Environmental Engineering Reference
In-Depth Information
Iran wanted to achieve the same kind of profit-share with Britain's
Anglo-Iranian Oil Company. But Britain resisted, in a way that still col-
ours Anglo-Iranian relations today. Acutely aware of its oil dependence on
Iran, the UK government had already shown a tendency to treat Iran as
a colony: indeed UK troops occupied part of it during World War II. So
in 1951 the Iranian government of prime minister Mohammed Mossadeq
decided to nationalize Anglo-Iranian. In 1953 Britain and the US sup-
ported a coup against Mossadeq and restored the Pahlevi dynasty of the
Shahs. Britain got back part of its concession, but had to share the rest
with the US.
Not all of Mossadeq's work was undone. The National Iranian Oil
Company that he set up remained in being as the owner of the oil, with
the status of foreign oil companies reduced to that of sub-contractors to
NIOC.
Nationalizations and nationalism
The year 1971 brought a bumper crop of oil nationalizations. There were
many reasons for other oil-producing governments to finally follow the
lead set long before by Mexico and Iran. Among them were a tighter oil
market giving producers more leverage; a steady decline in the standing
of the US in world opinion because of Vietnam, and of Britain and France
in Middle East opinion since their disastrous joint venture at Suez in
1956 (both of which made retaliation less likely); and frustration with the
power of the US and European concessionaires.
Most believe that 1973 was the first time that the Arab oil producers
wielded their “oil weapon”, with their boycott of the US for its support of
Israel during the October 1973 Arab-Israeli conflict. In fact, in response
to the 1967 Arab-Israeli Six Day War, the governments of Saudi Arabia,
Kuwait, Iraq, Libya and Algeria banned shipments of oil to the US and UK
for backing Israel. But the move had almost no impact at all, because the
IOCs ran the international oil trade and asked Venezuela and Iran which
was not only not an Arab country, but at that time friendly with Israel to
pump more oil.
In that year, Algeria completed its takeover of foreign oil assets by
nationalizing French oil interests, Iraq pursued further its nationaliza-
tion of foreign stakes in the Iraq Petroleum Corporation, and Libya's new
Colonel Moammar Qaddafi nationalized BP assets. This last act was a
purely political move by Qaddafi, who took over BP in protest at Britain's
