Iran: An 'Oil' Painting

The Muslim Arab armies who invaded Iran in the 7th century referred to the Zoroastrian Persians as “fire worshippers.” The derogatory term came from the Zoroastrian practice of worship in fire temples. A central feature of the fire temple is its “eternal flame.” In many cases, this was just a fancy natural gas flare.

By choice or by force, most of Iran’s Zoroastrians converted to Islam. But many there have continued to practice their ancient faith and maintain their temples to this day. 

Seeing those naturally-fueled fire temples, a late 19th century traveler having some familiarity with that period’s oil production in the US and Russia would have appreciated Iran’s great hydrocarbon resource potential. One such traveler was an Englishman named William D’Arcy. As a young man, D’Arcy had made a fortune mining gold in Australia and was ready for his next big adventure.

Nineteenth century Iran was an independent country surrounded by expansionist empires and colonial powers. The Ottoman Empire controlled the lands west of the Tigris. The northern territories (from Turkistan to the Caucasus) across the Caspian Sea were part of the Russian Empire.  And the British ran India to the east.

D’Arcy arranged a meeting with the king of Iran (or the “Shah of Persia” as he was known in the English-speaking world at the time). He negotiated a contract that gave the Englishman a license to explore for oil, and once a producing field was found, create an oil company.  The Shah of Persia would receive shares in the company and 16% of its oil revenue.

Thanks to D’Arcy’s initiative and the drilling expertise of his contractor George Reynolds, Iran became the first oil producer and exporter in the Middle East. D’Arcy named his company Anglo-Persian and the British government became its major shareholder. The company later changed its name to Anglo Iranian Oil Company (AIOC), and later still, to British Petroleum (BP). 

By the time oil started flowing from the super giant Masjid-e-Soleiman (Solomon's Temple) oil field in 1908, Iran was in the middle of its transformative constitutional revolution (1905-1911). A broad segment of the Iranian population, from peasants and clerics to merchants and intellectuals, had risen up against the country’s monarchy. Iran's system of absolute monarchy had allowed kings to make decisions for the country—such as signing away mineral rights as “concessions”—without input from its citizens. Finally in 1911, after a bloody struggle that saw the newly built parliament building bombed by cannon fire, democracy was on hand. A constitution (modeled after that of Belgium) was approved that transferred much of the power from the king to the people’s elected representatives in the Majlis (parliament).

During the world wars, it became clear to Britain that Iran’s oil was of strategic importance to the empire. (When Lord Courzon famously said after WWI that “Britain sailed to victory on a sea of oil,” he was mainly referring to petroleum from Iran.) Perhaps as a result, AIOC’s British management became increasingly secretive and their accounting practices grew more opaque to Iranian auditors. This was particularly frustrating to Iran who saw the newly formed US oil company Aramco operating in a more transparent fashion and sharing a greater percentage of its earnings with the producing country.

The post-WWII period was a particularly exciting time for democratic politics in Iran. Some of the best political writing in modern Persian history come from books, newspaper editorials, and op-eds published in that era. Multiple parties were competing for seats in the Majlis as the young Shah Mohammad Reza Pahlavi (in his early 20’s) held ceremonial power. With that as backdrop, a seasoned lawyer named Mohammed Mossadeq campaigned on an oil nationalization platform to become Prime Minister. Mossadeq represented the National Front, a liberal party committed to constitutional monarchy. A few months after Mossadeq’s election, the parliament voted to nationalize the country’s oil. (See illustration).

Caption for the illustration: It was a beautiful spring day in 1951 and people gathered in front of the parliament for the historic occasion. They celebrated the prospect of a more prosperous future. They cheered the proposition that the oil in the land, like its water, its mountains, and its air belong to all its people. They honored their Prime Minister who dared to make it happen. But most importantly, they celebrated the democratic process afforded by the constitution that their parents and grandparents fought and died for some 40 years earlier. 

The British government started legal action against Iran for oil nationalization; but the international court decided in Iran’s favor. The next step was economic sanctions that effectively prevented Iran from exporting any of its crude oil or refined products. My father would at times talk of living under these economic sanctions as a teenager, remembering how bakers would run out of wheat as people were lined up to buy their daily bread. However, as my dad would also recall, Mossadeq never lost his popularity.

Perhaps concerned about the increasing appeal of the opposition Tudeh Party (the Iranian communist party) during this period of economic hardship, the US took the lead in organizing regime change. Eisenhower was the new president and the Dulles brothers were heading the State Department and the CIA. The clandestine “Operation Ajax” entered the planning phase early in 1953. And in August 19, 1953, the CIA operation succeeded in removing Mossadeq from power in a military coup. 

The democratically elected prime minister had the police on his side. So the Iranian army had to be convinced to step in and arrest their prime minister to save the monarchy from economic collapse. Mossadeq was handcuffed as tanks rolled through the streets and hundreds of his supporters were shot dead. The constitution was suspended and the young Shah was given absolute power by the coup organizers. All political parties supporting nationalization were outlawed and their members purged from the military.

Having organized and executed the successful regime change, the US was now calling the shots in Iran. What used to be the AIOC operations there would now be run by a newly formed Iran Production Consortium consisting of Exxon, Mobil, Chevron, Texaco, Gulf, Shell, and BP-- informally known as the Seven Sisters. US established military bases in Iran and the two countries remained close allies during much of the Cold War. Oil money started to flow in, the economy expanded, and Iran’s middle class grew larger. The country became prosperous; but was a police-state nonetheless. A college student found reading a banned book, say Karl Marx’s Das Kapital, could easily be picked up by the secret police and tortured to reveal his or her “contacts” within the underground opposition.

And the prosperity brought on by the booming western-oriented economy was not shared by all. The religious poor felt particularly marginalized. It was very difficult for a woman with a Muslim head scarf or a man who wanted to observe the noon prayers to get an office job. Although I was just a kid living in a middle-class Tehran neighborhood during the '70's, I could sense these inequities.

With the Liberal/Left opposition parties outlawed, the church emerged as the voice of protest. When people of different political stripes rose up in 1978-79 to reclaim the democracy that was stolen from them in 1953, it was the religious opposition that proved to be the best organized and best prepared to seize power. During January and February of ‘79, the Shah left for exile, the army declared its neutrality, and a revolutionary government filled the void. Instead of reinstituting the 1906 constitution, a new one was established for a republican form of government. 

The 2500-year-old Persian monarchy that had survived the Arab invasion of the 7th century (not to mention the much more brutal Mongol invasions of the 13th century) was no more.

Essay and illustration by Ramin Abhari