Iran's 1933 Oil Concession – Myths and Realities
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In 1901 William Knox D’Arcy, a British citizen, obtained a sixty-year concession to exploit Iran’s potential oil resources. Six years later, in 1907, the arduous exploration efforts paid off and oil was discovered. Within two years, the Anglo-Persian Oil Company was established (later Anglo-Iranian Oil Company, and subsequently British Petroleum) to produce and bring the oil to world markets. Disagreements arose soon about the method of calculating, and the level of, royalties payable to the Iranian Government. Repeated efforts failed to clarify and retrofit the concession to the satisfaction of both sides. Then in 1932, Iran unilaterally canceled the concession, resulting in a stand-off between Iran and Great Britain at the League of Nations and the Permanent Court of Justice. A new agreement was reached in 1933 that addressed many of Iran's demands while extending the concession for another sixty years, the latter leading many to criticize the deal and using it as an important pretext for the 1951 nationalization. What this agreement did or did not entail is essential for understanding the events that later shaped a critical turning point in Iran’s history. This session will delve into Iran’s risk and reward trade-offs in light of Iran’s bargaining power at the time, and within the prevailing global and domestic economic conditions and the structure of the oil industry.
Nadereh Chamlou is a former Senior Advisor of the World Bank, where she held technical, coordination, managerial, and advisory functions in diverse fields such as economic management, Corporate Governance, private sector development, financial markets, environment, and infrastructure. Her experience extends to Latin America, East Asia, Europe, and Middle East and North Africa. She has authored seminal publications and serves now on boards of several organizations promoting research, advocacy, empowerment, and innovation. She attended Georgetown University’s School of Foreign Service and Graduate School for Economics. She is the recipient of The International Alliance for Women’s 2015 “Making a Difference” global award.