Perhaps it’s no surprise that British companies are treading carefully in Iran. The complex trade relationship between the countries has often been fraught — and muddied by geopolitical undercurrents.
Iran was the first country in the Persian Gulf to discover oil, in 1908 when the Anglo-Persian Oil Company, later to become BP, struck a big discovery in the vicinity of Masjed Soleiman, a city in the Khuzestan province in southwestern Iran.
The industry transformed Iran and helped create what went on to become one of the world’s biggest companies.
One of Apoc’s big early customers was Winston Churchill, First Lord of the Admiralty at the time, who set out to modernise the Royal Navy by scrapping coal-fired steamships and switching instead to oil-fired vessels.
To ensure reliable supplies, the British government invested in the company and took a controlling stake, making it a powerful behind-the-scenes player in Iran throughout much of the 20th century.
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Local anger over British meddling in the country’s affairs was fuelled by the terms of an agreement with the Shah of Iran that granted Apoc exclusive rights to the country’s oil. In return, Iran received just 16 per cent of the profits.
Suspicions grew further in 1953, when the company was nationalised by Iran’s democratically elected government — prompting a standoff with Britain, which called for a blockade of Iranian oil, and its US ally. It ended with a US and UK-backed coup in 1953, which restored the pro-western shah to power.
The coup ensured Iranian oil kept flowing to the west but intensified Iranian suspicions of foreigners meddling in their affairs.
The shah became increasingly autocratic, prompting a strong anti-western legacy that culminated in the 1979 Islamic revolution.
Now that sanctions imposed on Iran over its nuclear programme look likely to be removed, western companies have a new opportunity to return to Iran — for the third time since 1979. How long they will be welcome before relations sour again is unclear.