MESA Banner
The United States and the Dual Integration of Oil in Iran, 1945-1964
Abstract
This paper examines how the United States encouraged development in Iran after World War II, working with technocrats in the Pahlavi regime and the shah to foster socio-economic reform inside Iran. Simultaneously, the oil of Iran was integrated into an international energy system by Western oil companies, thus providing the Pahlavi regime with the revenues it would need to fund its development programs, the First and Second Seven Year Plans. For the United States, the goal of oil-based development was to "cure" what they perceived to be the country's chronic instability and forestall its slide towards communism. This represented the bridging of global and local, through a process of "dual integration." Before 1951, the U.S. supported the Iranian development effort and the global integration of oil from a distance, relying on private third-party actors, including the British oil company AIOC, to accomplish its strategic goals. Following the nationalist challenge by prime minister Mohammed Mossadegh, who refused to abide by the companies' conditions for global integration and embarked upon an "oil-less" development strategy, the U.S. engineered a coup d'etat in 1953 in Iran that was meant to return Iran's oil to world markets, thereby permitting the flow of oil revenues to resume and new oil-driven development projects to continue. After 1954, the U.S. provided grant aid, facilitated loans for the Pahlavi regime's Second Seven Year Plan, and cooperated with non-governmental NGOs to aid Iran's progress. Oil-based development assisted by American experts failed to achieve the desired results, however, and by 1962 the instability in Iran seemed as bad as it had been in the Musaddiq era. In the 1960s, U.S. direct support for Iran's oil-driven development underwent a transition: the shah was allowed to take full control over development through his White Revolution land reform campaign, and American NGOs were effectively forced out. At the same time, the shah's cooperation with the oil companies and Iran's successful sabotage of OPEC's first challenge to the companies guaranteed a stable source of oil revenues, upon which the shah could rely for the remainder of his reign. This paper illustrates how oil, development, and U.S. support for Iran's government changed over the course of the 1945-1964 period, resulting in the oil-based technocratic authoritarianism of the Pahlavi shah, and setting the stage for the imbalances and rentierism that would precipitate the fall of the shah amidst the Islamic Revolution of 1978-1979.
Discipline
History
Geographic Area
Iran
Sub Area
None