ABSTRACT
The Anglo-Iranian Oil Company (AIOC) had been exploiting Iranian oil since the beginning of the century. This cheap oil was of immense importance to the Royal Navy, which had converted from coal just before World War I. The leadership of AIOC failed to understand the nationalist spirit of postwar Iran. More foresight on their part could have saved the United States, Britain, and Iran from a sea of troubles, certainly from Muhammad Mussadiq and perhaps even from Ayatollah Khomeini. The United States viewed the oil crisis with alarm, not out of sympathy for the AIOC but out of fear that chaos and economic collapse in Iran could lead to a Tudeh takeover. Mussadiq's resignation on July 1952 was precipitated by the Reza Shah Pahlavi's refusal to agree to his prime minister's request for control of the armed forces, which constituted the shah's principal source of influence.
