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Anglo-American Relations and Cold War Oil

Part of the book series: Cold War History Series ((CWH))

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Abstract

Eisenhower’s handling of the Anglo-Iranian oil crisis has been intensely scrutinised. He presided over the final oil settlement and a defining moment in postwar American-Iranian relations, and his election raised British hopes of closer Anglo-American accord. Moreover, much scholarly comment has been made of apparent differences in the approaches of the Truman and Eisenhower administrations to the oil dispute. These issues pose interesting questions about Anglo-American relations during the closing phase of the oil crisis from 1953 to October 1954. Was Eisenhower’s approach to Britain and Iran as different as some have claimed? Did the pattern of Anglo-American exchanges change markedly? Why did Eisenhower resort to covert action against Iran, and what influence did Britain have upon this decision? And what does the final oil settlement reveal of developments between the major players over the period of the crisis?

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Notes and References

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  149. DDE, Ann Whitman File 1953–61, NSC Series, box 4, NSC 147, 1 Jun. 1953, p.4; ibid., NSC 132, 18 Feb. 1953; US Embassy report 14 Aug. 1953 cited Azimi, Politics of Dynamic Stalemate, p.402. By 1952/53 the economy was in a sustainable balance of payments and fiscal position without oil income and could probably have continued indefinitely without further belt-tightening measures. P. Clawson and C. Sassanpour, ‘Adjustment to a Foreign Exchange Shock: Iran, 1951–1953’, International Journal of Middle East Studies (1987), vol. 19, 1–22.

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  150. DDE, Ann Whitman file, NSC Series, box 4, memoranda of 147th meeting NSC on 1 Jun. 1953, 2 Jun. 1953; FRUS Iran 1952–54, vol. 10, Henderson to State Dept, 4 Mar. 1953, footnote 2, p.692.

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  152. FRUS Iran 1952–54, vol. 10, Berry to State Dept, 17 Aug. 1953, p.748.

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  153. This conclusion was reached explicitly in planning the coup. Secret History, Appendix B, p.27, www.cryptome.org/cia-iran-all.htm. Henderson reached a similar position. Whereas in July 1952 he warned that a successful military coup would lead to Tudeh control of the nationalist movement, he had decided that ‘nothing whatever was to be hoped for from Mussadeq’ and the position at the end of March, after Mosdaeq’s rejection of British terms, to be such that the risks involved in a change of government ‘would not be too great’. FRUS Iran 1952–54, vol. 10, Henderson to State Dept, 31 Jul. 1952, p.427; ibid., 31 Mar. 1953, p.721; FO 371/104616, Makins to Bowker, 26 Jun. 1953. It is interesting that by May 1953 the British had turned volte face on Pierson Dixon’s previous description of Henderson as ‘maddeningly “neutral’ ‘. On 12 May Pierson Dixon himself applauded Henderson’s conduct, noting that his ‘reactions to Musaddiq’s recent intermittent attempts to entangle him have been exemplary; & I think we can rely on him to give Mr Dulles good advice.’ He might also stiffen the Anglo-American front, especially as he was less than overwhelmed by the collective wisdom of the State Department and therefore inclined to speak his mind. Rothnie even proposed that Britain ‘tell him in a fairly formal way, that H.M.G. admire, and are very grateful for, the way he has handled things in the last five months’. FO 371/104615, handwritten comment Pierson Dixon 12 May 1953 on memo. A.D.M. Ross, ‘Persia’, 11 May 1953; FO 371/104616, Makins to J. Bowker, 26 Jun. 1953; ibid., minute A.K. Rothnie, 27 May 1953; CM. Woodhouse, Something Ventured, p. 106. Mosadeq even claimed that Henderson was ‘a highly effective instrument of British policy in Iran’. Katouzian (ed.), Musaddiq’s Memoirs, p.272.

  154. Early accounts of the coup were generally sympathetic to Mosadeq. However, increasingly scholars have criticised his failure to realise when he had actually won, his over-reliance on the Tudeh and his tactics of overly invoking the communist threat. Wilber blames ‘the totally destructive and reckless attitude of the government of Prime Minister Mossadeq’, and Bill argues that, whilst the Eisenhower administration could have looked at the alternative of buttressing Mosadeq rather than assisting his fall, ‘that strategy had been attempted over the previous two years, American policymakers concluded, and had not produced success’. Secret History, www.cryptome.org/ cia-iran-all.htm, p.2; Rubin, Paved, p.81. Also Yergin, The Prize, p.467; Acheson, Present, p.510; Ruehsen, ‘Operation “Ajax”’, p.483.

  155. Opinions differ about the root cause of communism’s impact on Eisenhower’s decision to launch the coup. Eisenhower and Dulles emphasise a pressing communist threat to Iran. Dulles has since equated Mosadeq with Arbenz in Guatemala and Eisenhower has stressed Mosadeq’s reliance on the Tudeh and rumours of Soviet readiness to advance him $20 million. Others, such as Kuniholm, agree about the communist threat but blame the US rather than Mosadeq for this along the lines that Truman’s concern for contracts and refusal to break with Britain’ set in motion a self-fulfilling prophesy, driving Mossadegh leftward and fanning the fires of Iranian anti-Americanism’. Still others, such as Ferrier, attach blame to Mosadeq for his use of the communist threat as a bargaining tool. A.W. Dulles, The Craft of Intelligence (London: Weidenfeld & Nicolson, 1963), p.219; Eisenhower, The White House Years, p.163; D. Little, ‘Gideon’s Band: America and the Middle East Since 1945’ Diplomatic History (1994), vol. 18, p.519. Also Rubin, Paved, pp.57-59; Kuniholm, ‘U.S. Policy in the Near East’, in Lacey (ed.), Truman Presidency, p.337; R.W. Ferrier, ‘A Triangular Relationship’, in Bill and Louis (eds), Musaddiq, p.190.

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  156. This conclusion is partially supported by Rubin who, while condemning the morality of the decision, sees Eisenhower’s approval of the coup as ‘not necessarily illogical’. Both J.A. Bill and M.J. Gasiorowski have contended that without the coup there was no certainty that Mosadeq would fall. Rubin, Paved, p.88; Bill, Eagle, pp.86-97; Gasiorowski, Building a Client State, pp. 72–84.

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  157. On 29 July the State Department Office of Intelligence and Research declared the opposition to Mosadeq weak and incapable of unified action (What was Learned, p.89). Also, agreement was never reached on the reliability of the Shah, it was considered that’ security... is a serious weakness in the Iranian character’ (Appendix B p.26), and that co-opted military officials could not be relied upon, not least because ‘The Iranian officer is usually indecisive and covers his inferiority with bombast and chest beating’ (Appendix E, p.21). Secret History, www.cryptome.org/cia-iran-all.htm.

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  159. Bamberg, History of BP, p.494.

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  160. FO 371/104577, minute Dixon, 21 Aug. 1953.

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  161. Cited Elm, Oil, Power, and Principle, p.313.

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  162. Bamberg, History of BP, p.501.

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  163. FO 371/110048, Makins to FO, 17 Mar. 1954.

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  164. DDE, J.F. Dulles Papers, Telephone call series, box 2, telephone memos. Mar. 1954-Apr. 30 1954 (3), telephone conv. with Secretary Wilson, 17 Mar. 1954, 10.15 am; ibid., 9.25 am.

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  165. Bamberg, History of BP, p.509.

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  166. Cf. conclusion chapter.

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  168. Cited Engler, Politics of Oil, p.209. Also A. Sampson, Seven Sisters: The Great Oil Companies and the World They Shaped (London: Hodder and Stoughton, 1975), p.151; D.S. Painter, Private Power and Public Policy: Multinational Oil Corporations and U.S. Foreign Policy, 1941–1954 (London: LB. Tauris, 1986), pp.197-8.

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  169. Bill and Louis (eds), Musaddiq, p.12.

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  172. The Sunday Express, 18 Apr. 1954, cited Elm, Oil, Power, and Principle, p.319.

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  173. Fesharaki disagrees, pointing to the importance of the NIOC and the invaluable learning process it enjoyed under the new arrangement. Fesharaki, Iranian Oil Industry, pp.59-60.

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© 2003 Steve Marsh

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Marsh, S. (2003). Enter the Republicans. In: Anglo-American Relations and Cold War Oil. Cold War History Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230287655_7

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