-colonial countries in the Middle East. Democracy and self-determination are what the US said its world mission was going back to President Woodrow Wilson in 1918:'
Read more: The US Wants to Bring Back the Shah of Iran
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