Nationalization of the Iranian oil industry

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NIOC directorate enters the AIOC building in Abadan, June 20, 1951. AIOC741330.jpg
NIOC directorate enters the AIOC building in Abadan, June 20, 1951.

The nationalization of the Iranian oil industry (Persian : ملی شدن صنعت نفت) resulted from a movement in the Iranian parliament (Majlis) to seize control of Iran's oil industry, which had been run by private companies, largely controlled by foreign interests. The legislation was passed on March 15, 1951, and was verified by the Majlis on March 17, 1951. The legislation led to the nationalization of the Anglo-Persian Oil Company (AIOC). The movement was led by Mohammad Mosaddegh, a member of the Majlis for the National Front and future prime minister of Iran. The movement to nationalize the oil industry was the reaction to the following concessions made by Iran to foreign powers: the Reuter concession of 1872, proceeding letter, D'Arcy Concession?] the 1933 agreement between the Iranian government and AIOC, and the Gas-golshaian[?] contract. According to the political scientist Mark J. Gasiorowski, the oil nationalization movement had two major consequences: the establishment of a democratic government and the pursuit of Iranian national sovereignty. [1]

Persian language Western Iranian language

Persian, also known by its endonym Farsi, is one of the Western Iranian languages within the Indo-Iranian branch of the Indo-European language family. It is a pluricentric language primarily spoken in Iran, Afghanistan and Tajikistan, Uzbekistan and some other regions which historically were Persianate societies and considered part of Greater Iran. It is written right to left in the Persian alphabet, a modified variant of the Arabic script.

Iran Country in Western Asia

Iran, also called Persia, and officially the Islamic Republic of Iran, is a country in Western Asia. With over 81 million inhabitants, Iran is the world's 18th most populous country. Comprising a land area of 1,648,195 km2 (636,372 sq mi), it is the second largest country in the Middle East and the 17th largest in the world. Iran is bordered to the northwest by Armenia and the Republic of Azerbaijan, to the north by the Caspian Sea, to the northeast by Turkmenistan, to the east by Afghanistan and Pakistan, to the south by the Persian Gulf and the Gulf of Oman, and to the west by Turkey and Iraq. The country's central location in Eurasia and Western Asia, and its proximity to the Strait of Hormuz, give it geostrategic importance. Tehran is the country's capital and largest city, as well as its leading economic and cultural center.

The Anglo-Persian Oil Company (APOC) was a British company founded in 1908 following the discovery of a large oil field in Masjed Soleiman, Iran. It was the first company to extract petroleum from Iran. In 1935 APOC was renamed the Anglo-Iranian Oil Company (AIOC) when Reza Shah Pahlavi formally asked foreign countries to refer to Persia by its endonym Iran. and in 1954 it was renamed again to the British Petroleum Company (BP), one of the antecedents of the modern BP public limited company, while its assets in Iran were nationalised and taken over by the National Iranian Oil Company. Britain's treasury purchased 51% of the company in 1914.



From the time of the discovery of oil in Iran, foreign powers used force and exploited the weakness of the Iranian state to coerce it into concessions which allowed foreign companies to control oil extraction. The nationalization of the oil industry was the response to these foreign interventions. Particularly the following concessions:

  1. Reuter concession
  2. Proceeding letter[ D'Arcy Concession?]
  3. 1933 Agreement
  4. Gas-golshaian[?] contact

The competition to gain more control of the Iranian oil industry increased during World War II when the United Kingdom, the Soviet Union and the United States all became involved in Iranian affairs. When faced with demands from the oil companies of these three countries, the Iranian government announced that the issue would be decided after the war as the economic conditions of the countries were not clear. The government refused all these demands after the war ended. [2]

World War II 1939–1945 global war

World War II, also known as the Second World War, was a global war that lasted from 1939 to 1945. The vast majority of the world's countries—including all the great powers—eventually formed two opposing military alliances: the Allies and the Axis. A state of total war emerged, directly involving more than 100 million people from over 30 countries. The major participants threw their entire economic, industrial, and scientific capabilities behind the war effort, blurring the distinction between civilian and military resources. World War II was the deadliest conflict in human history, marked by 50 to 85 million fatalities, most of whom were civilians in the Soviet Union and China. It included massacres, the genocide of the Holocaust, strategic bombing, premeditated death from starvation and disease, and the only use of nuclear weapons in war.

United Kingdom Country in Europe

The United Kingdom (UK), officially the United Kingdom of Great Britain and Northern Ireland, is a sovereign country located off the north-western coast of the European mainland. The United Kingdom includes the island of Great Britain, the north-eastern part of the island of Ireland, and many smaller islands. Northern Ireland is the only part of the United Kingdom that shares a land border with another sovereign state, the Republic of Ireland. Apart from this land border, the United Kingdom is surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the south and the Celtic Sea to the south-west, giving it the 12th-longest coastline in the world. The Irish Sea lies between Great Britain and Ireland. With an area of 242,500 square kilometres (93,600 sq mi), the United Kingdom is the 78th-largest sovereign state in the world. It is also the 22nd-most populous country, with an estimated 66.0 million inhabitants in 2017.

Soviet Union 1922–1991 country in Europe and Asia

The Soviet Union, officially the Union of Soviet Socialist Republics (USSR), was a socialist state in Eurasia that existed from 1922 to 1991. Nominally a union of multiple national Soviet republics, its government and economy were highly centralized. The country was a one-party state, governed by the Communist Party with Moscow as its capital in its largest republic, the Russian Soviet Federative Socialist Republic. Other major urban centres were Leningrad, Kiev, Minsk, Alma-Ata, and Novosibirsk. It spanned over 10,000 kilometres east to west across 11 time zones, and over 7,200 kilometres north to south. It had five climate zones: tundra, taiga, steppes, desert and mountains.

Rahimiyan[Full Name?], the member from Quchan in the 14th Majlis was the first who introduced a plan to nationalize the oil industry. However, this plan was never discussed. [2] On October 23, 1949, at home of Mohammad Mosaddegh and in the presence of twelve experts[who?] the National Front (political party) was established. It consisted of various political efforts whose joint objective was the protection of the rights of Iranian oil industry. [2]

Quchan County County in Razavi Khorasan Province, Iran

Quchan County is a county in Razavi Khorasan Province in Iran. The capital of the county is Quchan. At the 2006 census, the county's population was 179,613, in 45,502 families. The county has two districts: Central District and Bajgiran District. The District has two cities: Quchan and Bajgiran.

Mohammad Mosaddegh Prime Minister of Iran in the 1950s

Mohammad Mosaddegh was the 35th prime minister of Iran, holding office from 1951 until 1953, when his government was overthrown in a coup d'état orchestrated by the United States' Central Intelligence Agency and the United Kingdom's MI6.

National Front (Iran) political opposition party in Iran

The National Front of Iran is an opposition political organization in Iran, founded by Mohammad Mosaddegh in 1949. It is the oldest and arguably the largest pro-democracy group operating inside Iran despite having never been able to recover the prominence it had in the early 1950s.


People rallies in support of nationalization Iranian Oil Nationalization Rally.jpg
People rallies in support of nationalization

Mosaddegh (June 16, 1882 – March 5, 1967) was an Iranian politician and the leader of the movement to nationalize Iran's oil industry. [3] He was educated in Europe, and joined politics after the Iranian Constitutional Revolution of 1905–1907. He held multiple posts such as member of parliament, governor of the Fars Province, finance minister, foreign minister, and prime minister. [4] In the election of the 14th Majlis in 1943, he was elected member for Tehran. Before gaining recognition as the leader of the national oil movement, he played a large role in the trans-Iranian railway project and the re-organization of the courts and the Justice Department. [1]

Persian Constitutional Revolution

The Persian Constitutional Revolution, also known as the Constitutional Revolution of Iran, took place between 1905 and 1911. The revolution led to the establishment of a parliament in Persia (Iran) during the Qajar dynasty.

Fars Province Province in Region 2, Iran

Fars Province also known as Pars or Persia in the Greek sources in historical context, is one of the thirty-one provinces of Iran and known as the cultural capital of the country. It is in the south of the country, in Iran's Region 2, and its administrative center is Shiraz. It has an area of 122,400 km². In 2011, this province had a population of 4.6 million people, of which 67.6% were registered as urban dwellers (urban/suburbs), 32.1% villagers, and 0.3% nomad tribes. The etymology of the word Persian, found in many ancient names associated with Iran, is derived from the historical importance of this region. Fars Province is the original homeland of the Persian people.

Tehran City in Iran

Tehran is the capital of Iran and Tehran Province. With a population of around 8.7 million in the city and 15 million in the larger metropolitan area of Greater Tehran, Tehran is the most populous city in Iran and Western Asia, and has the second-largest metropolitan area in the Middle East. It is ranked 24th in the world by the population of its metropolitan area.


The 16th Majlis consisted of some members from National Front such as Mosaddegh. In November 1950, the rejection of the oil supplemental agreement was offered from oil committee of Majlis which was chaired by Mosaddegh. The prime minister at the time, Haj Ali Razmara, opposed the measure. On March 7, 1951, Razmara was murdered by Khalil Tahmasebi, a member of Fada'iyan-e Islam. [5] After the death of Razmara, the Majlis began the process of nationalizing the Iranian oil industry. [1] [6]

Haj Ali Razmara Iranian politician

Haj Ali Razmara was a military leader and prime minister of Iran.

Khalil Tahmasebi was a carpenter and member of the Iranian fundamentalist group Fadayan-e Islam, which has been described as "the first Shiite Islamist organization to employ terrorism as a primary method of political activism." On behalf of this group, Tahmasebi assassinated the Iranian Prime Minister, Ali Razmara, on 7 March 1951. and was described as a "religious fanatic" by The New York Times. In 1952, he was freed by the Iranian Parliament during the premiership of Mosaddegh, his pending death sentence was quashed, and he was declared a "Soldier of Islam." According to Time, Tahmasebi "promptly rushed to the Hazrat Abdolazim shrine, wept joyously and said: 'When I killed Razmara, I was sure that his people would kill me.'" Following the 1953 Iranian coup d'état, Tahmasebi was re-arrested and tried for the assassination of Razmara; he was executed in 1955.

Fadaiyan-e Islam

Fadā'iyān-e Islam is a Shiʿite fundamentalist group in Iran with a strong activist political orientation. The group was founded in 1946, and registered as a political party in 1989.

On March 15, 1951, legislation to nationalize the oil industry was passed by the Majlis with a majority of votes. On March 17 the Majlis verified the nationalization of Iran oil industry and the AIOC was nationalized. [1] [2]


In April, Mosaddegh was selected as prime minister by Shah Mohammad Reza Pahlavi under immense pressure from the Majlis. [5]

In the aftermath of March 1951, the economic crisis worsened and Iranian oil was not bought by other countries. The Abadan Refinery, at the time one of the largest oil refineries in the world, was closed. The nationalization of the Iranian oil industry continued even through strong opposition from the United States and the United Kingdom.

In the first year of the nationalization, the only foreign sale of Iranian Oil were 300 barrels to an Italian merchant ship. Foreign oil companies prevented any impacts of the Iranian withdrawal from being felt by consumer countries by increasing output elsewhere. Oil production was expanded by BP and ARAMCO in Saudi Arabia, Kuwait and Iraq. Oil production in the Middle East increased by around 10% annually in 1951, 1952 and 1953. The loss of oil exports severely impacted the Iranian economy. With oil production decreasing from 242 million barrels in 1950 to 10.6 million barrels in 1952. [7]

In August 1953, the government of Mosaddegh was overthrown by a military coup detat orchestrated by the United States Central Intelligence Agency and the British Secret Intelligence Service. Mosaddegh was sentenced to three years in prison and then kept under house arrest until his death in 1967. [8] [9]

After the coup the Iranian oil crisis ended and the AIOC did not succeed to stop production. The National Iranian oil company as an international consortium was founded and the AIOC was made a member. With the nationalization of the oil industry, British and American political influence continued for years after coup. [1]

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