Iran made two attempts to free its oil fields from Western domination. Since the Islamic revolution of Ayatollah Khomeini in 1979, Iran has kept Western companies out. They paid a huge price, a trade embargo lasting some 40 years. Is a new attack on Iran in the offing?
In 1890, Australian colonial lawyer William Knox D’Arcy returned to London with just shy of one quarter of a billion dollars in today’s money, made by tricking his business partners in Queensland’s fabulous Mount Morgan gold mine out of their full share.
In London, D’Arcy kept looking for new mining opportunities. In 1901 then Shah of Persia, Mozzafah al-Din, assigned D’Arcy the rights to discover and extract oil from 60% of Persia (in the British sphere of influence) for 60 years – this was “The D’Arcy Concession”. For this magnificent agreement the Shah received an upfront payment of £20,000 cash (£2.2 million today) and a contract promising 16% of future profits.
D’Arcy Anglo-Persian Oil Ltd discovered commercial quantities of oil in 1908. The British Admiralty, desperate for oil supplies for fuelling their fleet, soon purchased a majority in D’Arcy’s company, which over time became British Petroleum (BP). Needless to say, the British also paid almost none of the 16% of profits to the Shah, money that Persia needed from this one major export. British Indian Army regiments were positioned all along oil pipeline and at Abadan refinery which opened in 1912, ensuring that Persia could only complain.
In 1941, the British installed a young Shah, Mohammad Reza Pahlavi, and the robbery of oil profits continued uninterrupted until 1951. Then Mohammed Mossadegh became Prime Minister of Iran and sought audited accounts from Anglo-Persian Oil. These were refused, stimulating the Iranian Parliament to nationalise Persian oil after nearly six decades of unbridled exploitation. Persian oil was then instantly embargoed by Britain and the USA. Two years later in 1953, the CIA engineered a coup to re-install Shah Mohammad Reza Pahlavi as absolute ruler. BP agreed a greater share, “but not to open its books, or allow Iranians onto its board of directors”. US oil companies also joined in exploiting the de-nationalised oil fields.
In 1979, Shah Pahlavi’s secret police and army were overthrown in a popular revolt under Ayatollah Khomeini, who led the new Islamic Republic of Iran. He promptly re-nationalised Iran’s oil fields without compensation. In Pavlovian reaction, America reinstituted a trade embargo on goods moving in and out of Iran. George W. Bush later declared Iran as ‘The Axis of Evil’, and the US-led trade embargo has persisted to the present day.
Westerners typically view Middle-Eastern countries as uncivilised and corrupt. We are fed a continuous diet of negative stories about most Islamic countries. Iran is only ever presented as a rogue nuclear state, and as a supporter of Islamic terrorism. The two Iranian leaders who resisted Western exploitation are portrayed as ‘dangerous revolutionaries’. Mohammed Mossadegh was vilified as a communist, justifiably overthrown in a CIA coup, and Ayatollah Khomeini was portrayed as a demented religious extremist, despite initial universal acclaim by Iranians for his toppling of the despised Shah regime.
America did not stop at an embargo against Iran. It soon funded and supplied advanced weapons to Saddam Hussein, encouraging neighbouring Iraq to invade disputed territory of Iran. The war raged for 8 years (1980-88), ostensibly over territory, but also over religious differences.
Iraq had fully nationalised its oil fields in 1973 under Saddam Hussein. Remarkably in 2003, America (with ‘forces of the willing’ – UK, Australia, Poland) invaded Iraq claiming it had ‘Weapons of Mass Destruction’, while US special forces invaded ‘the Iraqi oil fields to secure them to retain production capacity’. In 2005, the Iraqi Oil Marketing Organisation (SOMO), contracted ongoing sale of Iraqi oil to BP, Shell, and ChevronTexaco. Bush era US vice president Dick Cheney subsequently revealed the US-Iraq war was pre-planned in conjunction with US oil companies, saying the US simply needed ‘an excuse to act’. Iraqi oil is now produced by international companies, 80% is exported, leaving little for local use, leaving political tensions high because of dire economic constraints. Iraq now receives little financial benefit from its oil.
The contrast between Iraqi and Iranian oil fields is clear. Despite the 40 year trade embargo, Iran continues to be the master of its own oil industry, selling to countries who defy the USA. This sovereignty of Iran places it in a league with countries like Norway and Qatar, both which receive full financial benefit from their oil fields. Norway did not have to fight wars with Britain and America to enjoy this benefit. Iran was forced to wrest back their oil-fields on two occasions, because profits were not shared fairly by Western companies.
There is now intense military tension in the Middle East. The US has seen attacks on its bases in Jordan, and elsewhere. Western legacy media is also awash with the perfidy of Iran’s government, and the danger Iran presents to Israel and to US bases in the Middle East.
The Israel-Hamas war in Gaza has seen the deaths of almost 40,000 Palestinians, and likely many fold more under the 150,000 bombed buildings. Despite international demands for the killing of civilians to stop, Israel is unilaterally escalating war into the West Bank of Palestine, and into the Lebanon and possibly Iran. The murder of Gaza’s peace negotiator Ismail Haniyeh in Tehran on 31st July, surely ended Israel’s pretence of negotiating a ceasefire with Hamas, as demanded by both the UN and USA. Since these assassinations, Israel has intensified its bombing of Gazan civilians, and has accelerated its expulsion of Palestinians from their own properties in the West Bank to establish more ‘Jewish settlements’, while goading Iran and its allies to launch a response.
The USA will support Israel fully, even if it initially limits its attacks to Hezbollah forces in the Lebanon, which could quickly see US forces brought into the conflict. A US submarine and surface ships are now being brought into the war region.
With the upcoming US presidential election looming, there is the prospect that a new US president could use conflict between Israel and Iran as cover to punish Iran. Regaining control of Iranian oil for US oil companies would be a victory for muscular US foreign policy, re-establishing its military dominance in the Middle East after Biden’s withdrawal. The desire for such an outcome could become urgent, as the opportunity for US companies to profit directly from the world’s largest producing oil field will diminish if global warming reduces the acceptability of fossil fuels.
Keith Mitchelson
Keith Mitchelson has a 40-year experience in academic and commercial biotechnology sectors in the UK, China, and Australia.
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