The Seven Sisters and the Humiliation — 1953, the Revolution That Was Stolen

The black wealth that gushed from underground welled up, sure enough, from the deserts of the Middle East. Yet the company that set its price and carried home the lion’s share of its profits was headquartered far away, in London or New York. The first country to stand against this injustice was the first to be struck down. This is its story.

The “Seven Sisters” who carved up the world

After the Second World War, the world’s oil was ruled by a mere handful of giant companies. Later an Italian oil executive mocked them with the name “the Seven Sisters.”

In today’s corporate names, they trace to Exxon Mobil, Shell, BP, Chevron and the rest — seven Western firms. From exploration and drilling to transport, refining, and the sale of gasoline at the pump, they held the entire chain in a single grip that crossed every border. Tanker routes, refinery capacity, the world market price — all of it sat in the palm of their hand. Producing nations could say nothing about the price of what came out of their own ground, nor about how much was pumped from it. To the companies, an oil field was at once “national property” and a “branch office” of a foreign firm.

What reached the producing nations was only a sliver of the profit — the royalty, the fee for using the concession. As resentment built over the sheer imbalance, in 1950 Saudi Arabia struck a “fifty-fifty agreement,” splitting the profits evenly between company and state. It was a step forward, but it was still only “half.” The resource is ours — that conviction would explode next door, in Iran.

”The oil is ours”

Iran’s oil was held by the former Anglo-Persian — that is, the Anglo-Iranian Oil Company (later BP). Behind it stood its major shareholder, the British government. The share that fell to Iran was far too small, and the people’s anger had reached its limit.

The man who rose carrying that anger was Prime Minister Mohammad Mosaddegh. In 1951, Iran took a historic step.

The Iranian parliament voted to nationalize its oil. It seized Anglo-Iranian and set out to manage the oil through a company of its own — the National Iranian Oil Company. The port city of Abadan, home to one of the world’s largest refineries, was the symbol of it all.

It was a proud declaration that said “no” to colonial-style domination. Mosaddegh became a national hero, and his name was known around the world.

The blockade, and the prime minister who fell

But Britain did not stay silent. Stripped of its own oil company, the British government turned to retaliation.

First, it boycotted Iranian oil the world over. It moved the navy to obstruct shipments and threatened buyers out of doing business. Abadan, the world’s largest refinery, could still pour out oil — but it lost its buyers, and it ground to a halt. This was the Abadan Crisis. Cut off from oil, its single greatest source of income, Iran’s economy slowly dried up.

Still Mosaddegh would not yield. The sympathy and admiration of the world gathered around this gaunt old prime minister. In court, in parliament, and before the international community, he went on pleading his nation’s just cause with dignity. But with exports halted, the national purse could not hold out. The blockade, given time, tightened around Iran without fail.

Then, behind the scenes, another force began to move. These were the depths of the Cold War. Fear was added to the mix — that “an Iran thrown into economic chaos might, in time, lean toward the Soviet side” — and Britain, seeking to win back its lost oil concession, asked America for help. At first reluctant, America too, pushed by the logic of the Cold War, finally swung toward intervention.

Mosaddegh was arrested and vanished from the political stage. The exiled Shah (Pahlavi) regained power, and the oil was pulled back under the control of a consortium of Western companies. The Middle East’s first serious attempt to take its resources into its own hands was, in this way, crushed.

The lesson left by defeat

Iran’s bid ended in failure. Yet the episode left a deep scar across the whole Middle East — and one lesson.

The first was profound mistrust. The memory that an elected leader had been brought down by foreign hands would cast a long shadow over relations between Iran and the West, America above all, for decades to come. Some see in it one of the wellsprings of the “anti-Western” sentiment that would recur across the Middle East in later years.

And the second. The producing nations learned something vital, along with the pain: stand alone against the vast oil capital and its blockade, and you will be crushed. If the buyers were united, the sellers had to unite too, or they could not win. That bitter understanding would in time draw the producing nations together.

Next time, we follow the moment that solidarity took shape — the birth of OPEC (the Organization of the Petroleum Exporting Countries), which gave its first cry in Baghdad in 1960. One nation’s setback was never in vain.