IRANIAN DEVELOPMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A000100020054-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 19, 2016
• Document Release Date: October 13, 2005
• Sequence Number: 54
• Publication Date: July 6, 1951
• Content Type: MF

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CONFI EN AI
CENTRAL INTEL IGENCE AGENCY
OFFICE OF NATIONAL ESTIMATES
6 July 1951
MEMORANDUM FOR THE DIRECTOR OF CENTRAL INTELLIGENCE
SUBJECT: Iranian Developments
to There is a serious danger that, unless the UK or the US
adopt policies which will maintain the flow of Iranian oil to the
West,, Iran will be forced to turn to the USSR for assistance or will
suffer an economic collapsed In either case,, Iran would probably
come under Communist domination within a few monthso
20 At the present time the UK appears to be prepared to close
down the AIOC installations in Iran, withdraw all British personnel
from Iran, and boycott Iranian oil rather than submit to Iran8s termed
It is unlikely that these tactics will induce Iran to accept a com-.
promise settlemento
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oil industry were shut down completely for any length of times Iran
would find it almost impossible to recapture its former markets4
Iran's crude oil could be replaced almost immediately by expansion
in other fields and its refined products after about six months by
building other refineries in Western Europe.
4. If Iran cannot sell its oil to the Western world., it might
turn to the USSR for assistance. Because of transportation diffi-
cultiess the USSR could probably not for some time use more than a
small proportion of Iran's potential production. However., with
Russian technicians in the southern oilfields., Iran would be lost
to the West; and the consolidation of Iran as a Soviet Satellite
would be only a matter of.timeo
5o The current US policy* of supporting the Shahs extending
military, economics and technical assistance., and bringing our influ-
ence to bear on Iran and the UK in the oil controversy appears hardly
adequate to the situation. If Iran's stability (and therefore its
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vulnerability to Communist pressure) depends on the continued flow
of its oil to the west, US policy-makers are confronted with the
following critical questionsa
(a) Can we afford to let the British abandon Iran and
permit the oil industry to close down knowing that
even under ideal circumstances it will take several
months to revive it and that in the meantime Iran a nay
be forced to turn to the USSR for assistance or may
collapse internally?
(b) If, as now seems probable, the British leave Iran,
how long can we permit Mossadeq to "starin his own
juice" before coming to his assistance?
(a) Is it in our interest to assist Iran to maintain its
oil industry,, even if such assistance has to be ex-
tended on MossadegVs present terms?
(d) Are Mossadeges present terms in fact completely unrea-
sonable and uneconomic from the point of view of a
foreign concessionaire?
(e) If they are, is it in the interest of the US to sub?
sidize a US oil company to operate Iran's oil industry?
-3m
-NMMr
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Cr)
Would it be better to adopt such a course of action
than to be compelled at a subsequent date to use
force in Iran to put down a Communist uprising?
5Q All these questions raise serious problems
The time appears to be rapidly approaching, however,
when they will have to be answered unless the West is prepared tot
(1) fight to retain in Iran what it appears unable to retain by nego-
tiation; or (2) abandon Iran to Communismo
WILLIAM L. LANG ER
Assistant Director
National Estimates
-Sam
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