copt no. 3 G7
assistant director,for hie
SPECIAL ESTIMATE
APPROVED FOR RELEASE DATE: 6
CURRENT DEVELOPMENTS IN IRAN
(Dl(3|
ublished1
central intelligence agency
SPECIAL ESTIMATE
CURRENT DEVELOPMENTS IN IRANublished1
The Intelligence organizations of the Departments ol State, the Army, the Navy, the Air Force, and the Joint Staffin the preparation of this estimate. All members of the Intelligence Advisory Committee concurred in this estimate onxcept as noted by the Director of Intelligence, USA k, on page 2.
CURRENT DEVELOPMENT IN IRAN
CONCLUSIONS
dash of Interests between Iran and the UK over Iran'shasritical stage with the elevation olthe leader of the ultra-nationalist National Front group,
to the premiership.eal effort will undoubtedly be made loompromiseolution will be achieved only with great difficulty. In any event, there is little Indication that Mossadeq and the Anglo-Iranian Oil Company (AIOC) will modify their respective stands tn sufficient time to permit an early settlement of lite issue.
Although there are important elements opposed to Mossadeq. It Is unlikely that he can be removed from power so long as tbe oil questionurning issue, except by violence or by the establishmentemi-dictatorial regime under the aegis of the Shah. In the present highly Inflammatory state of Iranian public opinion, an attempt to seton-parliamentary regime would Involve grave risks which, the Shah has thus far shown no willingness to take.
esult of the present Impasse, the following criticalmay occurettlement is reached:
a. Mossadeq might take physical possession of the oilnow operated by the AIOC. He may also require the British employees of AIOC to leave the country.
UK has indicated that it will not employ force inprior consultation with the US. It is unlikely that the UKby force to forestall or counter physical occupation of the
oil Installations by the Iranian Government, hut the UK could and might land troops in Iran for the actual or alleged purpose of safeguarding British lives in the event of further violence or sabotage.
erious possibility that the landing ofin southern Iran, for whatever reason, would be takenretext for sending its troops Into northern Iran.
the event of further demonstrations and violence,well occur at any time, the Tudeh Party might be able tointernal security. This danger would be increased if, as
is possible, Mossadeq legalises the status of the Tudeh Party or is unwilling to use Iranian armed forces to maintain order.
o. The flow of Iranian oil to Western markets, which was recently curtailed for about two weeks, might be again interruptedecurrence of strikes ln the oil field area or by a, b, c,bove.
ny intensification of the current crisis would give the USSR added opportunities for exploiting the local unrest and might eventually enable the USSR toarge part or the whole of the Iranian oil supply to the Western Powers.*
* It is the view of the Director of Intelligence, USAF, that thisshould read as follows:
"4, ontinuation of the current crisis would greatly enhance the capability of the Soviet Union to deny more and possibly all the Iranian oil to the West through exploitation of the activities of non-Soviet elements. Whether or not the British attempt to resolve the current issue by the use of armed force, possible realization of an important Soviet objectivecquisition of more oilwill have been greatly facilitated.1'
DISCUSSION
Mossadeq, Iran's new Prime Minister, is anHe will attempt to curtail severely foreign influenceand toeutralist policy toward the East-Westhe is also an impractical visionaryoor administrator,unlikely that he will do very much to solve the country'sand social problems. Nevertheless, because he is anand has strong popular support on the oil Issue at least,
he will probably not be easily displaced while that issue is stillIn intornal affairs Mossadeq has criticized former Iranian governments for their failure to achieve social benefits for the people and has opposed measures designed to restrict freedom of speech, assembly, and the press. Politically, he has urged that the Shah be stripped of power and that the Majlis become the dominant factor ln the government. However, he does not believe that the present members of the Majlis truly represent the interests of the Iranian people and advocates electoral reform.
is at presenttrong political position, despitethat he has few personal followers in the Majlis or inruling classhole and that he is disliked andby the Shah. Unlike his predecessors, he is not dependentShah's favor or on factional politics in the Majlis. He haspower as the leaderational movement which haspopular support. This circumstance has caused thenominate him to the Shah and compelled the Shah to appoint himFundamentally his strength derives from, and is into, the intensity of feeling against the British over theAlthough other critical problems will plague hisare not likely to cause his downfall so long as the oila burning issue. Mossadeq's campaign against the AIOCthe support not only of his National Front group but also ofIslama liter ror ist group of religious fanatics whofor Razmara'she illegal Tudehand probably the great majority of Iran's laborers,and students, who can significantly affect political developments
in Iran through strikes, demonstrations, and violence. Roth the Fedayan Islam and the Tudeh Party, however, are constantly attempting to coerce Mossadeq Into adopting more extreme measures against Western interests, Fedayan Islam has apparently unseated Its more moderate leader and has threatened Mossadeq's life. Meanwhile, the Tudeh Party has gone beyond nationalization of the oil industry to demand ousting of the US military mission, refusal of US arms assistance, and closer relations with the USSR.
Because of the wide support for Mossadeq's chauvinistic crusade, few Iranian leaders dared oppose him publicly. His Influence in the Majlis was largely responsible for Razmara's failure toevised AIOC agreement and loans from the Export-Import Bank and the IBRD. He condoned the assassination of Razmara on the grounds that the latter was traitorously lenient ln his negotiations with tho AIOC. Finally, he pushed the oil nationalization bills through the Majlis against the wishes of the Shah and Prime Minister Ala. Many of the Majlis deputies probably voted.for tho measures against their better Judgment,to the emotionalism of Mossadeq's appeal or fearing the(possibly Including assassination) of opposing the measure.
When Hussein Ala was Prime Minister. Mossadeq was chairman of the Majlis Oil Commission appointed to draw up recommendations for taking over the AIOC installations. Tbe Shah, Prime Minister Ala, and moderate members of the Majlis probably hoped that somecould be patched up with the AIOC before Mossadeq couldhis work. Mossadeq, however, reported to the Majlis moreonth ahead of schedule. Increased bitterness toward the UK,by the intervening strikes and violence in the oil field area, kept emotions high throughout the country and simplified Mossadeq's job in obtaining prompt Majlis approval for his recommendations. The new law setsovernment committee to act as trustee for the oiluntil an Iranian Company can be established and provides for setting asideercent of oil revenues to meet future claims of the "formerossadeq's precipitate move to force action on the oil issue resulted in the immediate resignation of Ala.
Although the responsibilities of office may to some extent actobering Influence on Mossadeq. he will almost certainly attempt to implement the nationalization law and gain effective control of the oil installations in southern Iran. He might be willing to conclude acontract with AIOC, under which the latter would operate the oil installations under the direction of an Iranian company. However, be would probably prefer to obtain tbe technical assistance Iran needs by means of separate contracts with individual specialists. If, In fact, Mossadeq is able toettlement with the AIOC which willincrease Iran's oil revenues and provide for Iranianof the oil installations, he will have achieved his purpose.his prestige would be high, his position would probably be rapidly weakened by any considerable decline of anti-British feeling or by his inability to copo with Iran's fundamental economic and social problems. There Is some danger that he might attempt to maintain himself in power by turning his chauvinistic crusade against the US. He might even refuse to accept further US military aid and request the US military missions to leave the country.
In view of the fact that both Iran and the UKery great interest in the uninterrupted production of Iranianeal effort will undoubtedly be made toompromise settlement.in view of the attitude of bothettlement can probably be reached only with great difficulty.man Oilhas already threatened to revoke the residence permits of AIOC's foreign staff unless the AIOC turns over Its oil installations
to the Iranian Government. The UK has taken the position that Iran has no right unilaterally to abrogate its contract with AIOC and, therefore, no right to expropriate the oil Installations under the guise ofThe UK has proposed the establishmentew Britishto run operations in Iran, which would include Iranians on the board of directors; equal sharing of profits;rogressive Increase in the number of Iranians employed by the company. Mossadeq will undoubtedly turn down this offer, for it manifestly fails to meet the requirements of the oil nationalization law. The proposal certainly does not represent the final British position.erious danger exists that critical developments will occur before the parties, particularly the British, have sufficiently modified their respective positions to permit Initiation of genuine negotiations.
he present impasse in the oil situation may lead to any one or more of the following critical situations:
is committedolicy of expropriation. Onof his past actions, it is extremely unlikely that he willless than effective Iranian control of the oil Industry.If there is no early relaxation of the British position,probably attempt to take physical possession of tho oiloven at the risk of closing down the whole Industry.
UK has Indicated that it will not employ force inprior consultation wilh the US. It is unlikely that the UKIts troops into the oil field area to forestall or counterthe oil Installations by the Iranian Government, but the UKmight land troops in Iran for the actual or alleged purpose ofBritish lives and property In the event of further violenceThe British Government Is under public pressure to adopt
a strong policy against Iran, and British officials have Indicated that they will have to consider very seriously resorting to military force If Iran uniiateraUy seizes the oil Installations. If British troops landed ln southern Iran and Iranian forces were already In tho area or were subsequently sent into the area, for whatever roason, there might be clashes between British and Iranian troops with Inevitable serious consequences, probably Including an Interruption in the flow of oil. Moreover, the landing of British troops in southern Iran might be taken by the USSRretext for sending troops Into northern Iran.
feeling will remain strong, and the dangerand violence will continue. Mossadeq hasmartial law and restrictions on the freedom of speech,the press. One of his first acts ln office was toanDay demonstrations in Tehran, and martial law may soon be lifted
ln the Abadan area. Furthermore, although the Tudeh Party has begun to attack Mossadeq, he may yield to its demand for legal status. Thereanger that the Tudeh Party may attempt to take advantage of Mossadeq's leniency to foment disturbances throughout the country and that Mossadeq will be unwilling to use Iranian armed forces to maintain
order. In view of the tension and general unrest in the country, Tudeh activity might seriously undermine internal security.
d. If Mossadeq takes physical possession of the oil installations, he will undoubtedly seek foreign assistance in operating the oilumber of US oil companies have already shown some interest in the situation, and Mossadeq might well be able to persuade some company to operate in Iran on his terms.evelopment would createBritish antagonism against the US. There isossibility that Mossadeq might attempt to obtain Soviet specialists to run the oil installations.
here Is little doubt that sooner or later efforts will be made by the British, the Shah, and deputies In the Majlis to undermine Mossadeq's position. However, In view of Mossadeq's popular backing, it is unlikely that the Shah and the Majlis would dare oppose him while tension over the oil issue remains high. Mossadeq is more likely to force the oil issue by extreme action than permit himself to beby the Shah and the Majlis on other internal issues. It isunlikely that Mossadeq can be overthrown during this critical period except by violence or by the establishmentemi-dictatorial regime under the aegis of the Shah.ourse of action would Involve risks which the Shah has thus far shown no willingness to take.
Original document.
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