The Soviet-Iranian Oil Agreement Crisis of 1946-1947

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Introduction

Relevance. Soviet expansionist ambitions in Iran date back to before 1946, due to the country’s strategic location and diverse economic resources, particularly oil. After the end of World War II, Iran’s importance increased with the discovery of large quantities of oil, making it a focal point of interest for the major powers. The Soviet government sought to expand its influence in northern Iran and utilize its oil resources, which was reflected in text of the Iranian-Soviet Oil Agreement (1946–1947), proposing to grant the Soviets the right to explore oil in the north in exchange for the withdrawal of their military forces. Forming the core of the research, this agreement represents a pivotal point for understanding how Soviet expansionist ambitions were translated into practical policies and their impact on Iranian sovereignty.

Elaboration of the problem. During the visit of the Iranian Prime Minister, Qavam al-Saltaneh, to the Soviet Union in March 1946, an agreement was reached on a draft Soviet-Iranian oil treaty. This agreement allowed the Soviets to explore oil in northern Iran in exchange for the withdrawal of Soviet forces from the northern part of the country, leaving the decision to either approve or reject the agreement to the Iranian Parliament.

This study is important as it provides new insights into a pivotal historical period, analyzing the decline of traditional powers such as Britain and France, and the emergence of new global powers – the United States and the Soviet Union – along with the international struggle for influence over Iran.

The purpose of the study. This study aims to answer following key questions. What were the Soviet motivations for demanding oil concessions in northern Iran? Why did the Soviets insist on not granting oil concessions to any international powers in northern Iran? What was the Soviet stance on the British oil concessions in southern Iran? What were the official, party, and popular positions regarding the Soviet-Iranian oil agreement? What pressure tactics did the Soviets use to secure approval of the Soviet-Iranian oil agreement? Were the Soviets able to achieve gains from the 1947 oil crisis?

The source base. The researcher has utilized a collection of published and unpublished documents along with several Arabic and foreign references and periodicals, which helped in clarifying some of the ambiguous points during this study.

Structure of the article. This study consists of an introduction, four main sections, a conclusion, and a list of sources and references. First: Soviet Oil Ambitions in Iran Before 1947. Second: The Precursors to the Oil Crisis. Third: The Iranian Parliament and the Oil Crisis. Fourth: The Soviet Reaction to the Parliament’s Position. Conclusion: This section outlines the most important findings drawn up by the researcher.

Soviet Oil Ambitions in Iran before 1947

Iran (Persia)^[1] has received all-embracing attention from its neighboring Russia throughout the ages owing to the geographical and historical proximity between the two countries^[2].

Despite the vastness of its empire and its oversight of various seas and oceans, some of Russia’s seas had either restricted access or were inland such as the Baltic Sea, the Caspian Sea, and the Black Sea. This made Iran a focal point for the Russians thanks to its strategic location, bordering Russia’s southern frontiers and overseeing the eastern coast of the overseeing the eastern coast of the northern Indian Ocean, the Caspian Sea, and the Caspian Sea^[3].

Therefore, the Russians actively sought to strengthen their presence in Iran to potentially gain access to the Gulf waters and, consequently, warm waters on one hand, and to obtain economic concessions on the other. This brought them into competition with the United Kingdom, which viewed Iran as the main gateway to its colonies in India. As a result, Iran became the center of Anglo-Russian rivalry, with both powers holding the greatest influence on Iran during the second half of the 19^th century and the early 20^th centuries^[4].

Oil became one aspect of the rivalry between Russia and Britain when Naser al-Din Shah (1848–1896) granted a concession for oil exploration in 1872 to Julius de Reuter, a British subject^[5].

However, the concession was canceled in early November 1873 due to Russian opposition. Later, the Shah granted his son, George de Reuter, a new concession on January 30, 1889, as compensation. Resultantly, Russia returned to its previous stance, demanding economic concessions from the Iranian government, which it successfully obtained in northern Iran in 1893^[6].

However, Russia’s failure to discover oil led it to relinquish the exploration concession to a British subject, William N. Darcy, under a special concession granted by the Iranian government in 1901 for a period of sixty years^[7].   

In a new development, Britain’s discovery of oil in southern Iran in 1908 led to the establishment of the Anglo-Persian Oil Companyy^[8] leading to alarm in the Russian government. Russia pressed the British government to provide a guarantee that the company’s oil investment operations would not extend into the Russian sphere of influence, based on the 1907 agreement that divided Iran into a Russian zone of influence in the north and a British zone of influence in the south^[9].  

The importance of Iranian oil significantly increased after the outbreak of World War I in 1914. Consequently, Russia pressured Iran to grant oil concessions similar to those held by the British. Russia succeeded in compelling Iran to grant a concession to a Russian subject, Akaki Khostaria, for oil exploration in northern Iran for a period of seventy years. Based on this concession, Khostaria established the Russian-Iranian Oil Company. However, this concession did not succeed due to chaos of the to the 1917 October Revolution, after which the new Soviet leadership abandoned all treaties previously signed by the Russian Empire^[10]. Britain seized the opportunity, and purchased Khostaria’s concession for £200,000, establishing the Northern Persia Oil Company Limited^[11].

Khostaria’s concession was opposed by the Soviet Union, as they viewed it as a means for the United Kingdom to extend its influence into the Soviet sphere in northern Iran, which led the Iranian Parliament to refuse to ratify this concession^[12].  

In a Soviet move to block Western attempts to gain economic footholds near its territory, an agreement was signed with the Iranian government in 1921. This agreement stipulated that no concessions previously ceded by the Soviet government would be granted to any third party, and that such concessions would be retained for the benefit of the Iranian people^[13].

However, the American Standard Oil Company of New Jersey succeeded in obtaining a concession from Iran, allowing it to explore for oil in northern Iran in November 1921^[14].

This sparked opposition from both the Soviet Union and the United Kingdom, both of which placed obstacles in the company’s way. The Soviets refused to allow oil to pass through their territory, while the Anglo-Iranian Oil Company denied passage through the southern areas under its control. As a result, the American company entered into a partnership with the Anglo-Iranian Oil Company, but this move faced strong Soviet opposition, forcing the Iranian government to cancel the concession once again^[15].

What precedes clearly illustrates the extent of Soviet concerns over Iran for granting oil concessions to any international power in the northern region adjacent to the Soviet borders. After persistent efforts, in 1925, the Soviets succeeded in obtaining the Khuriya oil concession in the Semnan region, east of Tehran, for a period of fifty years on behalf of their citizen Khostaria, who in turn established the Khuriya Desert Oil Company^[16].  

After a period of stagnation, northern Iran once again emerged on the stage of international rivalry. In 1937, the Iranian government granted the American oil company, Ameranian, a concession to develop oil in northern Iran for a period of sixty years^[17]. The Iranian Pipeline Company also obtained a concession to build pipelines from Iran to Afghanistan, hoping to address the oil transportation challenges facing the project^[18].

These two concessions failed owing to opposition from both the Soviet and British governments. Additionally, Iranian Pipeline Company was unable to resolve the oil transportation problem, whether through Soviet territory or through the southern region covered by the Anglo-Iranian Oil Company’s concession^[19]. This situation forced the Iranian government in 1939 to revoke the two concessions and grant them to the Dutch company Royal Dutch Petroleum for oil extraction in northern Iran^[20].

The Soviet government objected to this by considering it a violation of the 1921 treaty, which led the Iranian government to cancel this concession in 1944^[21]. 

The Precursors to the Oil Crisis

Although the Soviet Union possessed large quantities of oil, this did not prevent it from seeking oil concessions beyond its borders. This was primarily driven by its desire to extend control over Iran and the Gulf region with an intention to prevent Western powers from obtaining oil concessions in the northern region adjacent to its borders as well as to use oil as a tool to influence Iranian policy^[22].

On this basis, the outlines of a major oil crisis between the Soviet Union and Iran began to emerge by the end of 1943 and the beginning of 1944. This occurred amid reports of British and American oil companies seeking to obtain oil concessions in northern Iran, which was under Soviet military control^[23].

The Soviet response was strong and swift, with a delegation headed by Foreign Minister Kaftradzi visiting Tehran in September 1944 to negotiate with the new Iranian government formed by Mohammad Sa’ed Maragheh in March 1944^[24], because he had been Iran’s ambassador in Moscow for a long period^[25].

The Soviets believed in Maragheh’s assuming the premiership alongside a strong front in the Iranian Parliament^[26], headed by Mohammad Mosaddegh^[27]. They believed that taking an anti-British stance would make it easier for them to obtain the oil exploration and extraction concession in northern Iran. However, Sa’ed disappointed their expectations, and started maneuvering against the Soviets, showing no readiness to grant them those concessions. At the same time, Mosaddegh presented a bill to the Iranian Parliament on December 2, 1944, which prohibited the Iranian government from granting any new oil concessions until six months after the withdrawal of the occupying forces from Iran^[28].

The first article of the law stipulated that Iranian government officials were prohibited from negotiating with representatives of foreign countries or oil companies to conclude any agreements related to granting oil concessions, and that the government alone shall be responsible for the exploration of oil and other minerals^[29].

Under this law, Sa’ed refrained from negotiating with the Soviet government delegation, which forced the Soviet delegation, headed by Kaftradzi, to leave Tehran without any success after three months of attempts to obtain those concessions. The Iranian government’s decision triggered an uproar in the Soviet press and some Iranian leftist newspapers. The Soviet newspaper Pravda launched a fierce campaign against what it called the reactionary elements in Iran, accusing them of ignoring the interests of the masses, and leading the country toward economic ruin^[30]. Demonstrations, riots, and strikes also spread in some Iranian cities^[31].  

The Soviets exploited the internal unrest in Iran to increase pressure on Sa’ed’s government^[32], especially through the Tudeh Party ^[33] which led to its downfall on November 9, 1944^[34]. On November 20, 1944, the Iranian Parliament elected a new government headed by Morteza Qoli Bayat, a choice welcomed by both the Soviet Union and the Tudeh Party^[35].

However, his failed negotiations with the Soviets led to the loss of support from both the leftist parties and the anti-communist factions within the Iranian Parliament, which resulted in a vote of no confidence against his government and subsequently his resignation on April 8, 1945.

On May 3 of the same year, Mr. Ebrahim Hakimi was appointed Prime Minister. His disregard for the parliamentary majority, nomination of several friends and relatives to ministerial positions, while the Soviet Union was stirring up a crisis in Iranian Azerbaijan ^[36] in order to obtain new oil concessions in the northern regions in exchange for the withdrawal of Soviet troops from the areas they had occupied in northern Iran, triggered a storm within the Iranian Parliament. This led to a vote of no confidence in his government and subsequently his resignation^[37].

Under these circumstances, in 1945, the Soviet Union undertook geological surveys in the northern region to explore oil in northern Iran without obtaining the approval of the Iranian government^[38].

The Soviet representative also declared that Qavam al-Saltaneh^[39] alone was capable of opening the door for negotiations with the Soviet Union. On February 6, 1946, 104 members of the parliament convened to decide on the election of the prime minister. After deliberation, Qavam al-Saltaneh won with 51 votes, narrowly defeating his rival, Mo’tamen al-Molk, only by one vote^[40].

However, Qavam al-Saltaneh took steps that surprised many. On February 18, 1946, he visited Moscow at the head of a delegation that included: three members of the Iranian Parliament, the head of the Iranian Chamber of Commerce, four journalists, and several officials from the Iranian embassy in Moscow. During the visit, the Soviets renewed their demands for oil concessions in northern Iran and conveyed their readiness to establish an Iranian-Soviet oil company^[41], or they would push for the recognition of Iranian Azerbaijan’s independence while maintaining a continued presence of Soviet forces in northern Iran^[42].

Qavam al-Saltaneh did not intend to hold new parliamentary elections due to his desire to push forward his plan aimed at expelling the Soviet forces and suppressing the Azerbaijani independence movement^[43]. To ensure the success of his plan, he submitted a draft agreement to the Soviet ambassador in Iran on April 4, 1946. The agreement stipulated the establishment of an Iranian-Soviet company, with the Russians holding 51% of its shares and the Iranians 49%. The company would be entrusted with exploiting the oil in northern Iran for a period of twenty-five years, after which both parties would equally share 50% of the shares for the following twenty-five years^[44].

Supposedly, the company was expected to be profitable and provide work for the Iranian population^[45]. The Soviets welcomed this agreement^[46], provided that Qavam al-Saltaneh would present it for approval and ratify it in the Iranian Parliament during its fifteenth session^[47].

The Iranian Parliament and the Oil Crisis

With the convening of the Iranian Parliament in its new session in June 1946, it was expected that Iranian-Soviet relations would experience significant developments, in either positive or negative sense. The Soviet-Iranian relationship was at a critical juncture. The Soviets anticipated failing to secure oil concessions in northern Iran, while the Iranians tended to fully preserve their oil resources in the north^[48]. During the parliament’s discussion of the agreement, Iranian newspapers launched a widespread campaign of criticism against it^[49].

On December 10, 1946, the parliament withdrew its confidence from Qavam al-Saltaneh’s government due to its oil policy with the Soviet Union^[50].   

In January 1947, parliamentary elections were held, wherein a fierce struggle took place between supporters of Qavam al-Saltaneh and supporters of the Shah. The Shah, backed by the military, was suspicious of Qavam al-Saltaneh’s growing influence due to his skillful handling of the Azerbaijani crisis. Meanwhile, the Shah worked to secure a majority for his loyalists within the Iranian Parliament. On the other hand, Qavam relied on his power as Prime Minister and leader of the Democratic Party, which sought to leverage through the elections to gain a majority^[51].

At the same time, pro-Shah newspapers launched an open attack on Qavam al-Saltaneh. On January 4, 1947, the newspaper Javan-e Mardom published claims that Qavam was planning to depose the Shah and establish a republic. The newspaper also claimed that Qavam was in contact with the Soviet Union, and that the Tudeh Party intended to overthrow the Shah if he intended to get himself elected as president. These claims in the newspaper prompted the Shah to urge the military to take action against the Prime Minister. Qavam, in turn, criticized the Shah’s associates for interfering in the elections. Between January and February, the conflict between the two sides intensified over the parliamentary elections, and the clashes between supporters of Qavam and the Shah spilled onto the streets^[52]. Dr. Mosaddegh criticized this conflict, and called for its cessation, urging both sides to refrain from interfering in the elections^[53].

At the end of June 1947, the legislative elections concluded with Qavam al-Saltaneh’s Democratic Party winning the majority. Meanwhile, 20 seats went to Shah Loyalists, and 52 seats were won by supporters of the Iranian opposition leader Mohammad Mosaddegh. The Tudeh Party failed to secure any seats in the Iranian Parliament^[54].

These elections revealed a clear disparity in class representation within the Iranian Parliament, which was as follows: 50% from the upper class and landowners, 35% from businessmen and tribal leaders, and 15% from intellectuals including journalists and university professors^[55].

Accordingly, the class representation in this parliament differed from that of previous ones, as many independents and members of the Tudeh Party were absent. This shift significantly influenced the parliament’s stance on the Iranian-Soviet oil agreement^[56].  

On August 12, the Soviet Union took practical steps toward the proposed oil agreement when the Soviet ambassador presented the draft petroleum memorandum to the Prime Minister for his signature. However, the Prime Minister refused to sign it before submitting it to the Iranian Parliament for approval first^[57] The Soviet response was strong, the Soviet ambassador delivered additional memorandums to Qavam al-Saltaneh on August 25 and September 15, and accused him of delaying the presentation of the agreement to the Parliament, considering this action as a hostile stance towards the Soviet Union^[58].

At the same time, the Iranian opposition strongly opposed this agreement. On September 22, 1947, Dr. Aitbaz, the leader of the opposition in the Iranian Parliament, declared that the Iranian nation could not accept any agreement made by Qavam al-Saltaneh, the Iranian Prime Minister, with the Soviet Union. He argued that Qavam was not a true representative of Iran when he negotiated with the Soviets to conclude an oil agreement with them, as he had not yet gained the confidence of the Parliament.

The opposition deputies supported Dr. Aitbaz’s statements^[59]. They even accused him and his family of treason, while condemning his oil policies. One opposition member asserted that Qavam al-Saltaneh had no legitimate right to negotiate with the Soviets and mentioned that Qavam’s brother had negotiated with the Soviets twenty years earlier regarding a similar agreement that the country had strongly opposed^[60].   

As a swift reaction from Moscow, Radio Moscow broadcasted the text of a statement issued by the Soviet Embassy in Tehran, which included the following key points:

Due to the Iranian government’s delay in finalizing the agreed-upon oil agreement dated April 4, 1946, which provides for the establishment of a Soviet-Iranian oil company, it must be noted that the circumstances arising from this delay do not help in overcoming the difficulties that have arisen between the two countries^[61].

The Soviet Embassy further emphasized, in its statement, the benefits that Iran would gain from the establishment of this company, particularly regarding the employment of unemployed workers in Iran^[62].

In an endeavor to calm the Soviets, Qavam al-Saltaneh informed the Soviet ambassador in Iran that he could not present the oil agreement project granting the Soviets oil concessions in northern Iran until he obtained the confidence of the parliament. Reports indicated that tensions between the two countries eased following this meeting^[63].

Qavam al-Saltaneh gained the confidence of the Iranian Parliament and was tasked to form the new cabinet on September 4, 1947^[64]. Under these circumstances, Qavam al-Saltaneh did not refer to the Soviet oil issue in his speech before the Parliament on September 14, 1947, nor did he request the Parliament to make a decision on the matter^[65].

At the same time, British political circles showed interest in the Soviet efforts to obtain oil concessions in northern Iran, and suggested Qavam al-Saltaneh to keep the door open for the Soviets in case the Iranian Parliament did not approve granting these concessions to them^[66]; the Americans and British agreed^[67]. Granting the Soviets oil concessions in northern Iran would mean preserving British oil rights in southern Iran^[68].    

Despite this, Iran tried hard to gain the support of the United States in confronting the Soviets^[69], but the U.S. refused to intervene because of fear of being accused of inciting Iran to reject the Soviet oil concessions in northern Iran^[70].

On October 5, 1947, Qavam al-Saltaneh presented to the council the programs and projects the government intended to undertake without mentioning the oil agreement. He won the confidence of the Majlis with a majority of 93 votes in favor and 27 against, after promising to explain to them all developments regarding the negotiations with the Soviets about the oil concessions in a closed session^[71].

The opposition parties in the House of Representatives challenged the legitimacy of all the actions taken by the Prime Minister over the past nineteen months, arguing that they did not receive the approval of the council. The government rejected the accusations and claims that it follows a dictatorial policy, or that it does not implement any reform projects.

At the same time, supporters during the session pointed out that the confidence provided has nothing to do with the ongoing negotiations with the Soviets but was limited to future projects and programs prepared by the government. Meanwhile, the opposition indicated that it is impossible to grant confidence to a government based on its future projects, rather the confidence should be given based on the government’s past actions^[72].

The following day, the head of the government spoke with a United Press correspondent and stated that the confidence he received from the House of Representatives was an endorsement of his programs related to reforms, and it should not be interpreted as approval of the oil agreement with the Soviet Union. He also pointed out that he would not attempt to influence the decision that the members of the House of Representatives would make regarding this agreement^[73]. He added that he does not expect the Soviets to change their consistently friendly stance toward Iran if the House of Representatives does not ratify the agreement, or if the Soviet Union decided to cut ties with Iran.

On October 13, 1947, the Soviet ambassador in Iran became furious after his meeting with Mr. Ghavam, who failed to convince him to immediately present the agreement to the Iranian House of Representatives. Ghavam explained to the ambassador that he was bound by a commitment to discuss the matter not only with the members of the House and his Democratic Party colleagues, but also with the American and British embassies. This explanation caused the Soviet ambassador to leave angrily, protesting vehemently^[74].

On October 19, 1947, Ghavam submitted a report on the Iranian-Soviet oil agreement, but the House of Representatives was forced to postpone its session without hearing the statement that Mr. Ghavam had announced he would deliver regarding his negotiations with the Soviet government about the oil agreement that had reached in April 1946. This was owing to the lack of a legal quorum, as opposition deputies – led by the deputies from Azerbaijan – deliberately being absent from the session, pressured the Prime Minister into postponing his statement^[75].     

On October 22, 1947, Ghavam presented a three-hour report to the Iranian House of Representatives about his negotiations with the Soviet government concerning the establishment of a Soviet-Iranian oil company to exploit oil in northern Iran. However, he concluded his report without recommending the council to either approve or reject the 1946 oil agreement.

On the night of the same day, faced with strong opposition, the Iranian House of Representatives passed a law rejecting the 1946 Soviet-Iranian oil agreement by a majority of 102 votes against 22 in favor^[76]. 

The opposition movement against this agreement within the House of Representatives was led by Dr. Mohammad Mossadegh and Dr. Reza Zadeh Shafigh. Reza Zadeh Shafigh declared that no foreign institution would be allowed to invest in the oil in northern Iran^[77].  

He then presented a law affirming this position, which received the support of 102 members and was rejected by two. The law included the following in its first article.

A rejection of the agreement signed between Ghavam and Sadshkov

A confirmation that the Iranian government will invest in and develop its oil resources within five years through Iranian companies, with the possibility of relying on foreign experts. A statement that if oil is found in northern Iran, the government has the right to negotiate with the Soviets to sell them oil products^[78].

The enthusiasm of the nationalists inside the House of Representatives led Ghavam to feel a sense of despair, believing that confidence would be withdrawn from his government. He then started negotiations with the Anglo-Iranian Oil Company to amend the 1933 agreement, but the British rejected it and the Americans ignored it.

At the same time, the Shah worked hard to undermine Ghavam’s power in both the Cabinet and the House of Representatives, while the pro-Shah opportunists took advantage of this situation to advance their own interests^[79].

On December 1, 1947, after a secret meeting of the council, Ghavam addressed the Iranian people, stating that he was under pressure from two great powers, but he would continue to demand the modification in the British oil concession in the south^[80].   

After this speech, Ghavam’s government resigned on December 10, 1947, owing to the pressure from the Soviets on one hand and the Iranian House of Representatives on the other after its refusal to grant him a vote of confidence^[81].

Mossadegh tried to form a new government, but he failed to gain the confidence of the House of Representatives, which led to the government’s fall and the spread of riots and demonstrations across the country. Many of his former supporters and allies turned against him, while mobs and unruly crowds occupied the headquarters of his party. Ghavam himself was placed under house arrest, but was later allowed to travel to Europe because of health reasons^[82].

In the midst of this politically turbulent atmosphere, some pro-government and opposition circles in Iran acknowledged that Ghavam was a skilled politician, who efficaciously managed the country’s foreign affairs. He was able to achieve the withdrawal of Soviet forces in 1946, with the help of the Shah, as well as to liberate the Azerbaijan region from the separatists. He also succeeded in outsmarting the Soviets by having the House of Representatives reject the oil agreement through which they aimed to occupy northern Iran^[83].

Fakhr Hekmat, the Speaker of the Iranian House of Representatives, tried to form a new cabinet under his leadership, but failed and resigned after just one day. Then, a vote was held within the House of Representatives to choose a new Prime Minister, resulting in the victory of Ebrahim Hakimi – a former prime minister – with 54 votes against 53 votes for Dr. Mossadegh. Subsequently, the Shah asked Mr. Ebrahim Hakimi to form the new cabinet^[84].

The Soviet Reaction to the Position of the Iranian House of Representatives

The Iranian House of Representatives’ rejection of the oil agreement provoked a strong reaction from the Soviet Union. On November 21, 1947, the Soviet government sent a sharply worded memorandum. Soviet newspapers and Radio Moscow also launched attacks against the Iranian government, accompanied by a powerful propaganda campaign led by the Tudeh Party and Iranian press loyal to the Soviet Union. It was coupled with the mobilization of Soviet forces along the border and efforts to revive communist influence in the region^[85], especially in Iranian Azerbaijan^[86].

The Soviet memorandum presented to the Iranian Prime Minister on November 21, 1947 pointed out that the Iranian government had agreed to establish a joint Soviet-Iranian oil company to explore oil fields in northern Iran.

The Shah of Iran also confirmed the Iranian government’s approval of the establishment of this company in a special statement given to Ambassador Sadshkov on April 8, 1946. The agreement signed between the two parties stipulated that it would be presented to the newly elected House of Representatives within a maximum period of seven months starting from March 24, 1946.

The Iranian government violated this agreement by refusing to ratify it and declaring before the council its opposition to the treaty. In particular, the Soviet government could not ignore the rejection of the agreement by the Iranian House of Representatives, and it held the Iranian government responsible for the consequences of rejecting the agreement^[87].

On November 22, 1947, the Iranian government convened to discuss its response to the strongly worded Soviet memorandum^[88].

Denying the Soviet accusations as follows. They argued that the reason Iranian Prime Minister delayed presenting the oil agreement to the Iranian House of Representatives for a year was linked to the fact that House of Representatives was not functioning during that period.

They also stated that the Prime Minister presented the oil negotiations with the Soviets to the House of Representatives as a set of discussions rather than a formal agreement. The Iranian responded that they were in agreement withs that a law issued on December 2, 1944, which prohibited Iranian government officials from negotiating with any foreign country regarding oil.

While the Soviets accused the Iranian government of blatant bias against the Soviet Union, because the British still held the concession to exploit oil wells in southern Iran, the Iranian response stated that the oil concession in southern Iran was granted at a time when Iran did not have a constitution.

The Soviets had claimed that Ghavam forced the House of Representatives to reject the agreement. This claim was strongly denied in the response by the Iranians, which emphasized that Ghavam respected his commitment until the last moment, but the deputies did not support him, because the 1944 law prohibited entering into negotiations related to Iran’s oil wells.

The Soviets had alleged in their memorandum that the Shah had approved the oil agreement. The response to this claim by the Iranians specified that it was untrue, unsupported by facts, and constitutionally invalid^[89]. 

Consequently, this crisis led to increased tension between Iran and the Soviet Union and is perceived to be one of the main precursors to the Cold War, marked by the end of British influence in Iran and the rise of American control over the country as part of the containment policy against the Soviet Union during the 1950s.

Conclusion

The following findings were drawn from this research:

The Soviet expansionist ambitions in Iran date back to prior to 1947 due to its strategic geographical location and diverse economic resources. Once World War II ended, Iran’s importance increased with the emergence of large quantities of oil, making it a field of conflict between the United States and the Soviet Union, as oil became one of the world’s most sought-after commodities and a key element of this geopolitical struggle.

There were several motivations that guided Soviet policy toward Iran after World War II:

Expansionist motivation: The Soviet Union sought to expand its influence in Iran by gaining control over strategic economic resources and establishing a political foothold in the country. Unlike classical colonialism, Soviet expansion was not based on direct occupation but on political influence, economic pressure, and support for communist-oriented movements. Iran’s geographical position and resources made it a crucial arena for extending Soviet influence into the Middle East.

Security motivation: The Soviet ambition to keep Western powers away from obtaining oil concessions in the northern region bordering its territory, which could pose a threat to its national security.

Political and economic motivation: Using oil as a tool to influence Iranian policy. During World War II, the Soviets demanded oil concessions in northern Iran similar to the British oil concessions in the south. Official, party, and public positions differed regarding the 1947 oil agreement.

a) Opposition: The Iranian opposition played a significant role in the Iranian Parliament’s rejection of the 1947 Iranian-Soviet oil agreement, especially when Dr. Mohammad Mossadegh presented a bill on December 2, 1944, to the Iranian House of Representatives. The bill prohibited the Iranian government from granting any new oil concessions until six months after the withdrawal of occupying forces from Iran.

b) Official Position:

The Shah: He opposed granting the Soviets oil concessions in northern Iran owing to his pro-Western orientations.

Various Iranian governments: Their positions varied depending on their political affiliations.

c) Parties and Newspapers: The vast majority of them opposed this agreement, except for the Tudeh Party, the communist party supported by the Soviet Union.

Popular Position: The Iranian people rejected the control of Western powers over Iran’s oil wealth. The Soviets used several pressure tactics to compel the Iranian government to agree to the oil agreement, which are explained in the succeeding paragraphs.

Radio Moscow and Soviet newspapers – used to launch propaganda campaigns against the Iranian government. The Tudeh Party and pro-Soviet Iranian press – mobilized public opinion within Iran in favor of the agreement. Massing Soviet troops on the Iranian border – as a show of force to intimidate the Iranian government.

Despite Iran’s rejection of the oil agreement, the Soviets succeeded in gaining some advantages from this crisis: a) The Soviet Union succeeded in obtaining a promise from Iran to prevent any foreign power from receiving oil concessions innorthern Iran; b) The Soviets were granted priority in purchasing any oil discovered in t northern Iran; c) The Soviets raised the issue of ending British oil concessions in southern Iran – a matter that was later realized through nationalization in 1951 by opposition leader and then Prime Minister Dr. Mohammad Mossadegh.

The political developments that took place in Iran during the 1950s, following the country’s fall under American influence, did not provide the Soviets with any opportunity to demand oil concessions.

Since the Iranian Parliament’s rejection of the oil agreement, the Soviet Union did not renew its demands for any new oil concessions owing to its preoccupation with the Cold War.

^{1 Iran (Persia): The word “Iran” is derived from the Aryan peoples who migrated there in ancient history, meaning “Land of the Aryans.” This name was not used during the Islamic era; instead, the term “Persia” was used to refer to ancient Iran. It remained in use locally and internationally until 1935, when Shah Reza Pahlavi officially adopted the name “Iran” to emphasize the Iranian identity promoted by this Shah. For more details, see: Mahmoud Shaker, and Ismail Ahmed Yaghi, Modern and Contemporary Islamic World History, vol. 1 (Riyadh: Obekan Library, 2010), 227.}

^{2 Ahmed Kamal Mazhar, Studies in Modern and Contemporary History of Iran (Baghdad: Dar Al-Shu’oon Al-Thaqafiya Al-Aama, 1985), 11.}

^{3 Ahmad Basil Al-Bayati, “The Importance of Iran’s Geographical Location for Soviet Security and Its Impact on Bilateral Relations 1918–1946,” Gulf and Arabian Peninsula Studies Journal 10, no. 39 (1984): 154, 158–159.}

^{4 Ahmed Ibrahim Khalil, and Murad Khalil Ali, Iran and Turkey: A Study in Modern and Contemporary History (Mosul: University of Mosul, 1992), 88–92.}

^{5 Charles Issawi, ed. Economic History of Iran 1800–1914 (Chicago: The University of Chicago Press, 1971); R. Cottam, Nationalism in Iran (Pittsburgh: University of Pittsburgh Press, 1964), 158.}

^{6 George Lenczowski, Russia and the West in Iran 1918–1948, Study in Big-power Rivalry (New York: Cornell University Press, 1968), 76.}

^{7  J.C. Hurewitz, Middle East Dilemmas Dilmmas. The Background of United States policy (New York: Council on Foreign Relations, 1953), 10.}

^{8 Anglo-Persian Oil Company: The British D’Arcy Oil Company succeeded in discovering large quantities of oil in southern Iran in 1908, seven years after being granted the concession in the Masjed Soleyman area. This required providing production necessities, pipelines, and a special port for transporting the oil and tankers, which exceeded the capabilities of the D’Arcy Company. Therefore, the owners were willing to transfer this concession to any foreign company. The British government intervened and negotiated with the Persian government to establish the Anglo-Iranian Oil Company in 1909 to obtain the concession to exploit oil in southern Iran. The company’s name was changed to the Anglo-Iranian Oil Company in 1935 during the reign of Shah Reza Pahlavi. For more details, see: Nadhim Younis Al-Zawi, “The Political History of Oil Concessions in Iran 1901–1951,” PhD Dissertation (Al-Mustansiriya University, 1999), 24–25; Ahmed Abdelkader Al-Gamal, Problems of the Middle East, 1st ed. (Cairo: Anglo-Egyptian Library, 1955), 539.}

^{9 Amin Banani, The Modernization of Iran (1961), 8.}

^{10 Talib Muhammad Wahim, The British-American Competition over Arabian Gulf Oil and the Arab Position on It, 1928–1939 (Baghdad: Publications of the Ministry of Culture and Information, 1982), 43–44.}

^{11 Stephan Hemsley Longrigg, Oil in the Middle East, its Discovrey and development (London: Oxford University Press, 1968), 38.}

^{12 R.K Ramazani, The Foreign Policy of Iran 1500–1941, developing National in world Affairs (Virgnia: University Press of Virginia, 1966), 203–204.}

^{13  George Lenczowski, Russia and the West in Iran 1918–1948, 317–318.}

^{14 B. Shwadran, The Middle East Oil and the Great Powers (New York: Frederick A. Praeger, 1955), 71–75; Nasrollah S. Fatime, Oil Diplomacy: Powderkeg in Iran (New York: Whittier, 1954), 228–229.}

^{15 The Khuria Oil Company was unable to achieve any success in obtaining oil, which forced the Soviet government to completely abandon this concession in 1956; N.S. Fatemi, Diplomatic history of Persia 1917–1923 (New York: Russell F. Moore, 1962), 303–304.} 

^{16 Nazem Younis Al-Zawi, “The Political History of Oil Concessions in Iran 1901–1951,” 68.}

^{17 W. Charles, Hamilton, Americans and Oil in the Middle East (Houston: Gulf Publishing Company, 1962), 35–39.}

^{18 Rashid Al-Barawi, The Oil War in the Middle East, 3rd edition (Cairo: Al-Nahda Egyptian Library, 1950), 162–163.}

^{19 B. Shwadran, The Middle East, 71–75.}

^{20 Charles W. Hamilton, Americans and Oil in the Middle East, 35–39.}

^{21 Nazem Younis Al-Zawi, “The Political History of Oil Concessions in Iran 1901–1951,” 100.}

^{22  Al-Ahram Newspaper, December 1, 1947, p. 6; Al-Ahram Newspaper, November 27, 1947, p. 6.}

^{23 Hassan Karim Al-Jaf, Encyclopedia of Iranian Political History, vol. 4, 1st ed. (Beirut: Arab Encyclopedia House, 2008), 142.}

^{24 E. Ralph Perkins, S. Everett Gleason, John G. Reid et al., eds. Foreign Relations of the United States, Diplomatic Papers, 1944, vol 5 (Washington: United States Government Printing Office, 1965), 453.}

^{25 Saad, before becoming Prime Minister, was Iran’s ambassador to Moscow. The Soviet government offered him the position of President of the Republic of Iran, but Mohammad Saad refused the proposal. For more details, see: Hassan Karim Al-Jaf, Encyclopedia of Iranian political history, 142.}

^{26 Ibid.}

^{27 Dr. Mohammad Mosaddegh (1881–1967): belonged to a distinguished family connected to the Qajar dynasty, which ruled Persia until 1925. He studied law in Paris and Geneva, then became a minister during the late Qajar era. From that time, Mosaddegh advocated for agricultural reform and modernization of the system. When Reza Shah seized power in 1925, Mosaddegh opposed the Shah’s authoritarianism and was subsequently exiled and placed under house arrest in a remote area of Afghanistan until 1941. After Reza Shah abdicated in favor of his son Mohammad Reza Pahlavi, Mosaddegh was recalled from exile and allowed to resume his political career. As Prime Minister, he led the nationalization movement, pushing his country to pass a law to nationalize Iranian oil. In response, the United States and Britain orchestrated a coup through their intelligence agencies that overthrew his government. For more details, see: Al-Khouli Masoud, The Historical Encyclopedia, vol. 4, 3rd edition (Beirut; Lebanon International Encyclopedias Company, 2005), 225–226.}

^{28 George Lenczowski, Oil and State in the Middle East (Ithaca, N.Y.: Cornell University Press, 1960), 90; Hassan Karim Al-Jaf, Encyclopedia of Iranian political history, 142.}

^{29 Ibid., 142–143.}

^{30 Ralph Perkins, E. Everett Gleason, S., Reid John G. et al., eds. Foreign Relations of the United States, 483.}

^{31 Sepehr Zabih, The Communist Movement in Iran (1966), 89–90.}

^{32 H. Hekmet, “Iran response to soviet – American Revolarg 1951–1962, Acomparative Study,” PhD diss. (Clumbia University, 1974), 24.}

^{33 The Tudeh Party: The Iranian Communist Party (Tudeh), meaning “The Masses,” emerged from the merger of two currents in the early twentieth century. They shared among the circles of Iranian workers employed in the oil fields in the Baku region of the Soviet Republic of Azerbaijan. After the failure of the Russian Revolution in 1905, in which some of them participated, they returned to their country where they took part in the Constitutional Revolution led by Iranian clerics in 1906. Following the October Revolution in 1917, they established a labor organization called the “Justice Party” (Hizb al-‘Adala) and set up branches in major Iranian cities. In 1920, representatives of the Justice Party convened and designated their meeting as the founding congress of the Iranian Communist Party. The party’s activity increased during the reign of Reza Pahlavi, which prompted him to issue a law banning the party’s activities in 1929. Despite this, the party continued its activities across most Iranian regions, especially in Kurdistan and Azerbaijan. In 1933, Dr. Taji Irani, a professor at the University of Tehran, issued Al-Dunya magazine, which became an ideological communist platform, paving the way for the establishment of a party called the Tudeh Party in 1941. For more information, see: “Cable from Dimitrov to Stalin, Molotov, Beria, and Malenkov Moscow, NO 4202, December 10, 1941,” Selected Marxist Leninist Writings, accessed March 19, 2025, https://neodemocracy.blogspot.com/}

^{34 H. Hekmet, Iran response to Soviet–American rivalry 1951–196, 224.} 

^{35 Hussein Kay Ostovan, Siasat-i-Movazeneh-manfiey, Dar Mailis Chardahom [Establishment of a Negative Equilibrium in the 14th Majlis] (Tehran, Majlis Publishing Press, 1949), 184–188.}

^{36 Azerbaijan Crisis: Iran faced the problem of the withdrawal of foreign troops from its territory after World War II. The Tehran Agreement, signed in 1943 between Iran and the United States, Britain, and the Soviet Union, stipulated that foreign forces must withdraw from Iran within six months after the end of the war. While American and British forces withdrew, the Soviet Union refused to pull out from the northern regions (Azerbaijan) that it had occupied during World War II. This refusal sparked a political crisis between Iran and the Soviet Union, known as the Azerbaijani Crisis. For more information, see: Nabila Mahmoud Dheeb Mliha, “American Policy towards Iran 1945–1981,” master’s thesis, Islamic University of Gaza, Palestine, 2012), 36.}

^{37 Alaa Taher, The Islamic World in Contemporary Global Strategies, 1st ed. (Lebanon: Dar Beirut), 460.}

^{38 “Soviet Document, The state Defense Committee Dcree of the GOKO, Moscow the Kremlin, 21/6 /1945 NO. 9168SS,” in Cold War International History Project. Virtual Archive, accessed March 19, 2025, http://digitalarchive.wilsoncenter.org/document/120469}

^{39 Qavam al-Saltaneh: He was born in 1873 in the Gilan region and worked as a clerk in the royal court during the reign of Nasser al-Din Qajar. He held the position of Minister of War in 1911, and in 1912 became Minister of Finance. He opposed the Pahlavi royal dynasty, which led the Shah to exile him. However, the Shah later rescinded the exile order and allowed him to return to Iran. He maintained friendly relations with the Soviets and later assumed the position of Prime Minister of Iran in 1946 following Soviet expansion in Azerbaijan and the Iranian government’s failure to resolve the conflict with Soviet forces. For more information, see: Ronald E. Powaski, The Cold War the United States and the Soviet Union 1917–1991 (New York: Oxford University Press, 1998), 62; Alaa Taher, The Islamic world in contemporary global strategies, 460.}   

^{40 Hassan Karim Al-Jaf, Encyclopedia of Iranian political history, 150.}

^{41 Kling Hoffer, Arthur Jay, The Soviet Union and International Oil Politics (New York Columbia University, 1977), 125.}

^{42 Ronald E. Powaski, The Cold War: The United States and the Soviet Union 1917–1991, 62.}

^{43 “Russia, inside story of the Squeeze on Iran,” News Week, March 25, 1946, 42.}

^{44 “Soviet Document, Message from Prime Minister Ahmad Qavam to Ambassador Sadchikov About A Joint Oil Company, Tehran, April 04, 1946,” in Cold War International History Project. Virtual Archive, accessed March 19, 2025, http://digitalarchive.wilsoncenter.org/document/120469; For more information about this agreement, see: Mikail Brooks, Oil and Foreign Policy (Baghdad: Al-Shaab Press, 1951), 83–85.}

^{45 Arfa, H. Under Five Shahs (New York: Morrow, 1965), 358.}

^{46 “Soviet Document, Letter of Reply of Sadchikov to Qavam About the Joint Oil Company, Tehran, April 04, 1946,” Cold War International History Project.Virtual Archive, accessed March 19, 2026, https://digitalarchive.wilsoncenter.org/document/120469%20; For more information about this agreement, see: Mikail Brooks, Oil and Foreign Policy, 83–85.}

^{47 “Soviet Document, Memorandum from Atelegraph Report of Ashurov from Tehran, April 04, NO1045/101, 1946,” Cold War International History Project.Virtual Archive, accessed March 19, 2026, http://digitalarchive.wilsoncenter.org/document/120469; Colin Brown and Peter Mooney, The Cold War until the Accord 1945–1980, 1st ed. (Beirut: Dar Al Shorouk, 1983), 30; Al-Ahram Newspaper, February 23, 1947, p. 1.}

^{48 Al-Ahram Newspaper, June 23, 1947, p. 1.}

^{49 Stephen Hemsley Longrigg, Oil in the Middle East, 130–131.}

^{50 Hasan Karim Al-Jaf, Encyclopedia of Iranian political history, 170.}

^{51 Farmerz S. Fatemi, “The Usser in Iran: The Irano Dispute and the Pattern of Azerbijan Revolution 1941–1947, Ph.D. diss.” (New School for Social Research, 1976), 194.}

^{52 Farmerz S. Fatemi, “The USSR in Iran: The Irano dispute,” 194.}

^{53 Ibid.}

^{54 Komiyon-Nashr-I Vaqi-yi Siyasi, Naft Va Bahrain [Oil and Bahrain] (Tehran: Hassan Iqbal, 1951), 9–10.}

^{55 Ibid.}

^{56  Ibid.}

^{57 Farmerz S. Fatemi, “The USSR in Iran: The Irano dispute,” 195.}

^{58 Ibid.; Al-Ahram Newspaper, September 19, 1947, p. 6.}

^{59 Mohammed Hassan Al-Aidrous, Political Developments in the United Arab Emirates (Kuwait: Dar Al-Silsilah, 1983), 166.}

^{60 Ibid.}

^{61 Al-Ahram Newspaper, September 26, 1947, p. 6.}

^{62 Ibid.}

^{63 Al-Ahram Newspaper, September 29, 1947, p. 6.}

^{64 Al-Ahram Newspaper, September 5, 1947, p. 6.}

^{65  Iran (1951–1954), vol. 10 of Foreign Relations of the United States, Diplomatic Papers, 1951–1954 (Washington: United States Government Printing Office, 1989), 71–76.}

^{66 Mohamed Hassanein Heikal, Defender of the Ayatollah (The Story of Iran and the Revolution), 6th ed. (Cairo Dar Al-Shorouk, 2002), 53; Al-Ahram Newspaper, September 18, 1947, p. 6.}

^{67 Michael A. Palmer, Gurdians of the Gulf 1883–1992 (New York: The Free press Advision of Macmilian), 41.}

^{68 Ibid, p. 25.}

^{69 Michael A. Palmer, Gurdians of the Gulf 1883–1992, 40.}

^{70 The Near East, South Asia, and Africa,, vol. 6 of Foreign Relations of the United States, 1949 (Washington: United States Government Printing Office, 1977), 496–997.}

^{71 Farmerz S. Fatemi, “The USSR in Iran: The Irano dispute,” 198.}

^{72 Al-Ahram Newspaper, October 6, 1947, p. 6.}

^{73 Al-Ahram Newspaper, October 10, 1947, 6.}

^{74 Al-Ahram Newspaper, October 14, 1947, p. 6.}

^{75  Al-Ahram Newspaper, October 20, 1947, p. 6.}

^{76 The Near East and Africa, vol. 5 of Foreign Relations of the United States, Diplomatic Papers, 1947 (Washington: United States Government Printing Office, 1972), 951–952; Richard Cottam, Nationalism in Iran (Pittsburgh: University of Pittsburgh Press, 1964), 197–198; Al-Ahram Newspaper, October 23, 1947, p. 6.}

^{77 Farmerz S. Fatemi, “The USSR in Iran: The Irano dispute,” 199; Richard Cottam, Nationalism in Iran, 197–198; Al-Ahram Newspaper, October 23, 1947, p. 6.}

^{78 Farmerz S. Fatemi, “The USSR in Iran: The Irano dispute,” 200; Al-Ahram Newspaper, September 19, 1947, p. 6.}

^{79 Ibrahim Safai, Nukhust Vaziran [Prime Minister], vol 1 (Tehran: [S.n.], 1970), 62–63.}

^{80 L.P. Elwell-Sutton, Persian Oil, Astudy in Power Politics (London: Lawrence and Wishart), 119.}

^{81 Rouh Allah K. Ramzani, Irans Foreign Policy 1941–1973 (Virginia: University Press of Virginia, 1975), 169.}

^{82 L.P. Elwell-Sutton, Persian oil: A study in power politics, 119–120; Al-Ahram Newspaper, December 12, 1947, p. 8.}

^{83 Al-Ahram Newspaper, December 12, 1947, p. 8; Ibid., December 15, 1947, p. 8.}

^{84 Ibrahim Hakimi: Mr. Hakimi was known for his opposition to the Soviet Union and his loyalty to the United States and Britain. This stance was clear when he served as a minister in the Iranian government in 1919, as he supported Iran’s demands to annex a large part of the Caucasus region. He also took a firm stance against the Soviet presence in Iranian Azerbaijan when he was Prime Minister in 1945; Rouh Allah K. Ramzani, Irans Foreign Policy 1941–1973, 169; Al-Ahram Newspaper, December 23, 1947, p. 8; Ibid., December 28, 1947, p. 8.}

^{85 George Lenczowski, The Middle East in World Affairs, 3rd ed. (Ithaca, New York: Cornell University Press, 1968), 30; Al-Ahram Newspaper, November 27, 1947, p. 6.}

^{86 Azerbaijan Province: A region in northwest Persia (Iran), which served as the capital of the Safavid state. Azerbaijan remained under the rule of the Persian sultans, but it was often a hotbed for uprisings and revolutions against the sultans’ injustices. During the Qajar era, Azerbaijan became a contested area between Russia and Iran, where several battles occurred that ultimately favored the Russians. The Azerbaijani response to this was to cooperate with the Russians due to Tehran’s neglect of the region. At the beginning of the 20th century, Azerbaijanis maintained continuous contact with secret organizations in Russia, particularly socialist groups. As a result, the first quasi-working-class organization for the oppressed in Iran was founded, called the Social Democratic Party. This was a democratic socialist organization influenced by Russian socialists. Its publications were printed secretly in Baku, the capital of Northern Azerbaijan, and smuggled into Iran. Associations were also established to spread revolutionary ideas, and the newspaper Anjoman disseminated these thoughts. The slogans of these associations were “Justice – Freedom – Unity,” closely resembling the clubs of the French Revolution.
One of the leaders of the revolution in Azerbaijan was Khayyabani, but his separatist movement failed due to Russian abandonment. The Azerbaijanis continued to express dissatisfaction with the autocratic regime in Tehran until Azerbaijan came under Soviet influence on August 25, 1941. During the Soviet presence, the Russians sought to tie Azerbaijan to them through ideology and thought, including the relocation of Russian and Northern Azerbaijani families to the region. This eventually led to the outbreak of the crisis known as the Azerbaijan Crisis. For more details, see: Governor of the Egyptian Ministry of Foreign Affairs, Egyptian National Archives, Portfolio No. 782, File No. 206/7/4/ Part 2, A – S – J, Historical period of the file: 30/8/1941 to 10/6/1945, Subject: The Royal Egyptian Embassy in Tehran.}

^{87 The Near East and Africa, 982–983.} 

^{88 Al-Ahram Newspaper, November 23, 1947, p. 6.}

^{89 Stephen Hemsley Longrigg, Oil in the Middle East, 131.}

About the authors

Wael Mohamed Mahmoud Al-Refae

Author for correspondence.
Email: weali@kfu.edu.sa
ORCID iD: 0009-0008-0923-1979

PhD, Associate Professor, at the Department of Social Studies, Faculty of Arts

References

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