A torn-out contract, a paranoid shah, and Iran’s most lucrative resource. With Iran’s oil deal up for renewal, Reza Shah clashes with the British and grows suspicious of his closest allies.

Follow us on Instagram, TikTok or X (Twitter).

Support this show on Patreon.

Additional listening: APOC (Book one – Ep.3):

In the early 20th century, Iran’s oil reserves became the center of a power struggle between the Iranian government and the British-controlled Anglo-Persian Oil Company (APOC). The original agreement granting Britain access to Iran’s oil, signed in 1901 under Mozaffar al-Din Shah, had long been a source of resentment. Over time, British companies manipulated accounting practices to minimize Iran’s profits. This left the Iranian government with a fraction of what it was owed.

By the 1920s, a new power had emerged in Iran: Reza Khan. He was a military leader who, after consolidating his rule, became Reza Shah. With ambitious plans to modernize and strengthen Iran, he sought to renegotiate the oil agreement. He wanted to secure more revenue for the country. His most trusted minister, Abdolhossein Teymourtash, led the negotiations with the British. He demanded a greater share of profits and a more equitable deal.

However, the British, now a global superpower with diversified oil sources, were unwilling to make meaningful concessions. Thus, negotiations stalled, and tensions between Reza Shah and Teymourtash grew. In 1932, frustrated by the lack of progress, Reza Shah abruptly ended the discussions by burning the oil agreement and expelling Teymourtash from his government.

This led to a fresh round of negotiations, with the British bypassing Iran’s ministers and appealing directly to Reza Shah. In a surprising turn, the Shah, who had built his image on resisting foreign exploitation, accepted nearly all of Britain’s demands. Although Iran’s share of profits was slightly increased, the British continued to manipulate their financial reporting through the AIOC company, ensuring that the fundamental imbalance remained unchanged.

Despite the disappointing outcome, state propaganda portrayed the agreement as a victory, claiming that Iran had regained its dignity. But in reality, little had changed—the country remained bound to a colonial oil contract. This time under the name of Anglo-Iranian Oil Company. (AIOC)

The post Book Two – Ep.4: AIOC appeared first on The Lion and The Sun Podcast.