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Nationalization of the Iranian Oil Industry

Oil Nationalization Day, Iran

The nationalization of the Iranian oil industry was the result of a movement in the Iranian parliament (majlis) to seize control of Iran's oil industry, which was run by private companies largely controlled by foreign interests. The law was passed on March 15, 1951 and verified by the Majlis on March 17, 1951. The law led to the nationalization of the Anglo-Iranian Oil Company (AIOC). The movement was led by Mohammad Mossadegh, a member of the Majlis of the National Front and the future Prime Minister of Iran.

The movement to nationalize the oil industry was a reaction to the following concessions made by Iran to foreign powers: Reuter's 1872 concession, letter of intent, 1933 agreement between the Iranian government and AIOC and Gagogolshaev. According to political scientist Mark J. Gasiorowski, the oil nationalization movement had two main outcomes: the establishment of a democratic government and the pursuit of Iranian national sovereignty.

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Since the discovery of oil in Iran, foreign powers have used force and exploited the weakness of the Iranian state to obtain concessions allowing foreign companies to control oil production. The reaction to these foreign interventions was the nationalization of the oil industry.

In particular, the following concessions:

  • 1872 Reuter's concession
  • Proceeding letter
  • 1933 agreement between Iran and AIOC
  • Gass-Gulshayan Supplementary Oil Agreement of 1949

Relations between Iran and AIOC have never been smooth. In 1932, Iran was considering expropriation. Tensions increased in the 1940s as British taxes increased and royalties to Iran decreased. By 1948, Britain received significantly more AIOC revenue than Iran. Negotiations aimed at resolving this and other Iranian problems have exacerbated rather than eased tensions.

The competition for more control of the Iranian oil industry intensified during World War II, when Britain, the Soviet Union, and the United States became involved in Iran's affairs. Faced with demands from the oil companies of these three countries, the Iranian government announced that the issue would be resolved after the war. No agreement was reached after the war. Gholamhossein Rakhimiyan, an MP from Kuchan in the 14th Majlis, was the first to introduce a plan to nationalize the oil industry.

However, this plan was never discussed. On October 23, 1949, in the house of Mohammad Mossadegh and in the presence of twelve experts, the National Front (political party) was created. It consisted of various political efforts, the common goal of which was to protect the rights of the Iranian oil industry.

Mosaddegh (1882–1967) was an Iranian politician and leader of the movement to nationalize Iran's oil industry. He was educated in Europe and entered politics after the Iranian constitutional revolution of 1905–1907. He has held several positions such as Member of Parliament, Governor of Fars Province, Minister of Finance, Minister of Foreign Affairs and Prime Minister.

In the elections to the 14th Majlis in 1943, he was elected as a deputy from Tehran. Before gaining recognition as the leader of the national oil movement, he played a large role in the Trans-Iranian Railway project and the reorganization of the courts and the Ministry of Justice.

The 16th Majlis consisted of some members of the National Front such as Mosaddegh. Mossadegh attempted to check the AIOC documents to make sure AIOC was paying contract fees to Iran and to limit the company's control over Iranian oil reserves. AIOC refused to cooperate with the Iranian government.

In November 1950, the oil committee of the Majlis, which was headed by Mossadegh, proposed to abandon the oil supplementary agreement. The then Prime Minister Haj Ali Razmara opposed the measure. On March 7, 1951, Razmara was assassinated by Khalil Tahmasebi, a member of Fadayan-e Islam.

After the death of Razmara, the Majlis began the process of nationalizing the Iranian oil industry. On March 15, 1951, the Majlis adopted a law on the nationalization of the oil industry by a majority vote.

On March 17, the Majlis confirmed the nationalization of Iran's oil industry, and the AIOC was nationalized.

Iran National and Public Holidays