BP in the Gulf -- The Persian Gulf

How an Oil Company Helped Destroy Democracy in Iran

To frustrated Americans who have begun boycotting BP:
Welcome to the club. It's great not to be the only member any more!

Does boycotting BP really make sense? Perhaps not. After all, many
BP filling stations are actually owned by local people, not the
corporation itself. Besides, when you're filling up at a Shell or
ExxonMobil station, it's hard to feel much sense of moral triumph.
Nonetheless, I reserve my right to drive by BP stations. I started doing
it long before this year's oil spill in the Gulf of Mexico.

My decision not to give this company my business came after I learned
about its role in another kind of "spill" entirely -- the destruction
of Iran's democracy more than half a century ago.

The history
of the company we now call BP has, over the last 100 years, traced the
arc of transnational capitalism. Its roots lie in the early years of
the twentieth century when a wealthy bon vivant named William
Knox D'Arcy decided, with encouragement from the British government, to
begin looking for oil in Iran. He struck a concession agreement with
the dissolute Iranian monarchy, using the proven expedient of bribing
the three Iranians negotiating with him.

Under this contract, which he
designed, D'Arcy was to own whatever oil he found in Iran and pay the
government just 16% of any profits he made -- never allowing any Iranian
to review his accounting. After his first strike in 1908, he became
sole owner of the entire ocean of oil that lies beneath Iran's soil. No
one else was allowed to drill for, refine, extract, or sell "Iranian"

"Fortune brought us a prize from fairyland beyond our
wildest dreams," Winston Churchill, who became First Lord of the
Admiralty in 1911, wrote later. "Mastery itself was the prize of the

Soon afterward, the British government bought the
D'Arcy concession, which it named the Anglo-Persian Oil Company. It
then built the world's biggest refinery at the port of Abadan on the
Persian Gulf. From the 1920s into the 1940s, Britain's standard of
living was supported by oil from Iran. British cars, trucks, and buses
ran on cheap Iranian oil. Factories throughout Britain were fueled by
oil from Iran. The Royal Navy, which projected British power all over
the world, powered its ships with Iranian oil.

After World War II, the winds of nationalism and anti-colonialism
blew through the developing world. In Iran, nationalism meant one
thing: we've got to take back our oil. Driven by this passion,
Parliament voted on April 28, 1951, to choose its most passionate
champion of oil nationalization, Mohammad Mossadegh, as prime minister.
Days later, it unanimously approved his bill nationalizing the oil
company. Mossadegh promised that, henceforth, oil profits would be used
to develop Iran, not enrich Britain.

This oil company was the
most lucrative British enterprise anywhere on the planet. To the
British, nationalization seemed, at first, like some kind of immense
joke, a step so absurdly contrary to the unwritten rules of the world
that it could hardly be real. Early in this confrontation, the
directors of the Anglo-Iranian Oil Company and their partners in
Britain's government settled on their strategy: no mediation, no
compromise, no acceptance of nationalization in any form.

British took a series of steps meant to push Mossadegh off his
nationalist path.

They withdrew their technicians from Abadan, blockaded the port, cut
off exports of vital goods to Iran, froze the country's hard-currency
accounts in British banks, and tried to win anti-Iran resolutions from
the U.N. and the World Court. This campaign only intensified Iranian
determination. Finally, the British turned to Washington and asked for a
favor: please overthrow this madman for us so we can have our oil
company back.

American President Dwight D. Eisenhower,
encouraged by his Secretary of State John Foster Dulles, a lifelong
defender of transnational corporate power, agreed to send the Central
Intelligence Agency in to depose Mossadegh. The operation took less
than a month in the summer of 1953. It was the first time the CIA had
ever overthrown a government.

At first, this seemed like a remarkably successful covert operation.
The West had deposed a leader it didn't like, and replaced him with
someone who would perform as bidden -- Mohammad Reza Shah Pahlavi.

From the perspective of history, though, it is clear that Operation
Ajax, as the operation was code-named, had devastating effects. It not
only brought down Mossadegh's government, but ended democracy in Iran.
It returned the Shah to his Peacock Throne. His increasing repression
set off the explosion of the late 1970s, which brought to power
Ayatollah Khomeini and the bitterly anti-Western regime that has been in
control ever since.

The oil company re-branded itself as British Petroleum, BP Amoco, and
then, in 2000, BP. During its decades in Iran, it had operated as it
pleased, with little regard for the interests of local people. This
corporate tradition has evidently remained strong.

Americans are outraged by the relentless images of oil gushing into Gulf
waters from the Deepwater Horizon well, and by the corporate
recklessness that allowed this spill to happen. Those who know Iranian
history have been less surprised.

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