Transcription
Imagine a country sitting on top of one of the largest oil reserves on the planet. A country whose elected leader dares to say, "This oil belongs to us."
Now, imagine that within 2 years of making that statement, foreign intelligence agencies have bribed journalists, paid street gangs, planted fake newspaper stories, and organized mobs to storm through the capital, all to remove that leader and hand the oil back to foreign corporations. This is not a hypothetical scenario. This is exactly what happened in Iran in 1953.
And the aftershocks of that single event are still reverberating today, more than seven decades later, shaping everything from the 1979 Islamic Revolution to the hostage crisis to the nuclear standoff to the wars and proxy conflicts consuming the Middle East right now. This is the story of how Britain and the CIA overthrew a democratically elected government to protect an oil company. It is a story about greed disguised as geopolitics, imperialism dressed up as anti-communism and a covert operation so brazen that the CIA itself didn't publicly acknowledge its role for 60 years.
And at the center of it all is a man most people in the West have never heard of, a man named Muhammad Msad, whose only crime was believing that a country's natural resources should belong to its own people. To understand how this coup happened, you have to understand how Iran's oil was stolen in the first place. And for that we need to go back to the turn of the 20th century to a time when the Persian Empire was crumbling and European powers were circling like vultures.
In 1901 a British financier named William Knox Darcy negotiated a deal with the Sha of Persia, Mosafar Alin Sha Kajar. Darcy was a wealthy socialite who had made his fortune from a gold mine in Australia and he had a taste for high-risisk ventures. The deal he struck was breathtaking in its scope. In exchange for £20,000 in cash, another20,000 in company shares, and a promise of 16% of annual net profits, Darcy received the exclusive right to prospect for, extract, and sell oil across an area covering nearly 500,000 square miles of Persian territory. That is an area larger than the entire country of South Africa, handed to one man for pocket change.
Now, the Sha who signed this deal was not exactly negotiating from a position of strength. The Kajar dynasty was broke. The country had no modern institutions and the sha himself had been softened up with what historians politely call handsome bribes to key officials. The British minister in Tehran, Sir Arthur Harding, personally lobbyed for the deal. This was not a negotiation between equals. This was a fire sale and Darcy walked away with one of the most valuable concessions in history.
But finding oil in Persia turned out to be far harder than expected. The southern regions were brutally hot, reaching 50° C during the day and plunging to freezing at night. The terrain was controlled by hostile nomatic tribes who were suspicious of foreigners. Darcy poured money into expedition after expedition, led by [clears throat] a geologist named George Reynolds. And by 1904, he was nearly bankrupt. He had to sell a majority of his rights to the Burma Oil Company just to stay afloat.
By 1908, over half a million pounds had been spent, and the investors were ready to give up entirely. They sent Reynolds a telegram ordering him to cease all drilling. Then, almost like something out of a film, Reynolds struck oil. In May of 1908, at a site called Musjaded Solleman in southwestern Persia, his team hit a massive oil field. Commercial quantities of crude came gushing out of the ground. The following year in 1909, the Anglo Persian Oil Company was formally established to exploit the discovery. It would later be renamed the Anglo Iranian Oil Company and eventually it would become British Petroleum, the company we know today as BP.
Now, here is where the story takes a turn that explains everything that followed. In 1914, just as the first world war was about to engulf Europe, Winston Churchill, then the first lord of the Admiral T, made one of the most consequential decisions in military history. He decided to convert the entire British Royal Navy from coal power to oil power. Oil was lighter, more energy dense, and gave warships a longer range. But Britain had no domestic oil supply. It needed a guaranteed source, and Persia had exactly what Churchill needed. The British government purchased a 51% controlling stake in the Anglo-Persian oil company for2 million pounds.
With that single transaction, Iranian oil became not just a commercial asset, but a strategic pillar of the British Empire. The British government now had majority ownership. Two appointed directors with veto power over all company decisions and essentially a guaranteed supply of cheap fuel for the most powerful navy in the world. For Iran, this meant something very different. It meant that the country's most valuable resource was now effectively owned and operated by a foreign government.
Iranian workers labored in terrible conditions in the oil fields of Kustan. They lived in overcrowded shanty towns while British managers enjoyed manicured lawns, swimming pools, and aironditioned offices in segregated compounds. The oil company paid Iran a pittance in royalties and refused to let the Iranian government audit its books to verify that even those meager payments were correct. To give you a sense of how lopsided this arrangement was, in 1947 the Anglo-Iranian oil company reported after tax profits of4 million, Iran's share£7 million. That is 17.5% of the company's profits. Meanwhile, the British government was collecting more in taxes from the company than Iran was receiving in royalties from its own oil. The British were literally making more money taxing the profits from Iranian oil than Iran was making from owning the oil. Let that sink in for a moment.
And the exploitation extended far beyond the balance sheets. In the city of Abadan, sight of the company's massive refinery, which at its peak was the largest in the entire world. A rigid system of segregation separated British staff from Iranian workers. The British lived in a pristine green suburb with modern homes, cinemas, swimming pools, and social clubs. Iranian workers, the men who actually operated the machinery and hauled the crude, lived in a district called Kagazabad, which literally translates to paper city. Because many of the dwellings were made from flattened tin cans and old packing crates, there was no running water, no electricity, no sewage system. These men extracted one of the most valuable commodities on Earth and went home to shacks.
When Iranian politicians attempted to negotiate better conditions, the company stonewalled them. When the Iranian government asked to audit the company's books to verify that even the pitiful royalties were being calculated fairly, the company flatly refused. This was not just economic exploitation. This was humiliation on a national scale, and it bred a fury that would eventually consume everything. And it gets worse.
The company invested millions in expanding operations, building refineries around the world, assembling a massive tanker fleet, and developing new oil sources that would eventually compete with Iran, all funded by revenue generated from Iranian crude. But the profits from these subsidiary operations were kept off the books when calculating Iran's royalty payments. So Iran was not just being underpaid, it was being systematically cheated by a company that used Iranian wealth to build an empire and then hid the profits from its host country.
By the late 1940s, the arrangement had become intolerable. Across the Middle East, nationalist movements were challenging the old colonial order. In Saudi Arabia, the Arabian-American Oil Company, known as AMC, had agreed to a 5050 profit sharing deal with the Saudi government in late 1950. This was a landmark moment. If the Americans were willing to split profits equally with the Saudis, why should Iran accept 16% from the British? The comparison was humiliating and it lit a fire under Iranian politics.
Enter Muhammad Mossad. Born in 1882 into a prominent aristocratic family. Mossade was educated in Europe, earning a doctorate in law from the University of Nushatell in Switzerland. He was a career politician, a constitutional nationalist, and by all accounts an eccentric and theatrical figure. He was known for weeping during speeches, for receiving foreign dignitaries while lying in bed in his pajamas, and for fainting during parliamentary sessions. Whether from genuine emotion or calculated drama, no one was ever quite sure. But behind the theatrics was a razor-sharp legal mind and an unshakable conviction that Iran's resources belong to the Iranian people.
Mosed had been railing against foreign exploitation of Iranian oil for decades. In 1944, he returned to parliament and began organizing what would become the National Front, a coalition of democratic, liberal, secular, socialist, and Islamic factions united by a single demand, the nationalization of Iran's oil industry. The movement gained momentum through the late 1940s as frustration with the Anglo Iranian oil company reached a boiling point.
The tipping point came on March 7th, 1951 when Prime Minister Ali Razar, who opposed nationalization, was assassinated by a member of a radical Islamic group called the Fatay Yan Islam. Razar had argued that Iran lacked the technical expertise to run its own oil industry. His murder shocked the political establishment, but it also removed the last major obstacle to nationalization. 8 days later, on March 15th, the Iranian parliament, the Majis, voted unanimously to nationalize the oil industry. Every single member voted in favor. Not one dissented.
On April the 28th, 1951, the sha confirmed Mosed as prime minister after the Majulius elected him by a vote of 79 to 12. Within days, Mosadic signed the nationalization law into effect. The Anglo Iranian Oil Company was to be dissolved and replaced by the National Iranian Oil Company. Iran's oil would finally belong to Iran.
The reaction from London was immediate and furious. The British viewed nationalization not as a legitimate assertion of sovereignty, but as theft. Even as late as the early 1950s, some senior British officials genuinely believed that Persian petroleum was actually and rightly British petroleum because it had been discovered by the British, developed by British capital, and exploited through British ingenuity. This was the mindset of an empire that still could not accept that the colonial era was ending.
Britain's response was a three-pronged strategy designed to either force Mosedc into surrendering or to destroy him entirely. The first prong was economic warfare. Britain imposed a crushing embargo on Iranian oil. The Royal Navy deployed warships to the Persian Gulf to enforce a blockade, and Britain threatened legal action against any country or company that dared to purchase Iranian oil. The seven largest western oil companies, known as the seven sisters, cooperated with the embargo, refusing to buy or transport Iranian crude. To compensate for the loss of Iranian supply, they simply ramped up production in Saudi Arabia, Kuwait, and Iraq. Oil production across the Middle East actually increased by about 10% annually during 1951, 52, and 53.
Even as Iranian output collapsed, the numbers tell the story of devastation. Iranian oil production plummeted from 242 million barrels in 1950 to just 10.6 million barrels in 1952, a drop of over 96%. Iran's economy, heavily dependent on oil revenue, was strangled. The Abaden refinery, which at the time was one of the largest oil refineries on Earth, was shut down. British technicians were withdrawn, and without their expertise, Iran struggled to maintain operations.
The second prong was diplomatic pressure. Britain took the case to the International Court of Justice and the United Nations Security Council. Msade personally traveled to the Hague and to New York to argue Iran's case, and he did so brilliantly. At the UN Security Council in October of 1951, he delivered a speech that captured the attention of the world. He declared that the petroleum industry had contributed nothing to the well-being of the people or to the technological progress or industrial development of his country. The International Court of Justice ultimately declined to intervene, ruling that it lacked jurisdiction. This was in effect a legal victory for Iran, but it did nothing to relieve the economic pressure.
The third prong, and the most insidious, was covert action. From the very beginning, the British government was quietly exploring ways to remove MSADA from power. MI6, Britain's Foreign Intelligence Service, began laying the groundwork for what it called Operation Boot. They recruited agents, cultivated contacts within the Iranian military, and began building a network of assets that could be activated when the time came. But Britain had a problem. It could not pull off a coup alone. Its influence in Iran had been severely damaged by decades of exploitation, and Mossad had expelled British diplomats from Tehran in October of 1952 after discovering that the British embassy was being used as a base for intelligence operations. Britain needed a partner, and it turned to the United States.
At first, the Americans were not interested. President Harry Truman and his Secretary of State Dean Axon sympathized with Iranian nationalism. Truman pushed Britain to negotiate with Mosadic and rejected British arguments for intervention. American officials were frustrated with what they saw as British arrogance and an inability to recognize that the age of colonial exploitation was over. Truman even sent envoys to Thyron to try to broker a compromise, but the British refused to make meaningful concessions.
Everything changed in January of 1953 when Dwight D. Eisenhower took office. Eisenhower brought with him a new team that was far more receptive to the idea of covert action. His secretary of state was John Foster Dulles, a corporate lawyer with deep ties to Wall Street and the oil industry. His brother, Alan Dulles, was the director of the CIA. The Dulles brothers viewed the world through an unforgiving cold war lens. They saw communists lurking behind every nationalist movement.
The British played this angle masterfully. They knew the Americans were not going to overthrow a government to protect British oil profits, but they knew the Americans might overthrow a government to prevent it from falling to the Soviets. So the British reframed the entire issue. They stopped talking about oil and started talking about communism. They painted Mosed as a dangerous radical who was leading Iran towards Soviet domination. They pointed to the two-day party, Iran's communist party, which had a significant following and argued that if Mosadic stayed in power, Iran would inevitably fall into the Soviet orbit. This was by any honest assessment a fabrication. Mosadic was an ardent anti-communist. He had no love for Moscow. The CRA's own analysts knew this. A 1952 CIA study titled Probable Developments in Iran concluded that a two-day coup was not imminent. A follow-up report in 1953 reached nearly identical conclusions. But the Dulles brothers were not interested in nuance. They wanted action.
By early April of 1953, Alan Dulles had approved $1 million to be used by the Tehran station in any way that would bring about the fall of Msada. Planning meetings were held in Cypress and Beirut between CIA and MY6 officers. On July 1st, British Prime Minister Winston Churchill approved the plan. 10 days later, on July 11th, President Eisenhower gave his final consent. The operation had two code names. The British called it Operation Boot. The Americans called it TP AJ AAX or more commonly operation Ajax.
The man chosen to lead the operation on the ground was Kermit Roosevelt Jr., the grandson of President Theodore Roosevelt. Roosevelt was a career intelligence officer, a Harvard graduate, and by all accounts, a quiet, unassuming man who looked nothing like the Hollywood image of a spy. A colleague once described him as the last person you would expect to be up to his neck and dirty tricks. But behind the wire rimmed glasses and the courteous demeanor was a man willing to overthrow a democracy to achieve his mission.
On July 19th, 1953, Roosevelt crossed into Iran under a false identity. He carried a briefcase, a significant amount of cash, and a detailed plan to destroy a government. The operation had several components, each designed to work in concert to destabilize Mosadic and create the conditions for a military takeover.
First, there was the propaganda campaign. CIA operatives had been planting stories in Iranian newspapers for weeks, portraying Mosadic as a communist sympathizer, an enemy of Islam, and a threat to the monarchy. Fake editorials were written in English, translated into Persian, and placed in Iranian newspapers as if they were the opinions of local journalists. The narrative was carefully designed to exploit fears already present in Iranian society. Religious conservatives were told Mosadic planned to suppress Islamic institutions. Monarchists were told he was planning to abolish the Sha's throne. Moderates were told he was driving the country toward chaos.
Second, there was the bribery. CIA money flowed to politicians, military officers, newspaper editors, Mullers, and street gang leaders. Alan Delles's planning documents stated that the operation would pay journalists, Mullers, and politicians to attack Mossades as corrupt and power- hungry. At the same time, paid street gangs would be directed to attack public figures, increasing instability and creating the impression that Mossade had lost control of the country.
Third, there was the critical task of securing the Sha's cooperation. Under Iran's constitutional framework, the Sha retained the power to dismiss the prime minister. The plotters needed the Sha to sign royal decrees dismissing Mosadic and appointing General Fazola Zahedi, a pro-western military officer, as his replacement. This would give the coup a veneer of legality, transforming what was actually a foreign backed push into what could be presented as a legitimate exercise of royal authority.
But the Shaw was terrified. He was a weak and indecisive man who feared the consequences if the coup failed. Roosevelt met with the Shaw secretly and applied enormous pressure, assuring him that both the United States and Britain fully backed the operation and that key military units had already pledged their loyalty to Zahedi. The CIA even sent Princess Ashraf, the Shaw's own twin sister, back to Tehran to persuade her brother, though she was reportedly unenthusiastic about the mission. General Norman Schwarzkoff senior, the father of the Gulf War commander, was also dispatched to help convince the wavering monarch.
Finally, on August 13th, the Sha signed two decrees. One dismissed Mosadic as prime minister. The other appointed Zahedi in his place. The documents were handed to Colonel Nematah Naseri, the commander of the Imperial Guard, who was tasked with delivering them to Mosadic and arresting him.
The first attempt took place on the night of August 15th. It was a disaster. Mosadic had been tipped off, likely by members of the Tudday party whose cells had infiltrated the military. When Assyria arrived at Mosadig's residence with the dismissal decree, he was arrested by forces loyal to the prime minister. Other key conspirators were rounded up. The plan had collapsed before it even began.
When news of the failed coup spread, the Sha panicked and fled the country, first to Baghdad and then to Rome. He was convinced his reign was over. In Washington, CIA headquarters sent a cable ordering Roosevelt to abort the mission and leave Iran. The operation appeared to be finished, but Roosevelt refused to quit. According to declassified documents, when he received the cable ordering him to stand down, he simply ignored it. There was at least one person in the room when Roosevelt got the message. His response was blunt. He said, "No, we are not done here." Whether MI6 deliberately interfered with the transmission of the abort order, as some sources have alleged, remains unclear. What is certain is that Roosevelt decided on his own authority to push forward with a second attempt.
Over the next three days, Roosevelt worked frantically to reorganize the operation. He used bribery and according to some accounts, death threats to get his Iranian agents back in line. CIA money may have even reached Ayatollah Kashani, a former Mosadic ally and the speaker of the parliament, helping to turn him against the prime minister. Meanwhile, Mosadic made a critical error. Believing the coup had been defeated, he ordered his supporters to go home and return to their normal lives. He asked the Tuda party members who had been patrolling the streets to stand down as well. This cleared the way for what came next.
On the morning of August 19th, 1953, crowds began flooding the streets of Tehran. Many of them were paid demonstrators recruit recruited from athletic clubs in the impoverished neighborhoods of South Tan with CIA cash. They marched through the city, waving portraits of the Shaw and shouting pro- monarchy slogans. Simultaneously, military units loyal to the plot seized key installations, including the telegraph office and radio stations. Armored vehicles rolled through the streets. By mid-afternoon, the tide had turned completely. Tanks surrounded Mosed's residence and opened fire. The prime minister's home was shelled. Fighting raged across Tehran for hours. By evening, an estimated 200 to 300 people lay dead in the streets. Mossadic managed to escape over a garden wall, but surrendered the following day. The coup had succeeded. Iran's experiment with democracy was over.
General Zahedi was installed as prime minister. The Sha was flown back from Rome, arriving to a carefully orchestrated hero's welcome when he met Kermit Roosevelt. The Shaw reportedly told him, "I owe my throne to God, my people, my army, to you." Roosevelt later noted that by you, the Shaw meant both him personally and the two governments he represented.
The consequences were immediate and farreaching. Mosadig was arrested, put on trial, and originally sentenced to death. The Shaw personally intervened to commute the sentence to three years in solitary confinement in a military prison followed by house arrest for the rest of his life. He died in 1967 at the age of 84, still under house arrest, never having regained his freedom.
Now came the real purpose of the entire operation, the redistribution of Iran's oil. In 1954, under heavy pressure from Washington and London, the Shaw signed what became known as the consortium agreement. The arrangement was presented as a compromise, but in reality it was a carve up. British Petroleum, the successor to the Anglo-Iranian oil company, retained 40% of the shares. Five American oil companies received another 40%, a reward for America's role in the coup. Royal Dutch Shell got 14%. A French company took the remaining 6%. Iran was allowed to keep nominal ownership of the national Iranian oil company, but the consortium controlled production levels, pricing, and access to markets. In other words, the oil that Mosed had nationalized for the benefit of the Iranian people was handed right back to the same Western corporations. Except now the Americans had a seat at the table, too. The only thing that had changed was who was getting a share of the plunder.
The Shaw, now firmly in power and dependent on American support, moved swiftly to consolidate his rule. In 1957, with direct assistance from the CIA and Israeli intelligence, he established SAVVAK, a secret police force that would become one of the most feared and hated institutions in the Middle East. SAVVAK had virtually unlimited powers. It censored the media, screened government employees, hunted dissident, and became notorious for systematic torture and the execution of political prisoners. The organization's name became synonymous with state terror. All political opposition was crushed. The National Front was suppressed. Labor unions were dismantled. Universities were placed under surveillance. Iran became what one CIA historian later described as an absolutist kingship. A transformation from the turbulent but functioning constitutional monarchy that had existed under Mosadic. The democratic space that Iranians had fought for over decades was simply erased.
And yet, from the perspective of Washington and London, the coup was considered a spectacular success. Oil was flowing again. Iran was firmly aligned with the West. Communism appeared to be contained. The Eisenhower administration was so pleased that it began viewing covert action as a cheap and efficient tool of foreign policy. Just one year after Operation Ajax, the CIA used the same playbook to overthrow the democratically elected government of Jacobo Arbans in Guatemala, a coup designed to protect the interests of the United Fruit Company. The pattern was set from Guatemala to the Congo, from Chile to Indonesia. The template forged in Thran in 1953 would be replicated again and again across the developing world.
But in Iran itself, the wounds never healed. The memory of the coup festered beneath the surface of Iranian society for a quarter century, growing more toxic with every year of the Shaw's increasingly authoritarian rule. The Shaw spent lavishly on modernization projects and military hardware. But the wealth flowed upward while millions of ordinary Iranians remained in poverty, the gap between the western oriented elite and the a traditional society widened into a chasm.
In an ironic twist, when the Shaw attempted during the 1970s to assert more control over oil pricing through OPEC and refused to renew the consortium agreement upon its expiration, Western support for his regime quietly evaporated. The very same oil independence that Mosed had sought decades earlier, the Sha was now pursuing and the response from Washington was remarkably similar: a withdrawal of the political backing that had kept him in power.
Oil revenues had made the Sha feel invincible. He launched grandiose modernization programs, the so-called white revolution, building highways, dams, universities, and factories. But the wealth was concentrated at the top. Corruption was rampant. The traditional bizaar merchants who had been the backbone of Iranian commerce for centuries were squeezed out by westernstyle malls and imported goods. Rural communities were uprooted by land reform programs that looked progressive on paper but devastated the agricultural economy in practice. And through it all, SA Vak watched everything. Neighbors reported on neighbors. Students disappeared from university campuses. Writers and intellectuals were hauled in for interrogation. Iran became a pressure cooker with no release valve. And the heat was rising every year.
By the late 1970s, the pressure had become unbearable. A coalition of secular intellectuals, leftist activists, religious conservatives, and disaffected middle-class citizens united against the Sha. The revolution that erupted in 1978 and culminated in 1979 was fueled by many grievances, economic inequality, political repression, cultural alienation, but at its core was a burning resentment of foreign interference that trace directly back to 1953.
When Ayatollah Kmeni's followers stormed the American embassy in Thran in November of 1979 and took 52 hostages, they did not site abstract ideology alone. They cited 1953. The embassy had served as a base of operations for the coup. The revolutionaries feared with considerable justification that it might be used for the same purpose again. The 444day hostage crisis shattered US Iran relations and created a cycle of hostility and mistrust that continues to this day.
Iran's supreme leader Ayatollah Kam the man who succeeded Kmeni once justified the regime's uncompromising posture by drawing a direct line to the coup. He said, "We are not liberals like Alende and Mosade, whom the CIA can snuff out." The message was clear. The Islamic Republic defined itself in part as a fortress against exactly the kind of foreign intervention that had destroyed Mossad's government.
It took decades for the United States to publicly reckon with what it had done. In the year 2000, Secretary of State Maline Albbright acknowledged the American role in the coup, calling previous US policy toward Iran regrettably shortsighted. In 2009, President Obama in his Cairo speech went further, acknowledging that the United States played a role in the overthrow of a democratically elected Iranian government. In 2013, the CIA formally declassified documents confirming its central role in the operation. And in 2023, on the 70th anniversary of the coup, the agency went even further, publicly acknowledging that the operation was undemocratic.
But for many Iranians, these acknowledgements came far too late. The damage was done decades ago, and the consequences continue to ripple outward. The nuclear standoff, the proxy wars across the Middle East, the mutual hostility between Washington and Thran, all of it can be traced in part to those few days in August of 1953 when two Western governments decided that a country's democratically expressed will was less important than their access to its oil.
There is a quote attributed to Mosad that captures the tragedy of this entire story with devastating simplicity. He said, "My greatest sin is that I nationalized Iran's oil industry and discarded the system of political and economic exploitation by the world's greatest empire." Think about that. A man nationalized his own country's resources through a unanimous vote in parliament, a perfectly legal act of sovereignty. And for that, he was overthrown, imprisoned, and erased from history by the very nations that claimed to champion democracy.
The story of Iran in 1953 is not just a historical curiosity. It is a case study in how power really operates when money and resources are at stake. It is a reminder that the language of freedom and democracy is often used as a disguise for something far more cynical. And it is a warning that the consequences of such actions do not stay buried. They grow. They mutate. They come back in forms that the original architects never imagined and cannot control.
The CIA's own staff historian, David Roarge, summarized it best. He wrote that the agency carried out a successful regime change operation, but it also transformed a turbulent constitutional monarchy into an absolutist kingship and induced a succession of unintended consequences. The most impactful of those unintended consequences was the 1979 Iranian revolution.
So the next time you hear about tensions between the West and Iran, about sanctions and nuclear deals and drone strikes and proxy wars, remember where it all started. Remember a quiet, bespectical spy named Kermit Roosevelt who crossed into Tehran with a briefcase full of cash? Remember a prime minister in pajamas who believed his country's oil belonged to his people? And remember that the decisions made in secret rooms in Washington and London more than 70 years ago are still shaping the world we live in today.
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