How Iran’s geopolitical fate and regimes in the last century were decided by APOC, currently known as British Petroleum

On 21st June, Donald Trump announced that the United States had carried out attacks on three nuclear sites in Iran amid the ongoing conflict with Israel. The strikes, for many, are not just a military escalation; they represent a return to a century-old pattern of Western intervention, resource control, and regime destabilisation in Iran.

From the 1901 D’Arcy oil concession to the 1953 MI6-CIA coup that overthrew Mossadegh, and the British-fuelled rise of the Shah, Iran’s modern history has been repeatedly shaped by foreign powers seeking control over its strategic assets, primarily oil and gas. Today, as Iran faces renewed pressure over its nuclear programme, the echoes of that legacy remain unmistakable and unresolved.

Origins of APOC in Iran and the D’Arcy oil concession (1901–1909)

In the early 1900s, the British took hold of Iran’s vast oil wealth under astonishingly one-sided terms, all thanks to a British speculator, William Knox D’Arcy. In 1901, he secured a 60-year petroleum concession from Persia’s Qajar monarch. The exclusive rights were granted to explore and extract oil across most of Iran. To get such access, Iranian officials were bribed to negotiate the deal.

The concession allowed D’Arcy to keep ownership of any oil he found, and Iran got only a 16% share of the profits. Notably, the Iranian government was not even allowed to inspect the accounts. In 1908, D’Arcy finally found oil at Masjed Soleiman, and it turned out to be one of the world’s largest deposits. In 1909, a syndicate of British investors formed the Anglo-Persian Oil Company (APOC) to exploit what became known as the D’Arcy concession. APOC became the sole owner of the vast reserves of oil located underneath Iran’s soil. The deal that was done in 1901 did not allow anyone else to drill, refine or sell Iranian oil other than APOC.

Britain secures control of Persian oil (Churchill’s 1914 deal)

By 1914, the Royal Navy had shifted from coal-powered ships to oil. Furthermore, the British government was fully aware of the strategic importance of Persian oil by then. It was essential for them to take full control of Iranian oil. On the eve of World War I, the First Lord of the Admiralty, Winston Churchill, pushed the government to purchase a 51% stake in APOC. The deal effectively nationalised the company under British control.

Churchill called the Iranian oil bonanza “a prize from fairyland beyond our wildest dreams”. With backing from the British government, APOC built the world’s largest oil refinery at Abadan on the Persian Gulf and expanded production severalfold. By the 1920s and 1930s, Iranian oil had become the backbone of Britain’s industrial economy and global military power.

British factories, ships, and motor vehicles were running on cheap Iranian oil, pushing Britain’s economy to new levels, and yet, Iran itself hardly saw any benefit. APOC’s royalty payments to Iran were considerably low. For example, Iran was paid merely £47,000 in 1920 while the company made millions in profits. The British were good at cheating on profit calculations and because Iran could not independently audit the books, they had to believe what the British told them.

The imbalance allowed Britons to enjoy a rising standard of living while Iranians remained in poverty. Oil workers at Abadan were paid just a few shillings a day and lived in squalid shanty towns with no running water or electricity.

Colonial influence and the rise of the Pahlavi dynasty (1919–1941)

Britain’s stronghold on Iran’s oil was not the only issue at that time. Britain was consistently meddling in the internal politics of Iran. The Qajar monarchs had been selling off Iran’s patrimony to foreigners for decades, leading to anger among the public. In 1919, after World War I, London tried to formalise its dominance through the proposed Anglo-Persian Agreement. If it had been signed, it would have given Britain control of Iran’s army, treasury, transport and communications, effectively making Iran a British colony. However, the proposal faced backlash from the nationalists.

Iranians had already forced the Qajars to accept a constitution in 1906, and now the nationalist Iranians were against the corrupt monarch who was perceived as one who bartered away the region’s sovereignty. In 1925, Iran’s parliament (Majlis) deposed the last Qajar Shah and transferred the throne to Reza Shah Pahlavi, who was a military officer. Reza promised order and an end to foreign humiliation.

He established a strong central government. Although he was an autocrat who brooked no dissent or free press, he did seek to revise Iran’s oil deal with APOC. In 1928, he demanded fairer terms from APOC, stating that Iranian oil increased British wealth while Iranians remained poor.

APOC dragged its feet for four years. In 1933, after Reza threatened to cancel the D’Arcy concession, APOC finally agreed to pay a minimum royalty and cede a bit more territory. The company was rebranded as the Anglo-Iranian Oil Company (AIOC) to placate the Shah’s dislike of the old name “Persian”. Despite the new deal, the influence of Britain remained strong.

During the 1930s, Germany showed sympathy to Iran and Reza continued to revolt against the British, which alarmed London. During World War II, Britain feared Iran might slip from its stronghold. In 1941, British and Soviet forces jointly invaded Iran, forcing Reza to abdicate. He was exiled and replaced with his pliant 21-year-old son, Mohammad Reza Pahlavi. The British orchestrated regime change, securing a friendly monarch in the middle of the war. However, removing Reza Shah had consequences of its own. Iran’s pro-democracy movement flared up and the demand for a truly independent nation without any involvement of foreign powers grew louder.

Nationalisation and Mossadegh’s challenge to British oil (1940s–1951)

After WWII, an anti-colonial wave was at its peak throughout the developing world. In Iran, nationalists increasingly focused on a single goal, reclaiming the oil from the British. AIOC was being seen as an “imperium in imperio” in Iran, which means an empire within an empire. The public no longer wanted Britain to dominate Iran’s economy while its profits flowed to London.

By 1950, AIOC’s oil revenues far outstripped Iran’s own state revenues, making it clear that Iranians were facing injustice. Popular outrage mounted at how Britain’s AIOC controlled Iran’s main source of income and kept Iran impoverished. Even the then ambassador of Britain in Tehran, Sir Francis Shepherd, acknowledged the colonial mindset at play and wrote in 1950 that “the Persians” must not be allowed to run their own oil industry, as “they cannot do it”. According to him, Iran’s role was merely to “profit from the technical ability of the West”. This condescension only hardened Iranian resolve to end British exploitation.

By the late 1940s, a broad coalition of pro-democracy liberals, secular nationalists, and leftists was formed under the leadership of Mohammad Mossadegh, who was a veteran politician known for his integrity. Public anger over AIOC’s abusive labour practices was at its peak. There was a notable strike by the oil workers at Abadan in 1946, which was crushed only after the British Navy intervened. Momentum built for Iran to nationalise its oil industry and use the wealth for its own development.

In March 1951, the movement reached its climax. The Majlis, with overwhelming public support, voted unanimously to nationalise AIOC’s assets and create the National Iranian Oil Company. Within weeks, the Shah, who had then become a figurehead, bowed to public pressure and appointed Mossadegh as Prime Minister on 28th April 1951. Iranians celebrated Mossadegh as a national hero for standing up to Britain. Time magazine called him “the Iranian George Washington” for his defence of his country’s sovereignty.

While Iranians were celebrating, London was outraged, as it had lost control of Iran’s oil. The British government and AIOC refused to accept Iran’s nationalisation of the oil industry. The British elites hated Mossadegh’s move. For them, AIOC was the most lucrative British enterprise anywhere on the planet, and they saw its expropriation as an intolerable affront to the established (colonial) order.

British officers came up with a hardline strategy – no mediation, no compromise, no acceptance of nationalisation in any form. Britain immediately took a series of aggressive steps to strangle Iran’s economy and destabilise Mossadegh’s government. AIOC withdrew all British managers and technicians from the Abadan refineries, hoping it would cripple oil production.

The Royal Navy blockaded Iran’s oil exports, and the company organised an international boycott of Iranian oil to prevent Tehran from selling it elsewhere. The sterling assets of Iran in London banks were seized, and the export of key goods to Iran, including steel and sugar, was banned. It even seized foreign vessels carrying Iranian oil. The economic warfare went on for two years, between 1951 and 1953, and devastated Iran’s finances, leading to an economic crisis.

However, Mossadegh did not bow to Britain’s pressure. He managed to keep Iran solvent through strict measures and rallied nationalist sentiments against Britain’s bullying. In the international arena, he scored a public relations victory. Mossadegh travelled to New York in late 1951 and defended Iran’s case at the United Nations, outshining Britain’s representatives. He won support from the global public, especially in emerging post-colonial nations. He argued that Iran had a right to control its own resources. Mossadegh’s victory on the international platform further angered Britain and hardened their resolve to remove him.

Initially, Britain considered military options. Then-Prime Minister Churchill was far more hawkish on Iran than his predecessor Attlee. Churchill railed against the “weak” response of the previous government and had no qualms about using covert action. British Intelligence (MI6) had long cultivated a network of agents inside Iran. It was now time to step up plans to oust Mossadegh by any means necessary. Mossadegh pre-empted one early MI6 plot by expelling all British officials and closing the UK embassy in late 1952, after discovering British spies conspiring with royalist dissidents. With another defeat on the ground, Britain turned to the one power capable of helping orchestrate Mossadegh’s downfall, the United States.

The MI6-CIA coup of 1953 (Operation Ajax)

By 1953, Britain was determined to remove Mossadegh and reclaim its dominance over Iranian oil. British officials framed the crisis in Cold War terms to win over hesitant Washington and argued that inaction could result in a communist takeover in Iran. Notably, Mossadegh was neither a communist nor Soviet-aligned. The election of US President Dwight Eisenhower presented an opportunity. His top foreign policy appointees, John Foster Dulles and Allen Dulles, were staunch anti-communists willing to collaborate with London.

The declassified files confirmed that Britain was the instigator and prime force behind the coup plan. The codename given to the operation was Operation Boot by MI6 and Operation Ajax by the CIA. MI6 and CIA coordinated closely to orchestrate the removal of Iran’s democratically elected government in August 1953.

British intelligence was not only equipped with a plan but had deep networks of local contacts and colonial-era tactics. AIOC, still majority-owned by the British state, effectively funded the entire covert operation. British agents in Tehran worked closely with their American counterparts. The objective was clear: install a regime that would “settle the oil question” on Western terms.

London and Washington agreed to restore the young Shah, Mohammad Reza Pahlavi, as an authoritarian ruler with expanded powers. General Fazlollah Zahedi, a pro-British military officer, was chosen as the new prime minister. Ironically, Zahedi had been detained by the British during WWII for his pro-Nazi leanings. Between the spring and summer of 1953, MI6 and CIA systematically bribed Iranian officials, military commanders, newspaper editors, and underworld figures to turn against Mossadegh.

There were ample funds, thanks to the profits made by AIOC. They paid off members of parliament, senior clergy, and street gangs to fuel the plot. They also exploited social divisions as one of the key parts of the strategy. They saw a potential ally in Ayatollah Seyyed Abol-Ghasem Kashani, once a Mossadegh supporter, who now commanded a strong base among traditional merchants and devout masses.

In February 1953, a mob of Islamist militants funded by Kashani and British agents stormed Tehran and attacked Mossadegh’s residence, calling for his execution. At the same time, MI6 orchestrated false-flag operations. The provocateurs paid by the British posed as Communist Tudeh Party members and attacked mosques and clerics to discredit Mossadegh. Later, a CIA agent admitted that the British had “sent the people we had under our control into the streets to act as if they were Tudeh. They threw rocks at mosques and priests”.

There was an attempted coup in early August 1953, but it failed. A second coup was orchestrated on 19th August 1953, which succeeded. Pro-Shah military units bribed by MI6 and CIA entered Tehran. British and American-financed mobs clashed violently with Mossadegh supporters. The Shah, who had briefly fled, returned and formally dismissed Mossadegh. The Prime Minister’s residence was stormed, and he was arrested, effectively ending Iran’s democratic experiment.

Churchill hailed the outcome. Mossadegh was imprisoned. General Zahedi became Prime Minister. However, the real power rested with the Shah. He dismantled checks on his authority and signed a new oil deal. In 1954, a Western consortium gave AIOC, which later became British Petroleum (BP), a 40% share in Iranian oil. American firms received another 40%. The rest of the profits went to the European partners.

In Iran, the coup was widely seen as a betrayal of sovereignty by imperial powers. Though Britain won control in the short term, the 1953 coup planted the seeds of anti-Western resentment that would ultimately bring down the Shah himself.

The Shah’s authoritarian rule and growing anti-Western sentiment (1953–1970s)

Following Mossadegh’s removal, Britain and the US secured a loyal regime in Tehran that protected their oil interests. For the next 25 years, the Shah ruled as an autocrat closely aligned with London and Washington. He received unwavering Anglo-American military and political support, including arms, advisors, and intelligence. In return, all he had to do was to keep Iranian oil flowing West and resist Soviet influence. British diplomats saw him as a compliant “asset” who would serve their agenda.

However, inside Iran, his rule grew increasingly repressive. His secret police, SAVAK, backed by Western intelligence, jailed, tortured, and executed opponents, including nationalists, leftists, and intellectuals alike. Political opposition was outlawed. While oil enriched the elite, ordinary Iranians remained poor. To many, BP and other foreign firms appeared to be continuing colonial-era exploitation under new names.

The Islamist clergy, who were once allies of Britain, emerged as the fiercest critics of the Shah’s regime. In 1963, Ayatollah Ruhollah Khomeini was arrested after denouncing the Shah’s pro-Western policies. Though once opposed to Mossadegh’s secular nationalism, Khomeini now became a leading voice against foreign domination. By the 1970s, opposition had united Iranians from all walks of life, including secular students, merchants, democrats, and conservatives, against the Shah’s authoritarianism and Western backing.

The support from Britain and America for the regime deepened the suspicions. “The British hand” became a shorthand for foreign manipulation. The legacy of 1953 and decades of oil plunder became rallying cries. By 1978, mass protests erupted. Demonstrators carried portraits of Mossadegh, calling him the symbol of lost sovereignty. The message was clear: Iran once had a path to democracy, until Britain and the US crushed it. Now, a new generation wanted reclaim it.

Iranian revolution – the fall of the Shah and the 1979 anti-Western backlash

The Iranian Revolution reached its climax in January 1979. The Shah, seeing no way to quell the tidal wave of protests, fled the country. The monarchy collapsed in his absence. Ruhollah Khomeini stepped in to fill the void and was welcomed as a hero. Khomeini had become the unifying figurehead of the revolution. Islamists and a broad spectrum of Iranians who were fed up with tyranny and foreign dominance were impressed by Khomeini.

This was the time when Khomeini’s hardline Islamist supporters quickly sidelined moderate and secular elements, including those who had been close to Mossadegh’s camp. It was a crucial moment, as the revolution’s ideological atmosphere was intensely anti-Western, and specifically anti-British and anti-American. Decades of resentment towards the Anglo-American role in propping up the Shah fuelled the rhetoric of the new regime. Khomeini denounced the United States as the “Great Satan” and Britain as an insidious culprit in Iran’s suffering. The US is still being called the “Great Satan” by Iranian leaders.

One of the revolutionaries’ first dramatic acts was directly inspired by the memory of 1953. In November 1979, radical students stormed the US Embassy in Tehran and took 52 Americans hostage. They declared that they were pre-empting another “CIA coup” like the one that had occurred 26 years earlier on the very spot.

Khomeini’s supporters justified the embassy takeover by pointing to 1953’s Operation Ajax, which had been planned in the US Embassy with British collusion. This hostage crisis continued for 444 days, leading to a complete break in US–Iranian relations. It also marked the point at which Iran’s Islamic revolutionaries firmly consolidated power and crushed liberal moderates.

Khomeini established an Islamic Republic that was completely hostile to the West and to any hint of outside interference. British diplomats were expelled or left of their own accord. The new regime saw the UK as equally complicit in past crimes. The long shadow of AIOC and the 1953 coup thus hung over the revolution. The Islamists gained power on a wave of popular anger at exactly the kind of foreign domination that British Petroleum had come to symbolise in Iran.

There is a famous Iranian revolutionary slogan that says “Na sharq, na gharb – Faqat Jumhuri-e Islami” (Neither East nor West – only Islamic Republic). It encapsulated Iran’s desire to be free of both Soviet and Western influence.

Legacy of British intervention – a century of mistrust and conflict

A century after William D’Arcy’s oil deal, Iran’s relations with Britain and the West remain marked by a deep history of exploitation and betrayal and distrust. The 1979 revolution was not an endpoint but the beginning of a more assertive, ideologically driven resistance. In today’s time, Iran’s clerical regime still frames its policies as a defence of sovereignty against Western imperialism, while drawing inspiration directly from the memory of the 1953 coup and the oil nationalisation struggle.

Ali Khamenei, Supreme Leader of Iran, regularly cites Mossadegh’s ouster as a warning and equates Iran’s nuclear ambitions with the earlier battle to reclaim oil. Iran views both as essential to preserving its independence. This narrative resonates across Iranian society, where schoolbooks recount Britain’s monopoly over oil and its role in crushing the country’s economy.

For the West, especially Britain and the US, the long-term consequences of 1953 have been deeply damaging. By destroying Iran’s elected government and reinstating the Shah’s dictatorship, they helped create the very revolution they later feared. The Islamic Republic, far more anti-Western than Mossadegh ever was, has resisted foreign influence and pursued policies that challenge Western interests, especially in the Middle East.

The nuclear dispute is a direct extension of this mistrust. Tehran sees Western demands as modern-day colonialism; Britain, the US, and Israel view Iran’s nuclear ambitions as a threat shaped by its revolutionary hostility. The result is an impasse that has persisted for decades.

Conclusion

For nearly a century, Iran’s destiny was shaped by British oil interests, beginning with the 1901 concession to the Anglo-Persian Oil Company, now BP. From World Wars to the 1953 coup that overthrew Prime Minister Mossadegh, British-backed interventions secured control of Iranian oil, often through compliant monarchs and covert operations. But these actions sowed the seeds of nationalist and Islamist backlash.

The 1979 Islamic Revolution, fuelled by memories of British and Western betrayal, ousted the Shah and brought to power a regime hostile to the West. Today’s tensions, with Israel, the US, and over nuclear ambitions, stem from this legacy. Iran’s leaders still invoke Mossadegh’s defiance, rejecting Western pressure in favour of sovereignty. For Iran, Britain remains a symbol of colonial manipulation. The legacy of APOC endures in Iran’s deep mistrust of the West, continuing to shape regional politics through a lens of historical grievance and resistance.

News