On this day August 19, 1953
The government of Iranian Prime Minister Mohammed Mosaddeq was overthrown in a coup d’état and was replaced by Fazlollah Zahedi.
Several years earlier, Mossaddeq, backed by his nationalist supporters in the Iranian parliament, had angered Britain with his argument that Iran should begin profiting from its vast oil reserves instead of allowing profits to continue to flow to Britain through its control of Iran’s oil industry.
In 1951, Mossaddeq nationalised Iran’s oil industry which had been controlled exclusively by the British government-controlled Anglo-Iranian Oil Company, the UK’s largest single investment overseas. The ejection of Western oil companies from their Iranian refineries triggered the Abadan Crisis and nearly caused a war.
Britain accused Mosaddeq of violating the legal rights of the Anglo-Iranian Oil Company and mobilized a worldwide boycott of Iran’s oil that plunged Iran into financial crisis. The British government tried to enlist the United States in planning a coup, but President Harry S. Truman refused.
However, his successor Dwight D. Eisenhower allowed the CIA to embark on its first covert operation against a foreign government. The British and U.S. spy agencies, in what the CIA called Operation Ajax, replaced the government of the popular Prime Minister Mosaddeq with an all-powerful monarch, Mohammed Reza Pahlevi who ruled for the next 26 years until he was overthrown in 1979.
The economic and political crisis in Iran that began in early 1952 with the British-organized worldwide boycott of Iranian oil, ended with the signing of the Consortium Agreement of 1954. Pahlevi signed the agreement with the result that, for the first time, United States oil companies shared in the profits of Iranian oil, with the U.S. and UK evenly splitting 80% and the remainder divided between French and Dutch interests.
From Iran’s perspective, the Consortium Agreement of 1954 was far less favorable than conditions set forth several months earlier in the joint ‘Winston Churchill-Dwight D. Eisenhower’ proposal to Mosaddegh. The Consortium Agreement of 1954 ended the crisis that led to the coup, and stayed in effect until it was modified in 1973 and then ended in 1979 when the Iranian Revolution deposed the monarch. For the 25 years it was in effect, the 1954 Consortium Agreement had determined which oil companies controlled Iranian oil and profited from it.
US support and funding continued after the coup, with the CIA training the Shah’s feared and hated secret police, SAVAK. Originally, the Eisenhower Administration considered Operation Ajax a successful secret war, but, given its blowback, it is now considered a failure, because of its “haunting and terrible legacy”.
The anti-democratic coup d’état was a “a critical event in post-war world history” that replaced Iran’s post-monarchic, native, and secular parliamentary democracy with a dictatorship. The coup is widely believed to have significantly contributed to the 1979 Iranian Revolution, which deposed the Shah and replaced the pro-Western monarchy with the anti-Western Islamic Republic of Iran.