In the waning days of 1997, Iran struck it rich. President Mohammed Khatami opened the first gas pipeline from Turkmenistan to Iran. Until four years ago, Turkmenistan's natural gas was exported to Europe through pipelines controlled by Russia. In 1993, however, Russia shut off its pipelines asserting of its Soviet-era domination of the Caspian Sea Basin. That act by Russia left Turkmenistan starved for cash. Two days earlier, President Khatami and the Turkish Prime Minister Mesut Wilmaz, endorsed plans by Royal Dutch Shell to study the feasibility of a 940mile, $1.6 billion natural gas pipeline from Turkmenistan, crossing Iran and ending in Turkey. France's Total SA has already signed a $2 billion deal to develop Iran's huge South Pars gas field. These in-your-face deals by Total SA and Royal Dutch Shell have clearly weakened sanctions. Expect more denials from Washington that a particular deal violates the Iran-Libyan Sanctions Act. At the end of the millennium, one of the real dangers to be found in Iran is its persistent attempt to buy or steal nuclear technology and missiles to launch a Russian-made nuclear weapon, probably at Israel. Despite the partial embargo, Iran has enough loose money to either buy the components or use foreign experts to assemble one or more nuclear weapons. Furthermore, Iran sponsors terrorism, and the mere possession of one of these weapons of mass destruction would play out as nuclear blackmail. Prime Minister Victor Chernomyrdin of Russia and Vice-President Al Gore of the United States both agree that Iran was making a vigorous effort to acquire the critical components of nuclear weapons and missiles to launch them. Ruses have denied their country is selling the technology to Iran, but nonproliferation experts said the larger problem was with the vast, unprotected military-industry complex. In other words, the Russians don't have anything even close to an accurate inventory of weapons grade plutonium or uranium. These radioactive materials could once have been found in Russian research facilities, fabrication plants, and storage facilities, but many so-called "suitcase-size nukes" have simply disappeared. Currently in 1997, Russia was helping Iran build a nuclear power plant near Bushehr in Iran. Bushehr is located on the Persian Gulf, not far from Iran's border with Iraq. Elections in Iran may ease the way toward establishing better relations with the United States. Its unilateral sanctions have not been successful, and its friends in Europe resent accepting this aspect of American policy in the Middle East. An independent and economically accessible Central Asia is in the best interests of the United States, and major American oil companies may have to deal with Iran as more stable for any alternative pipeline route. The French oil company, Total, has signed a $2 billion contract with Iran, and President has foolishly said he will apply the sanctions of the Iran-Libya Sanctions Act to this contract. It is rather difficult to determine just what the Clinton Administration might do without jeopardizing relations with France. That country will simply not accept any claim that Washington may export its policy by interfering with one of France's domestic oil companies in dealing with Iran.

Iran

On May 25, 1997 Iranians went to the polls in record numbers. When the votes for president were counted, Mohammed Khatemi had won with some 60 percent of all votes cast. Khatemi is thought to be a moderate Muslim, and he is unlikely to have enough power to change the system. Indeed, he won't even try. Iranian authorities seemed to believe that the vote was not to change the system, but only to establish an environment for new ideas and new people, and a more responsive government. Ultimate authority will continue with Iran's religious leader, Ayatollah Ali Khamenei. The outgoing president Hashemi Rafsanjani must step down because he may only serve two terms. However, he will retain great influence as head of a newly-expanded Expediency Council. The Council of Guardians will continue its role screening candidates for Parliament and the presidency. For all his revolutionary credentials, Khatemi, a Shiite Muslim, is considered a relative liberal whose election could presage a gradual warming of relations with the West. If so, the incidents like that in Berlin might end.

On April 10, 1997 Bonn, the capital of the Federal Republic of Germany sent a telefax to its consulates around the world. In part it stated:

The German Government is greatly dismayed by the Berlin Court's determination regarding the participation of Iranian government bodies in the crime committed in the Mykonos trial. These determinations, which were made by an independent German court, must be taken into serious consideration in Germany's assessment of its relations with Iran. The participation of Iranian government bodies in this crime, as established in the opinion of the court, represents a flagrant violation of international law. Such conduct in the sphere of international relations is unacceptable. The German Government therefore prevails upon the Iranian Government to abide strictly by the rules of international law.

Two weeks after the so-called Mykonos Affair, in which four Kurds were shot and killed in Berlin's Mykonos Cafe, ended with exchanges at all levels. The assassins were Iranians acting with the approval of the highest level officials in Teheran. The rapid disposition of this affair suggests that the United States might profitably discuss the end of sanctions against Iran that have accomplished no valid American policy initiative and may do its legitimate policy objectives a great deal of damage. Zbigniew Brzezinski, Brent Scowcroft, and Richard Murphy have written an article in Foreign Affairs for May/ June, 1997, in which all three make the same point. The dual containment of Iran and Iraq in the Middle East has simply not worked. Six years after the end of the Persian Gulf War, Saddam Hussein is still in power, and the international consensus on continuing the containment of Iraq has frayed noticeably. The strident campaign of the United States to isolate Iran has driven Iran and Russia together, and the United States and its Group of Seven allies apart. And the presence of American military units for the express purpose of helping the Gulf Cooperation (GCC) from external threats has been exploited by hostile elements to take advantage of internal social, economic and political problems, not the least of which is the growth of fundamentalist Islam. In 1996, the Congress enacted and President Clinton signed the Iran and Libya Sanctions Act of 1996. The United States imposed sanctions unilaterally and no European country supports them. The Clinton Administration should sit down with its allies in the Middle East, Europe, Japan and define what each other's interests really are. Only such high-level consultation may produce policies toward Iran that stand a good chance of being sustainable. Washington should do nothing to preclude Central Asia's eventual access to pipeline routes carrying oil to the West. So far, Washington has said the Iran Libya Sanctions Act does not apply to a natural gas pipeline that passes through part of Iran with natural gas going from Turkmenistan to Turkey.

Over the last seventeen years, the United States has sought to contain Iran's aggressive behavior, including its military buildup, development of weapons of mass destruction and support for international terrorism. This policy had been implemented by a series of measures, including Executive Order No. 12959, 60 Fed. Reg. 24757 (1995) which imposed a virtually absolute embargo on trade with Iran. After issuing this Executive Order, the Clinton Administration tried to convince our Western allies to take similar action. Its efforts in this regard were a complete failure. Indeed, despite vigorous U.S. protests, a French oil company, Total, reached an agreement to develop Iranian oil fields off the coast of Sirri Island. The French company displaced a major American oil company, Conoco. Not to be politically outdone, a Republican controlled Congress enacted the Libya and Iran Sanctions Act of 1996 and signed by Clinton on August 5, 1996. He used the occasion to deliver an address entitled "American Security in a Changing World." The act requires the President to impose two or more of six listed sanctions if he determines that a "U.S. person" with actual knowledge has made an investment of $40 million or more that "directly and significantly contributed to the enhancement" of Iran's ability to develop its petroleum resources. The Libya and Iran Sanctions Act and the Helms-Burton Act both represent Congressional attempts to interfere with the constitutional power of the president to make and execute foreign policy. Our major trading partners irritated by Republican posturing have initiated complaints against the United States, utilizing the dispute mechanism of the World Trade Organization and the North American Free Trade Association. This dispute has so far obscured the sound policy of reestablishing relations with Iran since America's relations with Iran ended in 1979. Students of history may want to see how the United States managed to lose control of its own foreign policy with the help of a Democratic president. Were the president to conclude that establishing relations with Iran -- this country elected a new president in May, 1997 -- he would need to have the support of all the nations of the Gulf Coordinating Council. Present U.S. policies have not been effective:

The policy of unilateral U.S. sanctions against Iran has been ineffectual, and the attempt to coerce others into following America's lead has been a mistake. Extraterritorial bullying has generated needless friction between the United States and its chief allies and threatened the international free trade order that America has promoted for so many decades. To repair the damage and avoid further self-inflicted wounds, the United States should sit down with the Europeans, the Japanese, and its Gulf allies and hash out what each other's interests are, and how policy disagreements should be handled. Only high-level consultation can yield multilateral policies toward Iran that stand a good chance of achieving their goals and being sustainable over the long term.

Iran, once known as Persia, is an Islamic Republic ruled by mullahs with no secular training. Ali Akbar Hashemi Rafsanjani, for example, was born in 1934 and left home in 1948 to study theology in Qom. He followed Ayatollah Khomeini into politics in 1963, joining the pantheon of clerics opposed to Muhammad Reza Shah. Americans have a special memory of Khomeini. He inspired the revolution that left the Embassy of the United States in Teheran occupied by fanatic Shia students and fifty-two Americans as hostages, all embassy personnel, who were not released until January 20, 1981, moments after Reagan was sworn in as the new president. President Jimmy Carter was loathed by the clerics of Iran. He had given shelter to the dying Shah, and America, as well as some European powers, were the great Satans of the Western world. Ayatollah Ruhollah Khomeini may have defined the shape of the Islamic revolution in Iran, but he had the help of the entire population; opposition to the revolution had been crushed soon after the occupation of the American embassy. Khomenini died in 1989, and he was replaced by Ali Khamenei, another of the clerics of Qom who acted with Khomenini and joined in his defiance of the Shah. Rafsanjani was a pragmatist, but state-sponsored pragmatism was not enough. Iran desperately needed cash to finance its revolution, and America was not going to help Iran get it.

The second oil shock occurred in 1980 -- the first had occurred in 1974 -- and the price of oil rocketed up to about $40 a barrel. American drivers began looking for more fuel-efficient cars, and Europeans merely paid the new price and hoped for relief. When fanatic students occupied the Teheran embassy, the United States froze Iran's assets and the process of freeing these assets from liens seemed a never-ending process. In 1993, Rafsanjani mobilized the technocrats and Iranians living abroad who had the professional education essential to operate a government. They were particularly important as Iranians to operate the oil industry from the wellhead to the port from which oil was exported, Abadan. The factors that led to the destruction of Abadan were all present at the outbreak of war between Iran and Iraq and in fact were responsible for this war. Saddam Hussein had conspired and murdered his way to the top of Iraq's government. Hussein saw a neighboring country where the population was 100 percent Shia, while Iraq was only 60 percent. However, Khomenini was exporting revolution, and Hussein did not like the possibility of religious fallout in Iraq. Hussein also saw that Iran had not one, but two revolutions, the Shia uprising against the Shah and the raging dispute between the clerics and the secular population..Husssein saw the possibility of a holy war financed by Iranian oil. His territorial ambitions plus the religious fanaticism on both sides collided, and a war that ended in 1988 began. The United States sided with Iraq and domestic companies got Department of Commerce permits to export dual-use hardware, i.e., weapons to Iraq. These weapons were later used against American troops in the Persian Gulf War in 1990 and 1991.

Ever since Great Britain became Iran's major employer, local politicians were obliged to show their hatred of the British. Division of payments for oil were never fair to the Iranians. Between 1945 and 1950, for example, Anglo Iranian Oil Company registered a £250 million profit, compared to Iran's £90 million in oil royalties. A substantial part of the company's dividends went to its British owner, the British government. So it wasn't difficult to mobilize the Iranian masses in a spasm of hatred of the British for making a profit on Iranian oil. The masses had other festering grievances, mostly religious, that the clerics could exploit.. In 1951, Mohammad Mossadegh was chairman of the Majlis oil committee.

For this reason, Iran nationalized the Anglo-Iranian Oil Company in 1951, a move that included the world's largest refinery at Abadan on the Persian Gulf. By 1954, the political situation had changed. The members of the new consortium retained the name of the company, but gave it a foreign cast of members to conceal the fact that the British would still own 40 percent of the consortium. The National Iranian Oil Company has been the company that was formed in 1951 to operate the assets acquired by Iran when it nationalized the oil company. A wily member of the Iranian parliament, or Majlis, Mohammed Mossadegh was the catalyst of nationalization, and he nearly precipitated violence. Truman and then Eisenhower saw Mossadegh as someone strong enough to keep the Communists at bay, but the British saw this as an inflated fear of Communism. Mossadegh was a Moslem cleric and not even close to Soviet-style Communism. Pursuing nationalization was Mossadegh's answer to foreign ownership of Iranian oil.

Some respected oil geologists suggest that world oil as of 1996 will be completely depleted by 2040, forty-four years into the future. This gloomy prediction probably did not include oil from the Caucasus with Azerbaijan, Kazakhstan, and the oil fields of the Caspian Sea Basin. Iran cannot appear in any historical perspective without reference to this contention. Geologists have been wrong before, and one need only mention Prudhoe Bay, Alaska, North Sea oil and Libyan oil discovered after influential writers had said the world was headed for an oil shortage. The world's major oil companies were always looking for countries with both oil and political and/or economic stability. In the aftermath of World War I, Great Britain, the United States and the Netherlands produced the world's largest oil companies, and their postwar concessions were a form of colonialism. Gradually, however, Iranian nationalism and the religious faithful of Muslim united to reduce the control of their oil by foreign oil companies. A brief history of Iran puts today's Iran in relation to its past.

In the mid11th century, Iran was conquered by the Seljuk Turks under Togrul Beg. In the four centuries that followed Iran was dominated successively by the Seljuks, the Mongols under Genghis Khan and later by Timurlane and his Mongol hordes, and finally by Turkomans. Their rule was ended by Ismail I, who claimed descent from Ali, the fourth caliph. He was regarded as a saint by the Iranians and proclaimed himself shah, marking the founding of the Safavid dynasty (15021763) and the establishment of the Shiite doctrine as the official Iranian religion. The rule of Ismail lasted until the Ottoman Turks took over and captured Baghdad in 1623. A hundred years later, Iran had declined in power, and it was finally conquered by an Afghan army led by Mir Mahmud. In 1724, Russia and Turkey, taking advantage of the confusion within Iran, worked out an agreement dividing that part of the country occupied by Russian and Turkish troops. In what was left over, a warrior king, Nadir Shah, formed an army that drove the Afghans out by 1729, and two years later he invaded India capturing Delhi in 1739. In a very few years, Nadir Shah succeeded in driving all foreign troops out of Iran, including the Turkish troops.

The 19th and 20th centuries were marked by the struggle between Great Britain and Russia to expand their respective spheres of influence within Iran. During the Cold War, the United States and Great Britain tried to keep the Iranian Tudeh Party from acquiring political power. They succeeded in 1953. The Tudeh Party was of Communist persuasion, and it had made some progress in organizing workers at the Abadan refinery. Stability in Iran was critical to both Great Britain and the United States, and the Soviet Union sent messages to the West saying that oil was critical to them. However, the swelling volume of oil was critical to the postwar recovery of a devastated Europe with economic assistance via the Marshall Plan. The major oil companies all had contracts with Saudi Arabia and proceeded to build Tapline to get this oil to Europe by the shortest possible route. This turned out to be through Saudi Arabia itself to Jordan and on to Sidon in Lebanon for transfer to tankers. Ibn Saud, then king of Saudi Arabia, advised the United States it might have to cancel Aramco's concession because of pressure from other Arab states originating in anti-Jewish sentiments surfacing in 1948 with the formation of the State of Israel. Moreover, the United States had effectively guaranteed the territorial integrity of Saudi Arabia as well as its independence. The huge revenues from sale of oil to the West was the sole source of Ibn Saud's wealth, so he could cancel the Aramco concession only at the risk of losing all that money. In Iran the problem was only marginally different. Having nationalized oil, Iran demanded a higher percentage of the profits as a condition of letting Great Britain get back its concession rights. America's Central Intelligence Agency supported by Britain's MI6 managed to unseat Mossadegh and the return of the Shah from exile. Shah Reza Pahlevi lasted until 1979, when Ayatollah Khomenini replaced the Shah and converted Iran into the Republic of Iran, an Islamic republic.

Britain and France were threatened with expropriation of the Suez Canal in 1956. Only two years earlier, France had suffered a humiliating setback in Vietnam. French forces had to surrender at Dien Bien Phu with a final settlement worked out in Geneva. By 1956, two-thirds of all the traffic through the Suez Canal carried oil. In the same year, the United States had declined to support Nasser's grand project for Egypt, the Aswan Dam. Nasser was quick to get his revenge and turned to the Soviet Union for weapons. Leaders in both London and Paris saw the danger of losing oil from the Middle East. Oil was not really discovered in Libya and Algeria until the mid1960s, and Syria could shut off Tapline oil before it got to waiting tankers in Sidon. London's international finances were precarious, even though it had given India its independence in 1947. In the immediate postwar period Britain, as the direct result of its wartime expenses, had gone from being the world's largest debtor to being the world's largest debtor.Its gold and dollar reserves were sufficient to cover three months of imports in 1956, and its revenue from Middle East oil contributed to its foreign earnings. The loss of income from oil would literally bankrupt Great Britain, so Prime Minister Anthony Eden and France's Guy Mollet were quick to agree on a plan that really required President Dwight Eisenhower's support in 1956, an election year for him. Israel saw the problem in ways not readily grasped by Washington. Nasser was preparing for war against Israel. And Great Britain was in precarious financial health as stated by its Permanent Undersecretary of the Foreign Office:

I am convinced that he [Eisenhower] is wrong....If we sit back while Nasser consolidates his position and gradually acquires control of the oil-bearing countries, he can, and according to our information, resolved to wreck us. If Middle East oil is denied to us for a year or two our gold reserves will disappear. If our gold reserves disappear, the sterling area disintegrates. If the sterling area disintegrates, and we have no reserves, we shall not be able to maintain a [NATO] force in Germany, or indeed, anywhere else. I doubt whether we shall be able to pay for the bare minimum necessary for our defense. And a country that cannot provide for its own defense is finished.

The Suez crisis arose at the same time the Soviet Union invaded Hungary, and Khruschev told the United States that sending American troops to the Middle East or in any way interfering with Nasser would invite a Soviet reprisal. Khruschev should not be criticized for this form of irony. It was also in 1956 that he enlivened a four-hour session of the Russian Duma with the details of Stalin's evil. Apparently, the CIA had somehow gotten a copy of this speech, and the media in the United States played this story straight. Nikita Khruschev was his own man, not a successor handpicked by Stalin. But no matter who ruled the Soviet Union from the Kremlin, Middle East oil kept growing. In his book, The Prize, Daniel Yurgin noted that "Out of every ten barrels added to free world reserves between 1948 and 1972, more than seven were found in the Middle East." Enrico Mattei saw all this and decided he would negotiate with Iran. The company formed to do this was Azienda Generali Italiana Petroli (AGIP). It is still active in 1997 after its real start in 1953. Earnings from natural gas within Italy financed AGIP's activities outside of this country.

Mattei's objective was to join what he called the Sette Sorrelle, the Seven Sisters. This cartel included Jersey Standard, Mobil, Chevron, Texaco, Gulf Oil, Royal Dutch Shell, and British Petroleum. Actually, Comite General du Petrole (CFP) was the eighth sister from France. Mattei was not admitted to this club, so he simply bided time while he negotiated with Iran's Shah in 1957, after the Suez crisis. Under the terms of the deal finally worked out, the National Iranian Oil Company got 75 percent of the profits to AGIP's 25 percent. This was approved by Iran, but the Seven Sisters were appalled; the arrangement ended the treasured 5050 deal. Unfortunately for Mattei, oil in commercial quantities was never found beneath the land ceded to the partnership. Iran was, however, still firmly within the American sphere of influence. American global strategy involved the use of its troops in various Middle East nations. They were there to train Iranian officers in military maneuvers using American arms sold to the Shah's government. According to a pattern in all these countries, Iran, the host country, granted American military advisers, their support staffs, and families immunity from the national laws of Iran using their terms of a Status of Forces Agreement (SOFA). Locally, this was seen as just evidence of Pahlevi capitulation to the United States. In October, 1964, the Ayatollah Ruhollah Khomenini delivered a fiery denunciation of the SOFA including his belief that the SOFA violated the Koran. In the violence that followed, the Shah decided to exile this spokesmen of the Shia. He was sent first to Turkey and finally to Paris, a city from which he would return to Iran in 1979.

During the years from 1964 to 1979, Americans in Iran did a great deal to earn the contempt of the Iranians. In her book, The Iranians, Sandra Mackey details much of the insensitivity to local culture that so offended the ascetic Shia religion and the poor before whom Americans flaunted their wealth and foreign culture. Iran has been on a relentless arms-buying spree for at least five years -- Khomenini died in 1989. It has tried to acquire weapons of mass destruction, and it recently acquired its third Kiloclass submarine from the former Soviet Union. Iran has publicly opposed the Arab-Israeli peace treaties and has continued its financial and logistical support of terrorism. The Clinton Administration has imposed sanctions on Iran because of its state-supported terrorism. This is only one reason that the 9, The Persian Empire of Muhammad Reza Shah describes it all. This book was published in 1996 by the Penguin Group, an imprint of Dutton. Another book published by Simon & Schuster in 1996 was entitled God Has Ninety-Nine Names and written by Judith Miller describes Iran during the period from 1979 to the present She makes the point that within less than 24 months after 1979, Iran and Iraq were at war with each other. According to Khomenini, this war was religious and had to be won by Iran. Even so, the war itself, which was finally ended in 1988, "was said to have cost between $60 and $70 billion and left Iran deeply in debt. The human cost was immeasurable: More than 400,000 were said to have been killed and twice that number wounded, many of them in human-wave attacks in 1983 and 1984 that had appalled and terrified the West. Miller had revisited Iran several times, and the book had her views spread out over five years. After her visit in 1995, she wrote as follows:

The Islamic revolution was at an impasse not unlike that of the shah almost twenty years ago. Riots and other evidence of mass discontent could no longer be dismissed as aberrations. Liberals and hard-line intellectuals were at war with their government, if not with the system itself. The middle class was disenchanted, and even many of the poor despised the mullahs and their unfulfilled promises... Not since the Shah's Peacock Throne had the legitimacy of Iran's government been in such doubt. Rafsanjani may not have seen himself as Iran's Gorbachev, but the "Islamic glasnost" in Iran reminded me most of my visit to the Soviet Union just before the collapse of communism...

The Clinton Administration has opposed any pipeline route through Iran. In her book, Judith Miller offers a pessimistic view of the Middle East. "The World Bank," she wrote, "forecasts that the population of the Middle East will reach 448 million by the year 2000 and 1.17 billion by 2100. Yet Saudi Arabia, Sudan, and Lebanon boycotted the UN Conference on Population and Development in Cairo in 1994, and the Arab Middle East lags behind most developing nations, and far behind East Asia in every World Bank component of productivity growth -- spending on education, worker training, and the number of women in the work force. Arms purchases, by contrast, remain staggeringly high. The Middle East now buys almost 50 percent of all arms sold to the Third World."

Listen to some Iranian Classic music; Dastgah of Homayoun by Hassan Kassayi.

All contents © 1998 William M. Brinton