Abadan Crisis

The Abadan Crisis (Persian: بحران آبادان‎‎ Bohrân-e Âbâdân) occurred from 1951 to 1954, after Iran nationalised the Iranian assets of the Anglo-Iranian Oil Company (AIOC) and expelled Western companies from oil refineries in the city of Abadan (see Abadan Refinery).

The AIOC was the United Kingdom's "single largest overseas asset" and a "source of national pride" in the British post-war era of Clement Attlee, and Ernest Bevin. Even as late as the "1940s and early 1950s some high British officials still believed that Persian petroleum was actually and rightly British petroleum because it had been discovered by the British, developed by British capital, and exploited through British skill and British ingenuity."

In stark contrast, Iranian Premier Mohammad Mosaddegh believed the 1933 concession granted to the AIOC by Iran was "immoral as well as illegal". Mosaddeq "challenged every aspect of the British commercial presence in Iran". The British feared that if Mosaddeq's policies prevailed, "nationalists throughout the world could abrogate British concessions with impunity."

The AIOC was nationalized by the Iranian Parliament in March 1951. In Iran this was enormously popular and seen as a long overdue staunching of the bleeding of its national wealth which could now be harnessed to fighting poverty in Iran. In Britain the nationalisation was widely seen as an intolerable breach of contract or theft. British emissaries in the United States after the nationalisation, argued that allowing Iran to nationalise the oil company "would be widely regarded as a victory for the Russians" and would also "cause a loss of one hundred million pounds per annum in the United Kingdom's balance of payments, thus seriously affecting our rearmament program and our cost of living."

British warships blockaded Abadan. On 22 August, the British cabinet imposed a series of economic sanctions on Iran. It prohibited exports of key British commodities, including sugar and steel, directed the withdrawal of all British personnel from Iranian oil fields and all but a hard core of about 300 administrators from Abadan and blocked Iran's access to its hard currency accounts in British banks.

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Wikipedia