Devious Dealings And Dire Threats – Iran, The EU And The Petro-dollar – Anglo-US Brinkmanship
By William Bowles
08 February 2006
Introduction: I first published the essay reproduced below (Iran: First it was ‘October Surprise’ – now it’s No Surprise) back in June, 2003 and dug it up whilst doing research on this essay on the latest saga involving the most devious ruling classes of modern times, the US and the UK and I think it deserves a re-issue. It requires no modification and I think it exposes the kind of thinking behind the current situation and the fact that nothing has changed except the modus operandi.
However, in the light of the latest hysterical propaganda offensive of the imperialist powers about Iran’s ‘nuclear threat’ and the dire pronouncements of many on the left about an impending strike on Iran, I think it’s worth digging more deeply into the underlying economics of the role Iran has played for more than a century in the affairs of the US and the UK.
Firstly, for anyone trying to figure out what is going on right now, I think it is important to separate public pronouncements, or propaganda to give them their correct description, from the reality that lies behind them. So for example, much as been made of Russia’s apparent backing for the US/UK position on dragging Iran before UNSEC when the reality is that this how the major western media have presented the Russian/Chinese position to their publics in order to make it appear as if there is some kind of wide-reaching ‘international community’ behind the Anglo-US position.
In reality, the apparent Russian/Chinese backing for the Anglo-US position is actually nothing of the sort. All they have agreed to do is for UNSEC to discuss the issue, which is another way of actually deferring a decision. In the meantime, all kinds of behind-the-scenes deals will be going on.
But there is no doubt that some sort of quid pro quo over access to Iraqi oil fields has been offered to Russia and to which is connected Israel’s long sought-after access to Iraqi oil (see the story, Lukoil To Replace Halliburton in Iraq, and the contract signed between pre-invasion Iraq and Russia now apparently to be honoured by the US occupation. Also relevant is the CEO of Lukoil’s recent visit to Israel).
However, a short review of Iran’s nuclear power programme is in order as I think it illustrates a number of factors relevant to the current situation and what is undoubtedly the common thread linking the current situation to the history of the West’s devious dealings with Iran—the petro-dollar and need for the US/UK alliance to maintain control not only of oil but of the trading mechanisms through which they control the planet’s economy.
Iran’s nuclear power programme
By 1978 Iran had the fourth largest nuclear power programme in the world and the largest by far among Third World nations. The [then] Shah’s plan called for the installation of 20 nuclear power reactors by 1995, to provide some 23,000 megawatts of electricity. The Shah saw nuclear electricity as the rational means to diversify Iran’s dependence on petroleum, and as a means to counter the enormous pressure from Washington and London to recycle his petrodollars to New York and London banks.
The contracts were made not with US corporations but with German and French companies, and the US government—which up until this time had been the Shah’s main backer and had installed him following the US/UK overthrow of the anti-US Mossadegh government, did everything in its power to try and block the deals—not surprising considering the role of Iranian oil in the US economy and continuing the hegemony of the petro-dollar.
We must not lose sight of the fact that since the late 19th century, Iran’s vast oil reserves, at first the exclusive domain of British imperialism and its joint government-business owned company, British Petroleum, and later the US when it took over the reigns of empire, has been the major motivating force behind Anglo-US machinations in the region.
The question to ask is why the Shah Pavlevi should have fallen out of favour with his Anglo-US sponsors? To answer this question we have to look at the central role of the petro-dollar in propping up Anglo-US imperialism.
There is no doubt that the US and the UK were behind the removal of the Shah. The problem for the USUK was that the leading force inside Iran working to remove the Shah were progressives, led largely by the Iranian Socialist Workers’ Party. Therefore,
In November 1978, President Carter named the Bilderberg group’s George Ball, another member of the Trilateral Commission, to head a special White House Iran task force under the National Security Council’s Brzezinski. Ball recommended that Washington drop support for the Shah of Iran and support the fundamentalist Islamic opposition of Ayotollah Khomeini.
Their scheme was based on a detailed study of the phenomenon of Islamic fundamentalism, as presented by British Islamic expert, Dr. Bernard Lewis … Lewis’s scheme was unveiled at the May 1979 Bilderberg meeting in Austria, endorsed the radical Muslim Brotherhood movement behind Khomeini, in order to promote balkanisation of the entire Muslim Near East along tribal and religious lines… The chaos would spread in what he termed an ‘Arc of Crisis,’ which would spill over into the Muslim regions of the Soviet Union.
The coup against the Shah, like that against Mossadegh in 1953, was run by British and American intelligence, with the bombastic American, Brzezinski, taking public ‘credit’ for getting rid of the ‘corrupt’ Shah, while the British characteristically remained safely in the background.
The major reason for removing the Shah was the oil. During 1978 negotiations were underway between British Petroleum and the Shah to renew the 25-year old extraction contract, negotiations which collapsed and with the collapse, Iran was for the first time since 1953, once more in control of its oil resources. Cross the imperium and experience their wrath.
In September 1978, the Iranian publication Kayhan International stated in its editorial
In retrospect, the 25-year partnership the [British Petroleum] consortium and the 50-year relationship with British Petroleum which preceded it, have not been satisfactory ones for Iran … Looking to the future, NIOC [National Iranian Oil Company] should plan to handle all operations by itself.
The British retaliated by cutting the amount of oil they bought from Iran by 2 million barrels a day. At the same time it is alleged that British Petroleum was organising capital flight from the country and the BBC, through its Farsi service, gave Ayotollah Khomeini a major propaganda platform. The Iranian economy was in dire straights and in January 1979, the Shah went into exile and in February the Ayotollah was flown in from exile in Paris. In May 1979 Khomeini cancelled the nuclear power programme.
As a result Iran was once more totally dependent on the sale of oil to the West, for what was and still is, at stake here, is the right of developing countries to pursue an independent course.
We can learn much from this period, especially the relationship between the EU and the Anglo-US alliance. Then as now, the underlying issue was the parlous state of the US economy and its total dependence on the petro-dollar. I contend therefore that the real issue is not whether the US will attack Iran but ensuring the continued dominance of the petro-dollar.
Then as now, we saw increasing trade ties between Iran and the EU, a relationship that threatened the US economy. One method for countering the competition was to engineer a confrontation and once more, it’s Anglo-US control of the oil market that has been used a weapon to force the leading European economies, France and Germany, to fall into line behind the US.
As usual, the UK have played a devious double game; on the one hand, maintaining close trade ties with Iran and on the other acting as the rottweiler for US strategic objectives. We must never lose sight of the fact that although the UK is a member of the EU, it is also the world’s No.2 oil trading nation, with the 2nd and 3rd largest oil companies, Shell and BP, (which by the way, have investments in Lukoil, now the world’s 6th largest oil company).
Ideally of course, the US would like to re-establish direct ownership of Iranian oil resources as they have done in Iraq but failing that, maintaining the petro-dollar as the fiat currency is the only method it has for continuing its control of the world’s economy and forcing the EU and its other competitors into line.
The last thing the EU want is the US (or its other rottweiler, Israel) attacking Iran, thus it is in their interests to put as much pressure on Iran as they can, or see their own economies go down the tubes. Will this involve pressuring Iran to drop its plans for establishing a Euro-Bourse? Thus the furore over Iran’s ‘nuclear ambitions’ is nothing but a smokescreen to mask the real objectives of the US. Will the threat of military action do the trick? My own feeling is that the US are pulling a dangerous bluff, the question is, will the Iranian ruling class call it?
1. A Century of War – Anglo-American Oil Politics and the New World Order, William Engdahl, Pluto Press, Second Ed. 2004.
2. op cit
3. op cit
This articles was published in Investigating New Imperialism