Showing posts with label Petroleum. Show all posts
Showing posts with label Petroleum. Show all posts

Saturday, May 5, 2018

JCPOA's Uncertainty Exacerbates Iran's Worsening Economic Problems

The Joint Comprehensive Plan of Action (JCPOA) agreement between Iran and the P5+1 was, at the time, widely believed to be a turning point for the Iranian economy, but this has not borne out. Even though it is just one piece of a complex iranian economic situation, the JCPOA is so significant that uncertainty over the fate of the deal has curtailed potential progress. With the shale oil boom keeping the price of petroleum significantly below previous highs, and even minimum budgetary breakeven expectations, Iran’s leading industry is on unsteady ground. The French oil company Total signed a significant oil deal with Iran, but many other firms in the oil industry, and in other sectors, remain hesitant. Boeing and Airbus have committed to major deals, but despite this, Iran’s economic outlook has not improved as expected. Much was made of the stream of foreign trade delegations in Iran following the implementation of the JCPOA, but there has not been a rush to invest in Iran. Substantial geopolitical risks, in addition to pre-existing issues, remain unaddressed, in large part due to uncertainty over the fate of the JCPOA, which faces a considerable test next month.

In May, President Trump will decide whether he wishes to certify Iran’s compliance with the JCPOA under the Iran Nuclear Agreement Review Act, or to refuse to certify, and to withdraw the United States from the accord. He has attempted to be the “anti-Obama” whenever possible - at least rhetorically - but is often hamstrung by either a failure to act decisively, or by the various distractions and domestic and foreign political dilemmas. With pressure on Trump building as the Mueller investigation continues, he will feel increasingly cornered and is likely to lash out in some manner. This is just as likely to be in the form of an angry Twitter rant as in anything substantive, but leaving the Iran Deal remains a realistic possibility. Trump has demonstrated a stubborn persistence on several issues, and the relative ease of an executive decision means there are fewer barriers between him and nullifying the United States’ involvement in the JCPOA, as much for domestic appeasement as over legitimate grievances with the deal.

The Iranian economy has faced a series of hardships in recent years; many self-made. Iran’s ongoing economic mismanagement has led to significant protests - most recently this past winter when nationwide demonstrations rocked the country - but so far such events have lacked any momentum and do not present a serious threat to the government. On April 9th, the Iranian government took a bold - and perhaps desperate - step to halt the slide of the Iranian rial by setting a new “official” exchange rate with the American dollar. At the same time, the government also outlawed the use of any other (black market) rate. Following the 35% drop in value in a week, any further instability would be dangerous for a regime facing an already restive populace.

While alluring as a potentially large and lucrative market, Iran remains as risky, if not more so, than other developing countries. Much of this is due to the uncertainty as to what President Trump may do in May, but other domestic and regional issues, including the IRGC’s influence in important commercial sectors, and the ongoing conflict in Syria, are also important. For firms wishing to invest in Iran’s potentially lucrative modernization, the decision over the JCPOA’s fate will signal either a cautious yellow light, if the deal is upheld, or a steadier red light, if President Trump yet again refuses to certify the accord. Refusal to certify the deal for a third time makes not only American firms, but also European and Asian ones, much more wary of doing business in a country that exposes them to American censure. Congress would be likely to further sanction Iran, increasing barriers to trade and business. Further prolonged uncertainty over the fate of the deal and the implications for the Iranian economy and populace puts additional pressure on an already strained Iranian financial system.

Wednesday, February 8, 2017

Iran and Trump

Iran is one of the most interesting geopolitical threats facing President Trump. The new president has expressed strong distaste for Iran, mostly relating to the nuclear deal reached between the P5+1 and Iran during President Obama’s term. At the same time, Trump has expressed a strong preference for Russia and its president, Vladimir Putin. Russia and Iran have complementary interests in the Middle East, especially regarding Syria, while Russia has habitually nominally supported Iran in an effort to undermine the United States’ hegemony. 

Trump appears to believe that a better deal can be reached with Iran, one abrogating the previous one. For this to be possible, the United States would need to reach a superior bargaining position. Whether the current position is weak or strong, at least one party (Iran) does not wish to give up more. Therefore they would need to be convinced that they are worse off than they believe, or to change the situation to the advantage of the United States. 

Iran, as always, has its own domestic concerns, mostly relating to keeping the population docile, and solidifying regime control over the economy and political system. At the same time, they are active in Syria, Yemen, and the Gulf. Their goal is to establish regional clout, and like Russia, to undermine the United States.

Iran has been making deals with European, and Asian countries since the nuclear accord was finalized. Countries like Greece and Italy, who already have massive financial troubles, benefit from Iranian crude. China always demands more, and other major purchasers like South Korea and India are also interested. 

Trump is faced with a situation where everyone except the United States (and Israel) is happy with the deal, or doesn’t care enough to make a fuss. The United States has virtually no leverage. The only path forward would be to enact coercive measures, forcibly preventing other countries from doing business with Iran. It would the United States versus the world. 

Iran knows this, and they have made a point of pushing in various ways. They ramped up their antagonist actions, especially in the Gulf after the nuclear deal was signed, and continue to act out. General Michael Flynn (Ret.), put Iran “on notice” recently after they test fired a ballistic missile. While not technically a violation of UNSC Resolution 2231 (the text is very poorly worded and unspecific), this test certainly “violated the spirit” of the nuclear agreement and the resolution. 

Today Iran fired another (short range air-defense missile) from the same location. This clearly is not a violation, as it is not ballistic, but it is provocative. While this is much less antagonizing than the previous launch, it is still a clear message to the Trump administration. Iran knows that the United States does not have the same global coalition Obama managed to wrangle, and they are betting that Trump, despite his erratic behavior, won’t be able to do anything to substantive. 

I expect limited provocations to continue, namely in the Gulf as I mentioned a week ago (https://twitter.com/MorganCarlston/status/827160413414506496), but is possible they try to find another dual-citizen hostage, or harass US navy vessels or commercial shipping. They realize how bad Trump looks globally with his inability to control his emotions, and how hypocritical some of his policies are. They are betting that he will be hamstrung by his inability to create a coalition, and to conduct effective diplomacy, while bogged down with domestic concerns.

Monday, December 29, 2014

Iran and Petroleum Prices

One of the overlooked stories of 2014 was the causes of and the geopolitical implications from the dropping oil prices. Numerous articles were written covering aspects of it, yet so few actually tried to look at the situation from the most broad of perspectives.

As everyone knows, the price of oil per barrel and at the pump has dropped over the last few months, mostly as a result of the relationship between demand and supply changing. Supply has been ramped up, especially by US producers. The United States now produces the most oil it has since 1985, and more than all of the OPEC countries including Saudi ArabiaAt the same time, OPEC is also producing record amounts.

Many of the countries in OPEC have oil-dependent economies, and fluctuations in the price of oil affect the way their government operates. The budgets are set to expect a certain price of oil, and if the price drops below this, they will have budgetary problems. Iran in particular is facing difficulties, as the sanctions implemented against the Islamic Republic, combined with a lower price of their most important export has greatly reduced potential revenues.

Even though many of the OPEC countries are now facing possible budget deficits, the cartel agreed to not withhold supply and drive up the price of oil. It appears as though the Saudis and the Gulf Nations are willing to withstand lower prices in the short term, because it damages their bitter rival the Iranians, and OPEC's diminished global influence due to US shale oil producers.

Some have framed this as a purely anti-Iran move, but it is a bit more complex than this. If the OPEC members reduce supply, they are not only working with US oil companies, they are acting in a manner that is only beneficial in the short-term. By working together to keep oil prices low, they will soon drive many of the US shale oil companies out of business.

Fracking (shale oil extraction method) was adopted by American (and Canadian) companies because oil had previously been significantly more expensive, and the fracking process can require a higher break-even point to be profitable. If these companies are allowed to continue to operate (by keeping oil prices high), the damage to OPEC countries will continue. Conversely, if these companies are driven out of business, OPEC has a good chance to regain it's control over world petroleum markets.

The US has long had a policy of utilizing Middle Eastern oil over North American for geo-strategic reasons (see citation in my previous blog). Oil production's increase in North America is striking. Is this a last ditch effort to obtain as much shale oil as possible before the environmentally-damaging process is banned? Is there another "back-up" supply of extractable petroleum or is this the US's last 'trump card' in the oil market?

In some ways this looks like a plot between the Saudis and Americans to damage Iran, Russia and Venezuela financially, but there are quite a few other angles which complicate the situation greatly. Lastly, the insistence by Iran that OPEC cut production, shows Iran's financial woes are very real, and that economic mismanagement by the previous administration in conjunction with external pressures have seriously damaged the economy.

Friday, August 15, 2014

The Mossadeq Coup: Misconceptions about the Role of the United States and the CIA

The United States government, namely the CIA, is often blamed for the August 1953 coup removing Iranian Prime Minister Mohammad Mossadeq from power, however a careful examination of older studies, in addition to newly accessible information, reveal that common conceptions of the events and chronology are flawed, despite their prevalence. 

One reason why these misconception exist is that many files from US government sources relating to this time period, and in particular to this event, remain classified or are otherwise inaccessible (most CIA documents regarding the events have allegedly been destroyed). Under United States law, special exceptions can be made allowing documents to be classified for 50 or 75 years rather than the normal 25 years. It has now been over 60 years since the events took place. This means that on at least two occasions, the documents have been determined to be too sensitive to release. 

More documents regarding this series of events will be revealed later this year (UPDATE: the release has been delayed due to fears that it could have an effect on ongoing nuclear negotiations), when the State Department’s FRUS (Foreign Relations of the United States) Iran 1952-54 is re-released including newly declassified documents. While imperfect, these documents are the most reliable and most accessible. It is important see these documents (as well as those previously released) in context, and to correct widespread misconceptions about the coup and the parties involved.

These misconceptions are problematic because of how they have engrained themselves into our understanding of the events. The preeminent scholar of Iran, Richard Cottam—who himself lived in Iran for many years and was an employee of the CIA as well as the State Department—wrote in the 1960s edition of ‘Nationalism in Iran” (also included in the 2nd edition published in 1979) that "The distortions of the Mossadeq era, both in the press and in academic studies, border on the grotesque.”

Since this time there have been many new accounts, ranging from Kermit Roosevelt’s fundamentally flawed yet influential memoir ‘Countercoup’, to the scholarly work of Mark Gasiorowski, to Stephen Kinzer’s highly popular “All the Shah’s Men” and the most recent revisionist histories of Dariush Bayandor and Ray Takeyh. Though the academic work is considerably more accurate than that of Roosevelt and Kinzer, there are still significant errors in both traditional and revisionist narratives, which have affected the mainstream understanding of this monumental event.

Misconception #1: The United States wanted Iran’s oil:
The United States had no oil interests in Iran (it was the British that did). The primary goal of the Americans was to prevent the spread of Communism, and to secondary was to resolve the dispute as quickly as possible (see National Security Council document NSC 136/1). This is not to say that the United States did not have a vested interest in Middle Eastern oil (e.g. Saudi Arabia), but rather that from the American side, co-opting Iran’s oil interests was not the motivation for a coup. Since at least 1943, US policy had been to develop Middle Eastern oil because North American and Caribbean oil would be easier to defend in war[i]. If anything, a quick resolution was the most important factor to the American; something clearly reflected in their efforts to reach a negotiated settlement.


Misconception #2: Mohammad Mossadeq was a democratically elected Prime Minister:
While Mossadeq was elected to the Majles (the Iranian Parliament) by democratic means (Iran at the time was not a democracy by any means, though some aspects of it were democratic in nature), the office of Prime Minister was nominated from amongst the Majles deputies by the Shah. In turn, the Majles members either voted for or against the nomination (In his initial appointment Mossadeq was approved by a tally of 79-12)
[ii]. Mossadeq enjoyed massive popularity at different times during his political career, but his position as Prime Minister was never due to a nationwide poll (he was PM on two separate occasions). 

This is not to say Mossadeq’s position was not legitimate. He was chosen by his constituency to be a Majles deputy, this is indisputable. He was not however, chosen by the Iranian people to be Prime Minister. This also does not account for the fact that the Majles was mostly comprised of feudal landowners, intrinsically opposed to Mossadeq and his populism[iii]. Before Mossadeq became Prime Minister, the Iranian public was unhappy with the state of affairs in Iran; Mossadeq with his sincere populism was seen by the Shah as a clever alternative to yet another feudal landowner or military officer[iv]. This is also a key factor in Misconception #6.

Misconception #3: The Eisenhower Administration was determined to remove Mossadeq from power from Day 1:
One of the fundamental misunderstandings concerns the Eisenhower Administration’s decision to remove Mossadeq from power. A cursory reading of the documents supplied in the FRUS volume concerning Iran, reveals that the President was most concerned with the specter of Communism above anything else. Eisenhower even said in a National Security Council meeting that if he had $500,000,000.00 to spare, he would have preferred to give $100,000,000.00 to Iran so that the financial troubles brought on by British sanctions could be alleviated[v]. Eisenhower was likely influenced by the Dulles brothers (Secretary of State and Director of the CIA), but for a considerable period of time the president opposed a coup. He was afraid of destabilizing Iran and the region, which in his estimation, would inevitably lead to a communist takeover.

Misconception #4: The CIA coup was successful:
It is clear from the record that the attempted coup (codenamed TPAJAX) which was undertaken on the night of August 15th, 1953, was a dismal failure. Not only did the Iranian military officers fail in their task to arrest Mossadeq, the CIA did not have a backup plan. Even though Kermit Roosevelt claimed to have magically turned the situation around in only 3 days, the circumstances of what really happened between the failed coup of August 15/16 and the successful one of the 19th is highly contentious. How did the situation turn around so quickly, despite the early setbacks including the arrest of pivotal Iranian conspirators such as Colonel Zand-Karimi, the conduit for communicating with Tehran-based commanders? Roosevelt’s version of events is difficult to accept without reservation, not only because of the style and substance of his writing, but also because of his well-known questionable reliability. 

Misconception #5: CIA documents corroborate each other:
There is an recurrent idea that the CIA is all-powerful, and that classified documents from the CIA are inherently truthful and accurate. Again this ignores the context of the documents. This was the CIA’s first attempted coup, and especially for those involved there was a strong incentive to downplay the failures of the plan and to exaggerate any potential successes. In the various accounts declassified by or leaked from the CIA there are several inconsistencies which calls into question to accuracy of the different accounts. 

Perhaps most striking (though ignored in historiographies) are those found in the most recent CIA history ‘Zendebad Shah’, published internally in 1998 and partially released following FOIA requests from George Washington University’s National Security Archive. In this document, it is written that British Foreign Minister Eden “found the Americans much more receptive to the British viewpoint than they had been under Truman and Acheson. The collapse of the Anglo-Iranian oil negotiations had changed the American’s attitude.” These events however, are taken out of chronological order; the negotiations did not in fact collapse until days after the meeting between Eden and the Americans. On the same page the author also wrote that the US administration ‘abandoned the search for a negotiated end to the crisis.’ Without context, this implies that the US broke off negotiations, while in fact it was Mossadeq that did so.

It is unclear if this is poorly researched document, if the person responsible for it made mistakes in his writing, or if the CIA truly does not have a comprehensive understanding of what happened. Of all the declassified CIA documents on the coup, this one is the most recent (there was another document declassified after this one, but it was written decades prior). Is it unrealistic to expect the newest one to be the most accurate? 

Misconception #6: Westerners and Royalists were the only ones who wished to remove Mossadeq from power:
This is perhaps the biggest misunderstanding of all. While Mossadeq had enjoyed great popularity earlier in his term, his coalition had come under great pressure, and former allies had begun to oppose him. Chief amongst these was Ayatollah Kashani, the speaker of the Majles, and a vital influence for the next generation of politicized clerics, significantly, Ayatollah Ruhollah Khomeini. I personally find it very interesting that the US has not made an effort to publicize these connections. Given the tensions between the governments of Iran and the United States since 1979, one would think that undermining the Iranian clerical leadership through showing the links to the coup would be in the interests of the United States.

During the oil crisis, Mossadeq became very unpopular. Things were so bad that when it was clear that his now fractured party would not gain a majority, he cancelled parliamentary elections. In February 1953 there were mass demonstrations against Mossadeq (possibly arranged for or instigated by foreign agents including the CIA); demonstrations of enough severity for Mossadeq to increase security measures in Iran. 

The tendency is to blame the CIA and Americans because we know from the record that there was an attempt to overthrow Mossadeq, but this does not absolve the other participants. There are instances in both the Wilber Report and FRUS where an Iranian general and the former Prime Minister of Iran (allegedly on behalf of a group of military officers) separately contacted US officials inquiring on their interest in conducting a coup d’etat. 

Other issues:
There are two additional issues which I have not addressed as a ‘misconceptions’, because neither of them are considered a key part of the narrative. The role of Ambassador Loy Henderson, who many believe worked with the CIA beyond the scope of his office, has been generally neglected by scholars and journalists. Henderson when interviewed for the Truman Library in 1973, said things which Roosevelt contradicted 6 years later in Countercoup. During this interview Henderson also said that the record would reflect his version of events, if the telegrams were ever declassified.

The other and perhaps most curious issue is the role of the Dulles brothers. The two of them were partners with the American firm (Sullivan & Cromwell) representing the AIOC interests in the United States before their positions as head of the CIA and State Department. The Dulles brothers’s firm had done work with United Fruit Company, one of the corporations which benefited the most from the CIA’s coup in Guatemala in 1954. Both brothers were also major shareholders in United Fruit. It may be difficult to determine if the Dulles brothers used their position to benefit them and their associates financially, and the lack of a comprehensive record from either the CIA or State Department, not to mention Eisenhower’s obsession with secrecy a difficult matter to ascertain. If this is a coincidence it is a truly remarkable one. 

What this means for the new FRUS release:
While there may be new details revealed with the updated release of the FRUS documents, it is likely that the biggest gaps in the record (determining when and why Eisenhower changed his mind and decided to support a coup, as well as what happened between August 16th and 19th) will remain unfilled. Furthermore, it is important to recognize that the contradictions between different versions still remain, and are likely to be even more convoluted by the pending release.

"The early accounts of various participants differed widely enough to make it impossible to follow the slender thread of truth through the dark night.”
—Donald Wilber in ‘The Wilber Report’

--

Sources:
[i] 1 December 1943, folder: ‘Petroleum Reserves Corporation Activities. 7/3/43-1/1/44’ box 1, Records of the Petroleum Division, RG 59 via Anderson, Irvine H. "The American Oil Industry and the Fifty-Fifty Agreement of 1950." Musaddiq, Iranian Nationalism, and Oil. By James A. Bill and William Roger Louis. 1988. 151


[ii] In the executive system of the time, Prime Minister was elected by the Parliament (Majles). Mossadeq was voted in by a 79-12 margin. See Foran, John. "Democratization, Separatism, Nationalization, Coup." Fragile Resistance: Social Transformation in Iran from 1500 to the Revolution., 1993. 285.


[iii] Cottam, Richard W. Nationalism in Iran. 1964. 49


[iv] Azimi, Fakhreddin. Iran: The Crisis of Democracy. New York: St. Martin's, 1989. 257

[v] Memorandum of discussion at the 135th meeting of the National Security Council, March 4, 1953, FRUS, 1953-1954, Vol. X:Iran, p. 691-701




Additional Resources:


Wilber Report (Mostly unredacted): http://cryptome.org/cia-iran-all.htm


Saturday, September 14, 2013

Mossadeq and the US: an Introduction


The following is the introduction to a paper I wrote on Prime Minister Mohammad Mossadeq and his relations with the US Administrations of Truman and Eisenhower:

The overthrow of the Iranian Prime Minister Mohammad Mossadeq in August 1953 has long been a sore point for Iranians; the inspiration for many conspiracy theories and the source of much ill will directed towards the US government by the average Iranian citizen.[i] The extensive writings on this subject are predictably voluminous. While the perpetrators of the coup included foreign and domestic agents, as well as Iranians from all parts of the political spectrum, the Americans, particularly the CIA, are often singled out as the primary antagonists.
            The reasons for this are many, but important amongst them are the claims made by Kermit Roosevelt Jr. in his book, Countercoup: The Struggle for the Control of Iran. Roosevelt writes about his own role as a CIA agent in fomenting the civil unrest and pressuring the Shah into issuing Firmans removing Mossadeq.[ii] CIA documents corroborate some of his claims, while others contradict them.
            The British, in fact, had a significant role in the coup, but because diplomatic relations between the United Kingdom and Iran were severed prior to the coup, the British Embassy had been closed, and therefore the British had less of a direct role in the actual execution of the events of 16 and 19 August, 1953.[iii] The British foreign intelligence service, the MI6, which had been based out of the embassy, was restricted by the degradation in relations, but still managed to assist the CIA and the locals who acted to overthrow the Iranian government.[iv]
            Reinforcing the beliefs of American involvement were statements by Secretary of State Madeline Albright apologizing for the United States' "significant role" in the 1953 coup[v], and President Barack Obama with a similar apology in 2009.[vi] Despite the claims of responsibility by a variety of different groups, and innumerable theories on the events of August 19th, 1953, what actually happened remains difficult to determine.
            What makes this question all the more interesting is that the United States initially had been very supportive of Prime Minister Mossadeq, but then in 1953 made an attempt to overthrow Mossadeq. What caused this change?
            During and immediately following the Second World War, the foreign policy of the United States underwent significant changes. Up to this time, the state's foreign policy had been primarily isolationist with a few exceptions (Cuba, Philippines etc.), but with the perceived threat of rampant communism, the focus expanded and the state became more predisposed to intervene globally. This change in priorities coincided with a greater demand for natural resources (in particular petroleum) following World War II. In December 1943 a memo from the Petroleum Division stated that the US preferred “Middle Eastern oil to be developed to the maximum” while American and Caribbean oil was conserved because it would be easier to defend in war.[vii]
            Iran became a natural focal point for the building tensions to manifest themselves as it has one of the largest reserves of both natural gas as well as petroleum.[viii] Adding to this, there were tens of thousands of American troops occupying the country to ensure delivery of supplies to the Soviet Union.[ix] Even before the discovery of oil, Iran has long been important geopolitically to Western powers, with innumerable examples from history dating back to pre-Roman times.
            Perhaps the best pre-modern depiction of how the West saw this part of the world is British political geographer Halford Mackinder's 'Heartland Theory'.[x] The 'Heartland Theory' claims that a state that wishes to dominate the world must physically control the Central Asian Plateau, the Caucasus and what is today Russia.[xi] Iran is a part of this central "pivot area" which Mackinder's theory is concerned with. With the Russian Empire and then the USSR controlling the majority of the "Heartland", fears that Iran, one of the few places of the "Heartland" not under Russian/Soviet control, could fall, led to a British interest in maintaining a footprint in the region. The Great Game between Russia and Britain, where they competed over Central Asia and Iran, is an example of the struggles between global powers over this part of the world and provides the background for American political sentiments towards Iran. Though Mackinder was an academic, during the Bolshevik Revolution in Russia he was appointed "British High Commissioner in Southern Russia".[xii] Even if his theory was not wholeheartedly embraced by the British government, his presence in this part of the world as a representative of the British implies that Mackinder held some measure of influence in the British government. While Mackinder's theory was not published until 1904, the British had long seen this part of the world as essential to their geopolitical aspirations.
            The election of Republican Dwight Eisenhower as the President of the United States in 1952 changed American policy towards Iran. Eisenhower's beliefs were more in line with the British who (whether they believed it themselves or not), argued vociferously that the threat of communism was increasingly dangerous in Iran.[xiii] Initially Eisenhower's administration attempted to keep Mossadeq in power as they believed that the alternatives to him would lead to Soviet control of Iran and subsequently the rest of the Middle East. As late as March 1953, Eisenhower is on record stating that he wished for Mohammad Mossadeq to continue be the Prime Minister of Iran for he was seen as a moderating voice between the right-wing military, royalist and religious parties, and the left-wing Communist Tudeh party.
            It was the beginning of the Cold War, and the Republican President Eisenhower was fearful of the possibility that the Communists might take over the Middle East. Mossadeq was not necessarily friendly towards the Tudeh Party, but he also did not suppress them as forcefully as the Americans would have preferred. He even allowed front organizations and publishing houses of political opponents to operate.[xiv] In the dichotic view of the Western powers, the lack of a consistent, strict crackdown on Communist sympathizers by Mossadeq's government was seen as evidence of an anti-Western bias.
            The CIA’s internal history written in 1998, claims that “Even the most bitter anti-Mossadeq partisans did not claim the Iranian Prime Minister was a Communist or sympathizer”.[xv] The evidence suggests that this however, is not the case. A French newspaper said the following about Mossadeq: “The opposition called him an Anglophile, The Russians entitled him the servant of American imperialism. The British labeled him a Communist”.[xvi] Mossadeq, (apparently in a bid to gain Western sympathies) overemphasized the power of the Tudeh to the West.[xvii] Despite the fact that the Tudeh (Communist) party of Iran was officially outlawed, many in the American government and some in the CIA were fearful that Prime Minister Mossadeq was sympathetic towards communism. Mossadeq’s attempt to play the sides against each other by the concept of “negative equilibrium” evidently backfired, as the Americans then saw him as weak and replaceable, rather than weak, but still worthy of support.
            The United States was stuck in a position where they had already committed resources to the Iranian government (before and during Mossadeq's tenure), and wished to resolve the oil dispute as soon as possible to reduce tensions in the unstable Middle East. At the same time the risks of harming American business interests and potentially also long-term geopolitical interests were ever-present in the minds of the Eisenhower Administration.
            The Truman administration had spent millions of dollars trying to support the Iranian economy through loans and grants.[xviii] This was intended to keep the Iranian government as stable as possible and prevent a Communist takeover. There were also American officials who were sympathetic to Iran's Mossadeq-inspired drive for oil nationalization which complicated the US-Iran relationship even further.[xix] Other Americans were worried for the potential of nationalization happening in American areas of influence and oil production such as Saudi Arabia.[xx] That the oil agreement with Saudi Arabia had recently been renegotiated to a still profitable 50/50 split may have alleviated some of these fears. However, the Anglo Iranian Oil Company’s (AIOC) 'concessionary' deal with Iran was far more exploitative (to the benefit of the British) than the Saudi Aramco agreement and the Iranians were well-aware of this fact.[xxi]
            Mossadeq, in his idealism, believed that the United States with its principles of democracy and justice, was likely to side with him in his struggles against the British. Iran and the US had been enjoying closer relations at the expense of Britain and the Soviet Union during and after the Second World War, which reinforced Mossadeq’s beliefs.[xxii] He evidently did not anticipate that political expediencies and historical alliances would play such strong roles in the American decision making process. The good relations which Mossadeq had with several key American officials and negotiators, likely have convinced him that the rest of the government was also sympathetic to his situation. As time passed and an agreement was not reached, Mossadeq's relations with the Americans soured. One reason for this was apparently the perceived mutability of Mossadeq in his oil negotiations. The United States while relatively neutral in the process, wanted the matter settled, as the dispute was a destabilizing factor in an unstable, potentially volatile, geopolitically important region.
            Mossadeq was named Time Magazine's Man of the Year for 1951 for his work in nationalizing Iran's oil and other achievements.[xxiii] Despite this honor, the description of his physical and personal characteristics was overwhelmingly negative and used marginally racist words.[xxiv] These sentiments can be described as representative of American public perception, and if not, that fact that these words came from a leading national magazine publication, understandably had a significant influence on people. The New York Times often described Mossadeq as a ‘dictator’, although the paper never bestowed this disparaging title upon the Shah who ruled for 25 years after Mossadeq fell from power.[xxv] Iran was not a wealthy country, and was seen as backwards by many in the West. Disparaging or patronizing attitudes from the West towards the developing countries and their people was commonplace and impacted interactions between the states and individuals, certainly including those between Mossadeq and the West.




[i] In the executive system of the time Iran, Prime Minister was elected by the Parliament (Majles). Mossadeq was voted in by a 79-12 margin. See Foran, John. "Democratization, Separatism, Nationalization, Coup." Fragile Resistance: Social Transformation in Iran from 1500 to the Revolution., 1993. 285.
[ii] Bayandor claims that the removal process is technically legal, but because of the duress it was an illegal act. Bayandor, Darioush. Iran and the CIA: The Fall of Mosaddeq Revisited. 2010..
[iii] Keddie, Nikki R., Yann Richard, and Nikki R. Keddie. Modern Iran: Roots and Results of Revolution., 2003. 129
[iv] Katouzian, Homa. "Democratization, Separatism, Nationalization, Coup." Musaddiq's Memoirs. By Mohammad Mosaddeq. Trans. Homa Katouzian. London: 1988. 55
[v] Albright, M. (2000, March 17). American-Iranian Relations. Remarks before the American-Iranian Council, Washington, D.C.
[vi] "Obama Admits US Involvement in 1953 Iran Coup." AFP. Google, 04 June 2009. Web. 10 Mar. 2013.
[vii] 1 December 1943, folder: ‘Petroleum Reserves Corporation Activities. 7/3/43-1/1/44’ box 1, Records of the Petroleum Division, RG 59 via Anderson, Irvine H. "The American Oil Industry and the Fifty-Fifty Agreement of 1950." Musaddiq, Iranian Nationalism, and Oil. By James A. Bill and William Roger Louis. 1988. 151
[viii] It was known that Iran possessed vast reserves of oil-based fuels, and the discovery and understanding of how much Iran has is not a recent development.
[ix] Foran 271
[x] O'Hara, Sarah, and Michael Heffernan. "From Geo-Strategy to Geo-Economics: The ‘Heartland’ and British Imperialism Before and After MacKinder." (2006): 54
[xi] O’Hara and Heffernan 67
[xii] O’Hara and Heffernan 66
[xiii] Ansari, Ali M. Modern Iran since 1921: The Pahlavis and after. 2003. 121; Azimi, Fakhreddin. Iran: The Crisis of Democracy. 1989. 295; Ferrier, Ronald W. "The Anglo-Iranian Oil Dispute." Musaddiq, Iranian Nationalism, and Oil. By James A. Bill and William Roger Louis. 1988. 186; Louis, Wm. Roger. "Musaddiq and the Dilemmas of British Imperialism." Musaddiq, Iranian Nationalism, and Oil. By James A. Bill and William Roger Louis. 1988. 242
[xiv] Foran 290; Cottam, Richard W. Nationalism in Iran. 1964. 215
[xv] Koch, Scott A., "Zendebad, Shah!": The Central Intelligence Agency and the Fall of Iranian Prime Minister Mohammed Mossadeq, August 1953," Top Secret Draft History, History Staff, Central Intelligence Agency, June 1998., 79
[xvi] Bill, James A. Musaddiq, Iranian Nationalism, and Oil. By James A. Bill and William Roger Louis. 1988. 265
[xvii] Bill 277
[xviii] Truman’s Point Four program was intended to help develop Iran, and was responsible for investing tens of millions of US dollars in Iran.
[xix] In particular George McGhee, and Dr. Henry F. Grady, US Ambassador to Iran from 1950-1951
[xx] Bill 273; Siavoshi, Sussan. "The Oil Nationalization Movement, 1949-1953." A Century of Revolution: Social Movements in Iran. By John Foran. 1994. 128
[xxi] Bill 273
[xxii] Foran 271
[xxiii] "Man of the Year: Challenge of the East." Time 7 Jan. 1952: n. pag. Time Magazine. Web.
[xxiv] Bill 265; "Man of the Year: Challenge of the East." Time 7 Jan. 1952: n. pag. Time Magazine. Web.
[xxv] Bill 265