In 1953, the Central Intelligence Agency of the United States helped to coordinate the coup d’état of Iranian Prime Minister Dr. Mohammad Mosaddeq, a democratically elected official. This overthrow of an elected official not only seriously undermined the idea of America as a beacon of freedom, but it also showed the reach of the United States into the Middle East and even into individual governments, whether the intentions and results were malicious or otherwise. Though clearly a tumultuous situation, nearly the entirety of the diplomatic relations between the United States and modern Iran have been shaped by a number of things, often for worse. The subject of oil in addition to a complicated relationship with the Shah have often doomed relations between two countries that, in passing, seem to have been destined to be allies.
Though it was hardly a misunderstanding when the facts are viewed, the coup d’état of Mosaddeq created a critical viewpoint of the United States government for the Iranians, who felt they were betrayed. Because of the perceived betrayal, the actions of the United States government were now under the magnifying glass to Iranian citizens as well as other people in the Middle East. After the future Iranian Revolution, generations of Iranians would continue, to the present day, to mistrust the United States, and those in power after the Iranian Revolution would continue to demand the United States apologize for its actions, continuing to do so under strained relations with the United States until President Bill Clinton officially apologized in 2000.
Mosaddeq was a popular political figure in Iran, as he was seen as a man who was considered by the British as “the Persian concept of nationalism.” Mosaddeq sought to nationalize Iranian oil, a bill that was ratified in 1951 and threatened British assets in Iran. At the time of the nationalization, the United States did have that much at stake in Iran in terms of direct American interests, but the nationalization of Iranian oil put pressure on the Anglo-Iranian Oil Company, “Britain’s largest overseas asset.”
The Anglo-Iranian Oil Company had the largest oil refinery in Iran and it was the second largest exporter of crude oil in a country that “possesses the second-largest reserves of oil in the world” behind Saudi Arabia. The hit that the world economy would take after Mosaddeq nationalized Iranian oil would especially hurt Great Britain, and though the coup in 1953 is primarily attributed to the United States, it was undertaken by a joint Anglo-American venture aimed to keep that much control out of the hands of the Iranian government. Thus, we have an extremely pivotal point in the relations between the United States and Iran that was shaped and dictated by disputes and actions over oil.
Because of the involvement in the United States in overthrowing a democratically elected official in favor of monarchical autocracy, which the United States hoped would act as a “policeman” in the Middle East, the Iranian people themselves had reservation about the American puppet that was their new government. Trust in the American government continued to be shaky up until the Iranian Revolution, with a U.S. report considering Iran as a “capstone of the buffer zone between the Soviet Union and the oil rich Arabian peninsula,” with the position of “buffer zone” not being an agreeable one by any country, especially an “ally.”
Oil is an important aspect in the Middle East as it relates to the rest of the world. It is a precious commodity and helps to drive many economies, but it can also be used as a weapon. An oil boycott came with the Yom Kippur War in 1973 as Arab states sought to “punish the West for its support of Israel,” and this boycott demonstrated a large amount of power in the hands of the countries that produced the oil, such as OPEC and one of its largest producers, Iran, as opposed to the ones consuming it, such as the United States and the West. Between 1968 and 1974, when the oil boycott ended, oil revenues in Iran skyrocketed from $958 million to $5 billion, and by the years 1975-1976 oil revenues in Iran were up to $20 billion, and oil revenues comprised of 72% of foreign exchange receipts in Iran.
Because of this boycott, the issue of oil and its domestic affect on foreign policy in the United States led Iranian-U.S. relations to become more of a domestic issue in U.S. politics. When considering the contemporary U.S.-Iranian problems over Iranian’s nuclear ambitions, it is ironic to consider that the United States was actively involved in selling nuclear technology to the Iranians, a move that would help to diversify the supply of electricity in Iran and free up more oil for sale on the world market. The United States had a ten-year contract to supply enriched uranium to Iran under the Shah, but even the closeness with the Shah did not satisfy American worries of the Shah’s military ambitions.
The Shah of Iran’s military ambitions for his country also doubled as a way to prevent a military coup, granting officers large salaries, comfortable housing, and bonuses. In 1954, the year of the coup that put the Shah in power, military expenditures in Iran were $60 million, compared to 1974, when the United States signed the enriched uranium contract, where military expenditures were $4 billion under the Shah in addition to the arms amounting to $10.4 billion sold to Iran by the United States between 1972 and 1976. As the “Emperor of Oil,” as the Shah was referred to by Time magazine in 1974, was losing power and public opinion faster and faster, the complicated relationship between the Shah and the United States became more complicated, as the United States was advised to “take a more proactive role in advising the Shah because it was clear that he refused to take council from Iranians.”
Through a coup d’état, an oil embargo, nuclear power, and tense diplomatic relations between the United States and its “buffer zone,” the Shah of Iran had one last complication to offer as Iran’s monarchy was being overthrown: the man put into place by the United States was giving way to a revolutionary people who were opposed to and suspicious of America’s involvement in Iranian affairs. The United States placed the Shah into power with the idea that they would be able to control him as a policeman of the Middle East and its oil, and by 1979 Iran was under the control of many of those who sympathized with Mosaddeq, especially his nationalistic views on oil.
Though American and British involvement directly in Iranian affairs was what resulted in the Shah coming to power, by the end of the 1970s the Shah was becoming increasingly wary of Western interference in Iranian domestic politics that he saw as independent, even when that “interference” came only in the form of advice, further demonstrating the complication of U.S.-Shah relations and making it difficult for the United States to get a bead on the Shah and his attitude towards America, especially during the end of his reign.
Misunderstandings and problems out of the immediate control of those in power with the newly founded Islamic Republic of Iran continued through to the present day, beginning with the U.S. embassy being seized by Iranian students in 1979, which future Iranian president Sayyid Mohammad Khatemi said he had regret for. Despite the expression of regret and opposition by Iranian leaders, the embassy hostage crisis muddied the opinions of Iran and Iranians that many American citizens and politicians had as it “became part of the political landscape.”
Both Iran and Iraq depended on oil revenue for their peacetime economies, so oil became that much more important in both Middle Eastern and well as world politics during the Iran-Iraq War. After the sinking of the USS Stark by an Iraqi missile, President Ronald Reagan blamed the deaths of thirty-seven Americans on Iran, further solidifying the “us against them” sentiment of Iranians toward America. Even before the United States invasion of Iraq in 2003, Iranian-U.S. relations appeared to be able to be salvaged despite all the history, because “the problem was Sunni not Shia,” referencing Iran’s predominantly Shia population as opposed to Saddam Hussein’s Sunni beliefs. These appearances were not to be, as in 2002 President George W. Bush included Iran in the “axis of evil” with Iraq and North Korea, despite the tension between Iraq and Iran and the recent, bloody eight year war fought between them.
Oil had a large role in shaping much of the Iranian-U.S. relations, but there was more to it than that throughout its history. America’s relationship with the Shah of Iran was immensely important, because the U.S. involvement in placing the Shah in power not only shaped the complicated relationship during his rule, but resulted in problematic suspicious of the Iranian people after the Iranian Revolution. Misconceptions and misunderstandings have also doomed U.S.-Iranian relations, such as grouping Iran in with Iraq, despite Iran selling arms to militant groups.