ABSTRACT
The 1960s was the decade of massive economic reconstruction and reform in many oil-producing countries. In Iran, following a decade of vigorous urban middle-class social protests and labor militancy, Iranian oil was nationalized in 1951. However, the jubilance around the nationalization did not last long. In the following decade the country experienced an arduous period of economic stagnation and political repression. Both the coup of 1953 and the denationalization of the management in the oil industry in 1954 were major architects of this repression and stagnation. The drastic fall in Iranian oil revenues by 55 percent at the end of the 1950s paved the way for a serious economic crisis, causing social grievances amongst industrial workers as well as the laboring poor. Moreover, the 13 percent fall in the Iranian oil price in 1960 brought the country to the edge of total economic collapse. While the Iranian government welcomed the foundation of the Organization of Petroleum-Exporting Countries (OPEC) in 1960, the reconstruction and reform of the country’s economy became the major item on the agenda of the new technocrats and nomenklatura that gradually replaced the older generation of the politicians and bureaucrats.
The introduction of the Third Development Plan (1962–1967) in Iran, associated with the Shah of Iran’s grand reform scheme known as the White Revolution, boosted the share of oil income to the country’s economic development by some 89 percent. The need for such a contribution of the oil revenue to the country’s economic reconstruction encouraged Iran to adopt a new stand towards the recently founded OPEC, a stand chiefly remembered as vigorous.
This paper, which is largely based on Iranian archives, personal notes and interviews with leading minsters and managers in the Iranian oil and financial establishment of 1960s and 1970s, intends to revisit the early history of OPEC through the prism of a general outline of the economic development of one of its member states. An alternative to the conventional historiography of OPEC, which confines its study to surveying state–state and state–oil companies’ interactions, this paper aims to bring the history of OPEC within the larger context of the economic and political history of one of its founding members.
