(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79S01011A000500020023-8
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 9, 2016
• Document Release Date: April 3, 2000
• Sequence Number: 23
• Publication Date: August 22, 1951
• Content Type: REPORT

Approved For Release 2000/08/2 ?.. t - - . 9SII1011A0.500020023-8
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22.~ugust 191
There are now strong indications that the Iranian Government is
determined to nationalize Iran~s petroleum industry under conditions
that will force the complete withdrawal of the Ang1o-Iranian pil
Company and all British personnel. It is by no means certain that the
Iranian economy would collapse as a result of such a withdrawal, but it
is clear that the danger of ultimate affiliation w.~.th the SOViet $lOC
would substantially increase.
Iran could weather the ensuing difficulties without accepting
Soviet assistance if the course of events-were determined by economic
.factors alone. Yfithout assistance from any other goverrnnents Iran
probably could within a year acquire sufficient technical personnel,
tanker services, markets, anal marketing facilities to produce, transport,
and sell refined petroleum products at an annual rate of 3 to 1~ million
metric tons' about 12 to 15 percent of the. current annual rate. While
gross receipts from the sale of oil would drop by 85 to 9? percent, the
net gains to Iran would be only slightly less favorable than at present
since British profits and other income to non-Iranians currently siphon
off 7d to 80 percent of the gross receipts. The net revenue to the Iranian
Government would actually be higher than the present level. although foreign?
exchange receipts and national inecane would decline somewhat, both problems
could be met by measures that would not cause critical suffering. ~7oreover,
Iran has sufficient reserves of gold and foreign exchange to cushion the
decline in revenues during the transitional periods perhaps a year or
Q~l~f?~!~~NT P; O.
longer, in which oil operat~.ons would be at a standstill ~~ ~~a~~r ors class, ^
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CONFIDENTIAL
It would be a mistake, however, to forecast developments in Iran
solely on the basis of economic factors. A iiritish withdrawal is likely
to lead directly and indirectly to serious distx~bances that could
underrai,.ne internal stability. Fczonoanic policies might be shaped by
emotion more-than by cool reasoning, Industrial workers unemployed as
a result of nationalization would resent the inequitable sacrifice borne
by them. P'rabable inflation would generate its familiar discontents.
Widespread dissatisfaction would probably fallow upon failure to
accomplish the impressive results expected from nationalization. These
factors might spur the Iranian Government to seek relief, albeit illusory,
by dealing with the Soviet Bloc. Finally, the Tudeh (Iranian Ccanmunist}
Party, swell-disciplined organization, would not hesitate. to exploit
these opportunities to fceaent disorder and attendant economic and political.
disintegration. Hence it is not at all certain that Iran, i.f ~oresd~~
~ ~
a hostile West, could avoid gradual absorption into the Soviet Orbit.
CONFIDENTIAL
Approved For Release 2000/08/ ~ , DP79S01011A000500020023-8