The Abadan Crisis was a major event in the history and development of modern Iran. The crisis began in 1951 after the Iranian government, under the democratically elected Prime Minister, Mohammad Mosaddegh, nationalized the British owned Anglo-Persian Oil Company, including the Abadan Refinery. In 1901, local Iranian sovereigns had sold an oil concession covering much of the country's southwest, to William Knox D'Arcy, by the time oil was discovered in commercial quantities in May 1908, D'Arcy was nearly bankrupt and sold his rights to the Anglo-Persian Oil Company in 1909. In the decades that followed the British profited immensely from the concession returns, local Iranians employees labored in often abysmal conditions while the APOC earned millions of pounds. The British hid the earnings of APOC from the Iranian government and refused to comply with the profit-sharing terms they had been agreed to.
The nationalization of the Anglo-Iranian Oil Company's assets namely oil refinery in Abadan infuriated the British Government who imposed a blockade of Iranian oil exports and began conspiring to overthrow the elected government. Eventually, the CIA orchestrated a successful coup in 1953, which enabled the Shah to rule autocratically for the next 26 years.
Background Year Date Event Significance 1925 Mohammed Mosaddeq opposes coronation of Reza Shah. Establishing a reputation for integrity.Mackey, Sandra, 1937- , The Iranians : Persia, Islam and the soul of a nation, New York : Dutton, c1996, p.187-210 1930s Mosaddeq is hounded from public life by the powerful Reza Shah.Mackey p.187-210 1941 Reza Shah deposed during the Anglo-Soviet invasion of Iran and his son Mohammad Reza Shah is placed on the throne Mosaddeq re-emerges as a popular hero. 1946–1949 The National Front, a coalition of parties and groups comes together with the goal of moving Iran's oil resources from British to Iranian control. Mosaddeq emerges in the leadership.Mackey p.196" Marks the arrival in Iranian politics of an organized and sophisticated bloc opposed to British control of Iranian resources.Kinzer, Stephen, All the Shah's Men : An American Coup and the Roots of Middle East Terror, Stephen Kinzer, John Wiley and Sons, 2003, p.71 1946March Oil workers at Abadan strike for better housing, decent health care and enforcement of Iranian labor laws. British management brings in Arab and tribal strike breakers. Raises awareness of workers' plight and British high handedness.Kinzer, All the Shah's Men, (2003), p.52 1949 May Supplemental oil agreement offer by the British - guarantees royalty payments by AIOC "would not drop below 4 million pounds", a reduced area in which it would be allowed to drill, and a promise that more Iranians would be trained for administrative positions." But gives no "greater voice in company's management" or right to audit the company books. Prime Minister tried to argue with AIOC chairman, but chairman Fraser "dismissed him" and flies back to UK.Kinzer, All the Shah's Men (2003) p.68 Arrogance of AIOC increases popular support for nationalization. 1950 Summer New American ambassador Henry Grady arrives in Iran to a greeting of protests by thousands of Iranians. Several protesters are killed. Grady is unknown in Iran but serves as a supporter of Mosaddeq over the UK during the crisis. Example of anti-Western and heavily politicized atmosphere at the time.Kinzer, All the Shah's Men (2003) p.73 1950 Summer General Haj Ali Razmara becomes prime minister. Favorite of British, PM opposes nationalization. 1950 November 25 Supplemental Agreement rejected unanimously as inadequate by Mosaddeq-chaired parliamentary commission.Mackey p.198Kinzer, All the Shah's Men (2003) p.76 Nationalization gains further momentum. 1950 December, late Word reaches Tehran of the Arabian American Oil Company deal to share profits with Saudis on a 50-50 basis. UK Foreign Office rejects idea of following suit. (p. 76-7). Makes Supplemental Agreement look even worse to Iranians.Kinzer, All the Shah's Men (2003) p.76-7 1951 January Huge rally in Tehran to launch campaign to force nationalization of Anglo-Iranian Oil Company. National Front politicians are succeeded at the podium by a parade of mullahs issuing fatwas ordering support by Muslims for nationalization.Kinzer, All the Shah's Men (2003) p.77 1951 March 3 Razmara appears before majlis oil committee warning of illegality of nationalization, of the unpredictability of British retaliation, and of the potential devastation to Iran's economy from retaliation.Kinzer, All the Shah's Men (2003) p.78 1951 March 7 Prime Minister Razmara assassinated by Fadayan-e Islam. Majlis rejects Shah's choice for successor and three weeks later votes for Hussein `Ala as new PM. Openness of Fadayan-e Islam and lack of any public sympathy for Rezmara intimidates politicians who oppose nationalization.Abrahamian, Ervand, Iran between two revolutions, Princeton, N.J. : Princeton University Press, c1982, p.266 1951 March 15–20 Vote for nationalization of oil industry by Majlis and then Senate.Abrahamian, 1982, p.266 1951 early April Strikes and riots led by the communist Tudeh party protesting low wages and bad housing in oil industry and delays in nationalizing the oil industry. "Street demonstrations and sympathy strikes in Tehran, Isfahan, and the northern cities." Police in Abadan open fire, killing six workers. Britain sends gunboats "to protect British lives and property." Mossadeq offered the premiership so that he could implement the nationalization law.Abrahamian, 1982, p.267
Mosaddeq becomes prime minister Year Date Event Significance 1951 April 29 Mosaddeq voted Prime Minister. Basks in acclaim of "respect, devotion, loyalty" by Iranians.Mackey p.199 Cabinet is "noticeably conservative" with royalists included. National Front and Mosaddeq's "main source of strength" is in "the streets" not in its parliamentary numbers. 1951 May 1 Shah signs law revoking Anglo-Iranian's concession and establishing the National Iranian Oil Company. Nationalization official.Kinzer, All the Shah's Men (2003) p.91 1951 May 26 The UK government lodges a formal complaint against Iran with the International Court of Justice. The court would rule in favor of Iran July 22, 1952. 1951 June Mosaddeq sends committee of five (including four National Front deputies) created by Majlis to Khuzestan to take over the oil installations" and implement the nationalization law.Abrahamian 1982, p.268 Nationalization takes shape. 1951 July Mosaddeq breaks off negotiations with AIOC when the latter threatens "to pull out its employees," and warns "tanker owners [that] the receipts from the Iranian government would not be accepted on the world market." Confrontation escalates. 1951 July 15 US diplomat W. Averell Harriman arrives in Tehran to attempt to negotiate an end to the crisis; he is greeted by 10,000 protesters shouting "Death to Harriman". More than 20 people are killed and 2000 wounded in the protests. (p. 102)Kinzer, All the Shah's Men (2003) p.101-2 Further escalation. 1951 August 22 British cabinet imposes a series of economic sanctions on Iran: Prohibits the export of key British commodities, including sugar and steel; directs the withdrawal of all British personnel from Iranian oil fields and all but a hard core of about 300 administrators from Abadan; and blocks Iran's access to its hard currency accounts in British banks.Kinzer, All the Shah's Men (2003) p.110 Economic situation in Iran begins to deteriorate. 1951 September AIOC evacuates its technicians and closes down the oil installations, while the British government reinforces its naval force in the Persian Gulf and lodges complaints against Iran before the United Nations Security Council. 1951 October 19 Mosaddeq travels to the US to appear before the UN to present the Iranian case. After listening to both Mosaddeq and the British UN ambassador, the UN Security Council votes to `postpone discussion of the question to a certain day or indefinitely.` "Humiliating diplomatic defeat" for the British.Kinzer, All the Shah's Men (2003) p.127 1951 October 23 Mosaddeq travels to Washington DC to negotiate with US government and seek financial assistance from the World Bank. Unsuccessful, no relief for Iran's economy. 1952 January? February? Elections held despite lack of reform to exclude illiterates. "Realizing that the opposition would take the vast majority of the provincial seats, Mosaddeq stopped the voting as soon as 79 deputies - just enough to form a parliamentary quorum - had been elected."Abrahamian, 1982, p.268-9 Mosaddeq asserts that `foreign agents` have been exploiting the election campaign with bribes to destabilize Iran, and thus `the supreme national interests of the country necessitate the suspension of elections."Kinzer, All the Shah's Men (2003) p.137 Halt of vote counting is seen as a defense against subversive British agents by some, and "as undemocratic and grasping for personal power" by others. 1952 February 17th Majlis convenes. National Front, or pro-National Front, deputies occupy 30 out of 79 seats. Opposition harasses Mosaddeq "with side skirmishes" refusing to vote for special powers to deal with the economic crisis caused by the rapidly dwindling oil revenues", voice regional grievances against the capital. National Front, in turn, wages "a propaganda war against the landed upper class.".Abrahamian, 1982, p.270 1952 With the departure of most foreign personnel, oil production falls from lack of maintenance and expertise. Oil boycott engineered by AIOC. Mosaddeq appeals to United States to mediate.Mackey p.201 1952 July UK Royal Navy warships intercept Italian tanker Rose Mary after it leaves Iran and force it into the British protectorate of Aden on the grounds that the ship's oil was stolen property. News of this scares off other customers and tanker owners, staunching the small flow of Iranian oil exports.Kinzer, All the Shah's Men (2003) p.138 1952 July Britain's boycott becoming devastatingly effective. Iranians "becoming poorer and unhappier by the day". Mosaddeq's political coalition beginning to "fray", his enemies increasing in number.Kinzer, All the Shah's Men (2003) p.135-6
Mosaddeq resigns, is reinstated and wins emergency powers