Few upheavals in the Middle East have had wider aftershocks than the 1953 coup that overthrew the Iranian nationalist leader Mohammed Mossadeq. As seen by Mossadeq and his National Front Party, the chief issue was Iran's right to nationalize a British oil giant that held exclusive rights to drilling and selling the country's petroleum. As seen by the incoming Eisenhower administration in Washington, something very different was at stake--a possible Soviet takeover in Tehran, its way prepared by Tudeh, the Iranian Communist Party. But to many Iranians, the United States betrayed its own values by covertly joining with Britain to depose an elected leader, and then abetting the imperial ambitions of Shah Mohammed Pahlevi. For Americans, the unintended result was the rise of political Islam, leading to the 1979 revolution and the present continuing impasse in Iranian-U.S. relations.
Containing communism was the justification for the coup, but by the coldest reckoning the price was excessive. The Shah's legitimacy was irreparably compromised by owing his throne to Washington. It is a reasonable argument that but for the coup Iran now would be a mature democracy. So traumatic was the coup's legacy that when the Shah finally departed in 1979, many Iranians feared a repetition of 1953, which was one of the motives for the student seizure of the U.S. embassy. The hostage crisis, in turn, precipitated the Iraqi invasion of Iran, while the revolution itself played a part in the Soviet decision to invade Afghanistan. A lot of history, in short, flowed from a single week in Tehran.
With this in mind, it is worth looking again at what happened in August 1953, when the Shah dismissed Mossadeq as prime minister, and then fled the country after National Front demonstrators took to the streets. This was followed by counterdemonstrations promoted by the Central Intelligence Agency (CIA) and Britain's Secret Intelligence Service, and when it appeared that Operation Ajax was succeeding, the Shah returned to reclaim the Peacock Throne. Once back in his palace, the Shah thus thanked Kermit Roosevelt, grandson of Theodore and head of the CIA's Middle East Department: "I owe my throne to God, my people, my army--and to you!" Or so Roosevelt quoted him in his 1979 memoir, Countercoup.
Yet nothing about the 1953 events was that simple. This essay will attempt to explore the complex factors--the people, the countries, and the parties--that played a part in what was hardly an inevitable outcome. What is striking is that until the final months Washington resisted joining with Britain to unseat Mossadeq, and that even within the CIA, the Tehran station chief was reportedly opposed to "putting U.S. support behind Anglo-French colonialism."
First, the essential background. Exclusive rights to explore and exploit oil in Iran's southern provinces were granted in 1901 to William Knox D'Arcy, a British-born investor who had gained a fortune in the Australian gold rush. The initial drilling was disappointing, but his gamble paid off in 1908 when oil was struck just as the British navy was fully converting from steam to petroleum. So strategically important was Iranian oil that in June 1914, just before the outbreak of the First World War, the British Parliament took the unusual step of approving the government's investment of 2.2 million pounds to acquire 51 percent of the stock in the Anglo-Persian Oil Company. The effect was to raise the diplomatic stake when differences developed over the company's 60-year concession.
Although some contract modifications were made in 1919, the oil company's one-sided contract remained in effect until the 1930s-it paid only 16 percent of its profits to Iran, had complete control over export prices, kept its records secret (including the below-market prices the British navy paid for its oil), and did little to replace expatriate technicians with Iranians. In 1932, Iran canceled the contract, and after prolonged negotiations involving the Court of International Justice, the company increased Iran's share of royalties under a new formula in a fresh concession that was to last a further 32 years. Yet Tehran's justifiable grievances persisted with what was now called the Anglo-Iranian Oil Company, or AIOC. The world's oil economy was transformed in 1949-50 when Saudi Arabia and the Arabian-American Oil Company, or Aramco, negotiated a 50-50 revenue split-this at a time when AIOC was paying more in British taxes than it was in royalties to Iran. On July 19, 1949, in a surprising display of legis lative muscle, the Iranian Parliament, or Majlis, refused to ratify a too-little, too-late supplemental oil agreement meant to improve concession terms, dealing a blow to both the Shah and AIOC. By the time the oil company belatedly agreed to match Aramco's 50-50 split, opposition forces were fully committed to nationalization. On March 15...