Iran's Oil Has Long Been at the Center of Geopolitics. A Look Back at the History. -- Barrons.com

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By Kenneth G. Pringle

Seventy-three years ago, the decapitation of Iran's government was a smaller affair than that just carried out by the combined militaries of the U.S. and Israel. But it was no less successful.

"Forces loyal to the absent Shah of Iran swept iron-willed, weepy old Premier Mohammed Mossadegh out of power today with a bloody nine-hour coup," the Associated Press wrote Aug. 20, 1953. "At least 300 persons were killed and one of Mossadegh's chief henchmen was 'torn to pieces' by an attacking mob."

America's involvement was widely suspected at the time, but only in 2013 was the full extent of the CIA's role in planning and executing the coup revealed. British intelligence joined in the cloak-and-dagger mission.

President Donald Trump's approach to regime change in Iran is more blunt. His stated objectives for the operation have varied from supporting Iranian dissidents to preventing the nation from developing nuclear weapons to ending its support for global terrorism.

Yet, behind everything else is oil. Iran's proven oil reserves are the third-largest in the world, and it controls the Strait of Hormuz, the crucial shipping chokepoint that links the Persian Gulf with the Indian Ocean.

Today, oil accounts for about half of global energy consumption, and its byproducts are used in everything from plastics to refrigerants, pharmaceuticals, and much more. Like it or not, the world still runs on oil.

That is why Iran and the oil-rich nations of the Middle East are at the center of geopolitics.

It has been that way for more than a century.

"To me," the British politician George N. Curzon wrote in 1892, "[the Middle East] are the pieces on a chessboard upon which is being played out a game for the dominion of the world."

The game is still a'foot.

It was in 1901 that British businessman William Knox D'Arcy, flush with cash from developing an Australian gold mine, heard about a fortune to be made in Iranian oil.

It just so happened that the reigning shah, Mozaffar ad-Din, needed cash, fast. They made a deal.

The shah got GBP20,000, shares in the new oil company, and 16% of its profits. D'Arcy got an exclusive, 60-year concession to "exploit, develop, render suitable for trade, carry away and sell" Iran's vast southern oil fields.

D'Arcy struck oil seven years later, and in 1914 the British government bought a controlling stake in Anglo-Persian Oil Co., predecessor to BP. Iranian oil would power the Royal Navy and sustain the British Empire through two world wars.

Britain "effectively reduced Iran to the status of a British protectorate," according to Stephen Kinzer in All the Shah's Men : An American Coup and the Roots of Middle East Terror.

As the nation's oil wealth flowed offshore, the Iranian people were left to struggle with poverty, underdevelopment, and corrupt leadership. It was a powder keg waiting to blow.

"Simply by granting" the oil concession, Kinzer wrote, Mozaffar ad-Din "shaped all of subsequent Iranian history."

Mohammed Mossadegh, the "weepy old" prime minister deposed in 1953, was a leader among pro-democracy Iranians who resisted colonial control. Taking office in 1951, Mossadegh introduced a reform program that included nationalization of the oil industry.

"With the oil revenues, we could meet our entire budget and combat poverty, disease, and backwardness among our people," Mossadegh said in a June 21, 1951, speech.

Britain threatened to use force to get its oil company back, and it wanted America's help.

The idea wasn't well-received.

"Is the U.S. to risk the danger of being engulfed in World War III over the issue of whether a Britisher or an Iranian is to control the company operating the nationalized oil fields?," the Philadelphia Inquirer asked on Aug. 25, 1951.

President Harry Truman answered "no."

But in 1953, the incoming Eisenhower administration, worried the Soviets might get to Iran's oil first, agreed to a covert mission with Britain.

Shah Muhammad Reza Pahlavi reluctantly went along with the plan, dubbed Operation Ajax, though he fled town before its Aug. 15, 1953, launch.

As originally conceived, Mossadegh was to be quietly arrested and replaced by a pliant new prime minister, Gen. Fazlollah Zahedi. But the secret got out. Mossadegh foiled the arrest attempt, and the streets filled with clashing factions.

Four days later, pro-shah mobs -- funded by the CIA -- joined with military forces loyal to Zahedi to storm government buildings and seize control.

Mossadegh fled "from his bed in a Hitler-type bunker," the AP reported, escaping capture.

"I want to see Mossadegh's head on a pole -- then I'll believe he's finished," one British intelligence officer told The Wall Street Journal on Aug. 20, 1953.

Mossadegh soon turned himself in, was convicted of treason, served time in prison, and died under house arrest in 1967.

The shah heard news of the coup in Rome, where he arrived "a rumpled refugee," according to the New York Daily News on Aug. 20, 1953. But he "was all set tonight to return to Iran as King of Kings."

"I hope my nation and army will always be able to remain free and preserve its independence and sovereignty," said the shah, who stayed an extra day in Rome waiting for something other than a British plane to fly him home.

The shah returned as an absolute monarch, crushing opponents and banning dissent. The National Iranian Oil Co. returned to foreign control, this time by a consortium of Western oil companies, including the U.S.

Not much changed for the Iranian people. The same anger over lost oil wealth and a monarch in the pocket of foreign interests boiled over again in the 1970s, this time driven by religious furor from the charismatic Ayatollah Ruhollah Khomeini.

Amid rioting, the shah fled Iran once again on Jan. 16, 1979, never to return. Yet the Iranian people exchanged one authoritarian regime for another, suffering under strict Islamic law as the nation's oil resources were now directed to the military and to terrorist partners like Hezbollah.

Trump has decided to risk a larger conflagration to achieve his ends against Iran. The initial military attack killed Iran's supreme leader, Ayatollah Ali Hosseini Khamenei -- who succeeded Ruhollah Khomeini -- and many of the nation's senior officials. Iran has since launched strikes against Israel and other Middle East targets. Casualties are piling up.

The bombardment may continue "four to five weeks" or more, Trump said, without detailing an end strategy.

The game, as Curzon called it back in 1892, continues.

Write to editors@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

 

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March 05, 2026 13:10 ET (18:10 GMT)

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