Abadan Crisis
Encyclopedia
The Abadan Crisis occurred from 1951 to 1954, after Iran
nationalised the Iranian assets of the Anglo-Iranian Oil Company
(AIOC) and expelled Western companies from oil refineries in the city of Abadan (see Abadan Refinery
).
's "single largest overseas asset" and a "source of national pride" in the British post-war era of Clement Attlee
, and Ernest Bevin
. Even as late as the "1940s and early 1950s some high British officials still believed that Persian petroleum was actually and rightly British petroleum because it had been discovered by the British, developed by British capital, and exploited through British skill and British ingenuity."
In stark contrast, Premier Mosaddeq believed the 1933 concession granted to the AIOC by Iran was "immoral as well as illegal". Mosaddeq "challenged every aspect of the British commercial presence in Iran". The British feared that if Mosaddeq's policies prevailed, "nationalists throughout the world could abrogate British concessions with impunity."
British warships blockaded Abadan. On 22 August, the British cabinet imposed a series of economic sanctions
on Iran. It prohibited exports of key British commodities, including sugar and steel, directed the withdrawal of all British personnel from Iranian oil fields and all but a hard core of about 300 administrators from Abadan and blocked Iran's access to its hard currency accounts in British banks.
After the withdrawal of the British workers in the fall of 1951, the Iranians felt confident that they could easily hire non-British technicians to run the industry and then quickly train their own nationals to replace them. Unfortunately, this did not prove to be the case; the United States, Sweden, Belgium, the Netherlands, Pakistan, and Germany all refused to make their technicians available to the nationalized Iranian industry. Only Italy complied, demonstrating that most industrialized countries supported Britain over Iran in the nationalization dispute."
In July 1952, the Royal Navy
intercepted the Italian tanker Rose Mary and forced it into the British protectorate of Aden
on the grounds that the ship's petroleum was stolen property. News that the Royal Navy was intercepting tankers carrying Iranian oil scared off other tankers and effectively shut down oil exports from Iran.
Mohammed Mossadegh was ousted from power. During the coup, codenamed Operation Ajax, the CIA and the MI6 restored Mohammad Reza Pahlavi
to power. In August 1954, the company was set under the control of an international consortium
. Initially, ownership shares in the Consortium proposed to be divided along the following lines: 40% to be divided equally (8% each) among the five major American companies; British Petroleum
to have a 40% share; Royal Dutch/Shell
to have 14%; and CFP, a French Company, to receive 6%. Iran got now 25% of the profits compared to 20% of the original treaty with the AIOC. Saudi-Arabia and other oil-exploiting countries of the region received up to 50% of the profits in cooperation with American oil companies at the same time.
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
nationalised the Iranian assets of the Anglo-Iranian Oil Company
Anglo-Persian Oil Company
The Anglo-Persian Oil Company was founded in 1908 following the discovery of a large oil field in Masjed Soleiman, Iran. It was the first company to extract petroleum from the Middle East...
(AIOC) and expelled Western companies from oil refineries in the city of Abadan (see Abadan Refinery
Abadan Refinery
The Abadan refinery was located in Abadan near the coast of the Persian Gulf. It was completed in 1912 and was one of world's largest oil refineries when it was destroyed in 1980 by Iraq in the Iraq-Iran war. Its nationalisation in 1951 prompted the Abadan Crisis and ultimately the toppling of the...
).
Prelude
The AIOC was the United KingdomUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
's "single largest overseas asset" and a "source of national pride" in the British post-war era of Clement Attlee
Clement Attlee
Clement Richard Attlee, 1st Earl Attlee, KG, OM, CH, PC, FRS was a British Labour politician who served as the Prime Minister of the United Kingdom from 1945 to 1951, and as the Leader of the Labour Party from 1935 to 1955...
, and Ernest Bevin
Ernest Bevin
Ernest Bevin was a British trade union leader and Labour politician. He served as general secretary of the powerful Transport and General Workers' Union from 1922 to 1945, as Minister of Labour in the war-time coalition government, and as Foreign Secretary in the post-war Labour Government.-Early...
. Even as late as the "1940s and early 1950s some high British officials still believed that Persian petroleum was actually and rightly British petroleum because it had been discovered by the British, developed by British capital, and exploited through British skill and British ingenuity."
In stark contrast, Premier Mosaddeq believed the 1933 concession granted to the AIOC by Iran was "immoral as well as illegal". Mosaddeq "challenged every aspect of the British commercial presence in Iran". The British feared that if Mosaddeq's policies prevailed, "nationalists throughout the world could abrogate British concessions with impunity."
Nationalisation
The AIOC was nationalized by the Iranian Parliament in March 1951. In Iran this was enormously popular and seen as a long overdue staunching of its national wealth which could now be harnessed to fighting poverty in Iran. In Britain the nationalisation was widely seen as an intolerable breach of contract or theft. British emissaries in the United States after the nationalisation, argued that allowing Iran to nationalise the oil company "would be widely regarded as a victory for the Russians" and would also "cause a loss of one hundred million pounds per annum in the United Kingdom's balance of payments, thus seriously affecting our rearmament program and our cost of living."British warships blockaded Abadan. On 22 August, the British cabinet imposed a series of economic sanctions
Economic sanctions
Economic sanctions are domestic penalties applied by one country on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas...
on Iran. It prohibited exports of key British commodities, including sugar and steel, directed the withdrawal of all British personnel from Iranian oil fields and all but a hard core of about 300 administrators from Abadan and blocked Iran's access to its hard currency accounts in British banks.
After the withdrawal of the British workers in the fall of 1951, the Iranians felt confident that they could easily hire non-British technicians to run the industry and then quickly train their own nationals to replace them. Unfortunately, this did not prove to be the case; the United States, Sweden, Belgium, the Netherlands, Pakistan, and Germany all refused to make their technicians available to the nationalized Iranian industry. Only Italy complied, demonstrating that most industrialized countries supported Britain over Iran in the nationalization dispute."
In July 1952, the Royal Navy
Royal Navy
The Royal Navy is the naval warfare service branch of the British Armed Forces. Founded in the 16th century, it is the oldest service branch and is known as the Senior Service...
intercepted the Italian tanker Rose Mary and forced it into the British protectorate of Aden
Aden
Aden is a seaport city in Yemen, located by the eastern approach to the Red Sea , some 170 kilometres east of Bab-el-Mandeb. Its population is approximately 800,000. Aden's ancient, natural harbour lies in the crater of an extinct volcano which now forms a peninsula, joined to the mainland by a...
on the grounds that the ship's petroleum was stolen property. News that the Royal Navy was intercepting tankers carrying Iranian oil scared off other tankers and effectively shut down oil exports from Iran.
Coup d'état
As a result of the crisis, Iranian Prime MinisterPrime Minister of Iran
Prime Minister of Iran was a political post in Iran that had existed during several different periods of time starting with the Qajar era until its most recent revival from 1979 to 1989 following the Iranian Revolution.-Prime Ministers of Qajar era:In the Qajar era, prime ministers were known by...
Mohammed Mossadegh was ousted from power. During the coup, codenamed Operation Ajax, the CIA and the MI6 restored Mohammad Reza Pahlavi
Mohammad Reza Pahlavi
Mohammad Rezā Shāh Pahlavi, Shah of Iran, Shah of Persia , ruled Iran from 16 September 1941 until his overthrow by the Iranian Revolution on 11 February 1979...
to power. In August 1954, the company was set under the control of an international consortium
Consortium
A consortium is an association of two or more individuals, companies, organizations or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal....
. Initially, ownership shares in the Consortium proposed to be divided along the following lines: 40% to be divided equally (8% each) among the five major American companies; British Petroleum
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
to have a 40% share; Royal Dutch/Shell
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
to have 14%; and CFP, a French Company, to receive 6%. Iran got now 25% of the profits compared to 20% of the original treaty with the AIOC. Saudi-Arabia and other oil-exploiting countries of the region received up to 50% of the profits in cooperation with American oil companies at the same time.
See also
- International crisisInternational crisisAn international crisis is a crisis between states. There are many definitions of an international crisis. Snyder "...a sequence of interactions between the governments of two or more sovereign states in severe conflict, short of actual war, but involving the perception of a dangerously high...
- National Front of Iran
- Mohammed Mosaddeq
- Abadan Crisis timelineAbadan Crisis timelineThe Abadan Crisis was a major event in Iranian history. It began in 1951 with the nationalization of the Anglo-Iranian Oil Company by the government of Iran, and the shutting down by the British of the Anglo-Iranian Oil Company's huge oil refinery in Abadan...
- House Resolution 362House Resolution 362House Concurrent Resolution 362 is a bill and non-binding resolution in the United States House of Representatives that was introduced on May 22, 2008 by Gary Ackerman [D-NY] . It currently has 280 cosponsors as of April 24, 2009...