This paper is an analysis of the ebbs and flows of the social and political agency of oil workers since 1977. In the course of the Iranian revolution mass labour strikes in the petroleum industry played a decisive role in the eventual collapse of the monarchy. The subsequent expulsion of the multinational oil companies and the full nationalization of the petroleum industry under the fledgling and often-contentious control of workers councils and a new political regime set a new precedent among oil producing countries. The paper investigates the important questions of why this new found workers’ political agency was lost, how autonomous and coherent were the workers’ demands and their sense of collective cohesion to begin with, and what kind of organization and political-administration of the labour process replaced the workers’ councils after the revolution. By analyzing the histories of labour in the Iranian petroleum sector since the 1979 revolution this paper will investigate the dynamics of social class relations in post revolution Iran, and explore the state-society relations as a contentious and over determined process. The paper will also challenge the prevailing rentier-state theories which negate the social and political role of oil workers and technical experts and staff, by focusing exclusively on oil as a source of revenue rather than a complex set of social and political relations. To investigate the dynamics of labour relations in the Iranian oil industry this paper will analyze three important and interlinked events and processes: First, the geographic and ideological impact of the Iran-Iraq war is analyzed as a key turning point when the oil and port cities of Abadan and Khorramshahr were physically destroyed and their population involuntarily dispersed. Second, the authors will analyze the administrative restructuring of the oil industry in post-Iran-Iraq war era when economic efficiency, the rule of technical experts, and the primacy of the accumulation of capital framed the restructuring of labour relations. Third, the impact of this post-war restructuring on the casualization of labour force and the systematic dismantling of autonomous labour representation and organizations will be investigated.