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US confrontation with Iran

Western Business Interests

Project: US Confrontation with Iran
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In a letter to British Foreign Secretary Arthur Balfour, Sir Maurice Hankey, Britain’s First Secretary of the War Cabinet, writes, “Oil in the next war will occupy the place of coal in the present war, or at least a parallel place to coal. The only big potential supply that we can get under British control is the Persian [now Iran] and Mesopotamian [now Iraq] supply… Control over these oil supplies becomes a first class British war aim.” [Yergin, 1993; Muttitt, 2005]

Entity Tags: Maurice Hankey, Arthur Balfour

Timeline Tags: Events Leading to Iraq Invasion

Category Tags: Geopolitics, Oil and Gas, Western Business Interests

The administration of Gerald Ford produces a strategy paper commending Iran’s decision to develop a massive nuclear energy industry. The document cites Iran’s energy security as a prime reason for supporting the plan. Tehran needs to “prepare against the time—about 15 years in the future—when Iranian oil production is expected to decline sharply,” the paper says. The “introduction of nuclear power will both provide for the growing needs of Iran’s economy and free remaining oil reserves for export or conversion to petrochemicals.” [Washington Post, 3/27/2005]

Entity Tags: Ford administration

Category Tags: Nuclear Program, Western Business Interests

Secretary of State Henry Kissinger circulates National Security Decision Memorandum 292 on “US-Iran Nuclear Cooperation” outlining the administration’s negotiating strategy for the sale of nuclear energy equipment to Iran. The document states the government would permit “US material to be fabricated into fuel in Iran for use in its own reactors and for pass through to third countries with whom [the US has] agreements.” According to the document, the administration would “[a]gree to set the fuel ceiling at the level reflecting the approximate number of nuclear reactors planned for purchase from US suppliers,” but would consider increasing the ceiling “to cover Iran’s entitlement” from their proposed $1 billion investment in a 20 percent stake in one of the private US uranium enrichment facilities that would be supplying Iran. The strategy paper also explains under what terms the Ford administration would be willing to grant Iran approval to reprocess US supplied fuel. [US National Security Council, 4/22/1975; Washington Post, 3/27/2005] Three decades later, Kissinger will tell the Washington Post that the Ford administration was never concerned about the possibility of Iran building nuclear weapons or the potential for proliferation. “I don’t think the issue of proliferation came up,” he will recall. “They were an allied country, and this was a commercial transaction. We didn’t address the question of them one day moving toward nuclear weapons.” [Washington Post, 3/27/2005]

Entity Tags: Henry A. Kissinger, Ford administration

Category Tags: Nuclear Program, Western Business Interests

Defense Secretary Donald Rumsfeld and White House Chief of Staff Dick Cheney unsuccessfully lobby for the construction of a nuclear reprocessing plant in Iran. The two men devised the scheme because, they say, Iran needs a nuclear power program to meet its future energy needs. This is despite the fact that Iran has considerable oil and gas reserves. The deal would be lucrative for US corporations like Westinghouse and General Electric, which would make $6.4 billion from the project. During negotiations over Pakistan’s nuclear weapons program, Secretary of State Henry Kissinger offers Pakistan access to this facility for reprocessing of its nuclear fuel. In return, Pakistan would not build its own reprocessing plant, which the US suspects will be used for a nuclear weapons program. However, Pakistani Prime Minister Zulfikar Ali Bhutto rejects the deal, and the plant is not built in Iran anyway. [Levy and Scott-Clark, 2007, pp. 46]

Entity Tags: Zulfikar Ali Bhutto, Henry A. Kissinger, Donald Rumsfeld, Richard (“Dick”) Cheney

Category Tags: Nuclear Program, Western Business Interests

President Gerald R. Ford signs a presidential directive giving the Iranian government the opportunity to purchase a US-built nuclear reprocessing facility for extracting plutonium from nuclear reactor fuel. Iran, with support from the US, wants to develop a massive nuclear energy industry that has complete “nuclear fuel cycle” capability so fissile materials can be supplied self-sustaining basis. US companies, chief among them Westinghouse, stands to make $6.4 billion from the sale of six to eight nuclear reactors and parts. The shah has argued that Iran needs a nuclear energy program in order to meet Iran’s growing energy demand. Iran is known to have massive oil and gas reserves, but the shah considers these finite reserves too valuable to be spent satisfying daily energy needs. In a 1975 strategy paper, the Ford administration supported this view saying that “introduction of nuclear power will both provide for the growing needs of Iran’s economy and free remaining oil reserves for export or conversion to petrochemicals.” Top officials in the Ford administration—including Secretary of State Henry Kissinger, Chief of Staff Dick Cheney, and Paul Wolfowitz, who is responsible for nonproliferation issues at the Arms Control and Disarmament Agency—are strong supporters of Iran’s ambitions. Kissinger will tell the Washington Post 30 years later that the Ford administration was not concerned about the possibility of Iran using the facilities to produce nuclear weapons. “I don’t think the issue of proliferation came up,” he says. But Charles Naas, deputy US ambassador to Iran at this time, will tell the Post that nuclear experts had serious concerns about potential proliferation. Naas will explain that the administration was attracted to the nuclear deal “terms of commerce” and interested in maintaining good relations with the shah. [Washington Post, 3/27/2005]

Entity Tags: Paul Wolfowitz, Henry A. Kissinger, Gerald Rudolph Ford, Jr, Richard (“Dick”) Cheney

Category Tags: Nuclear Program, Western Business Interests

US President Bill Clinton issues Executive Order 12957 imposing strict oil and trade sanctions on Iran. US companies and their foreign subsidiaries are hence prohibited from entering into any contract “for the financing of the development of petroleum resources located in Iran.” [US President, 3/15/1995; BBC, 3/17/2000; US Department of Energy, 8/2004]

Category Tags: Oil and Gas, Western Business Interests

US President Bill Clinton issues Executive Order 12959 prohibiting US businesses from engaging in virtually all trade with Iran except for information and informational materials. Corporate criminal penalties for violations of the Iranian Transactions Regulations range up to $500,000, with individual penalties of up to $250,000 and 10 years in jail. [US Department of the Treasury. Office of Foreign Assets Control, 11/1979; US President, 5/6/1995]

Entity Tags: William Jefferson (“Bill”) Clinton

Category Tags: Western Business Interests

German authorities seize a boat in the port of Hamburg containing a shipment of rubber parts—allegedly bound for Iran—that could be used to make tracks for tanks and US-made M-113 armored personnel carriers. The seized boat, the Zim Anvers, is owned by the Zim-American Israeli Shipping Company. An Israeli company, PAD, headed by Avihai Weinstein, 34, had been issued a German export license for the shipment. The license specifies Thailand as its final destination, but according to German customs, the shipment is really destined for Iran. According to the Israeli daily Yediot Aharonot, it was to be transferred in Hamburg to an Iranian cargo ship headed to the southern Iranian port of Bandar Abbas. Weinstein claims he had no knowledge of the shipment’s actual destination. Raphael Eitan, an adviser on terrorism for several Israeli governments between 1978 and 1985, tells public radio the next day that it would have been impossible for Weinstein “not to know what the final destination of the shipment was. In this type of affair, there is no innocent contract. He knew the shipment was headed to Iran,” he says. Tehran denies any involvement with the boat. [Agence France-Presse, 3/29/2002]

Entity Tags: Zim-American Israeli Shipping Co.

Category Tags: Geopolitics, Israel, Western Business Interests

2003: Trade Between China and Iran Soars

Trade between China and Iran increases by 50 percent. China is a major exporter of manufactured goods to Iran, including computer systems, household appliances, and automobiles. The growth of Chinese-Iranian trade has undermined the effectiveness of US sanctions against companies doing business with Iran, which the Bush administration claims is pursuing the development of nuclear weapons and has ties to terrorist organizations. “Sanctions are not effective nowadays because we have many options in secondary markets, like China,” Hossein Shariatmadari, a leading conservative Iranian theorist and editor of the Kayhan newspapers, will tell the Washington Post in 2005. [Washington Post, 11/17/2004]

Entity Tags: Hossein Shariatmadari

Category Tags: Geopolitics, Western Business Interests

Russia is negotiating a long-term oil swap contract with the National Iranian Oil Company (NIOC). As part of the swap deal, Russia would send crude oil to Iran’s northern refineries for domestic consumption via a Chinese-built pipeline in exchange for an equal amount of Iranian oil being sent to Russia’s buyers at Iran’s Gulf oil terminals. The arrangement would make Russian oil available to non-European buyers at a competitive price by decreasing the cost of delivery. [Asia Times, 2/11/2003] United Press International will note in 2005 that the swap agreements are “a direct challenge to the Baku-Tbilisi-Ceyhan (BTC) Pipeline Project.” [United Press International, 6/29/2005]

Entity Tags: National Iranian Oil Company

Category Tags: Financial, Oil and Gas, Western Business Interests

March 4, 2003: BTC Pipeline Discussed

The Brookings Institution hosts the Baku-Tbilisi-Ceyhan (BTC) Pipeline Project Roundtable. The proposed pipeline would transport Caspian Sea oil 1000 miles from Azerbaijan, through Georgia, and to the Turkish Mediterranean port of Ceyhan. Delegates from each of the three countries and executives and consultants from British Petroleum attend the discussion. The US is a strong supporter of the pipeline project because it believes the pipeline will deny Iran leverage in the transportation of oil and gas from Central Asia and the Caspian Basin. [Alexander's Gas & Oil Connections, 11/27/2002; Institution, 3/4/2003]

Entity Tags: British Petroleum, Brookings Institution

Category Tags: Oil and Gas, Western Business Interests

Trade between Iraq and Iran grows at an estimated annual rate of 30 percent after the US and British invasion. “The economies of Iraq and Iran, the largest Shiite-majority countries in the world, are becoming closely integrated, with Iranian goods flooding Iraqi markets and Iraqi cities looking to Iran for basic services,” the New York Times will report in early 2007. After the invasion, Iraq begins importing electricity and a wide variety of consumer items like Peugeot sedans, carpets, construction materials, fish, and spices. Iraqis are also going to Iran to obtain medical services. Trade between the two nations grows the fastest in the Shiite-dominated south. By 2007, Basra is importing $45 million worth of goods from Iran each year with some 100 to 150 commercial trucks crossing into Iraq from Iran each day. The trend causes concern in the White House, which accuses Iran of having a nuclear weapons program and claims that the Iranians are fueling the insurgency. According to Asaad Abu Galal, the governor of Najaf, “the Americans don’t want to bring Iranians to Najaf. The Americans want to control the sky.” Iranians are also vying for a market in the financial sector, with at least one bank applying for a license to open a branch in Baghdad. [New York Times, 3/17/2007]

Entity Tags: Asaad Abu Galal, Iran

Timeline Tags: Iraq under US Occupation

Category Tags: Geopolitics, Financial, Western Business Interests

CNN reports that despite US government prohibitions (see March 15, 1995 and May 6, 1995) banning US citizens and business from doing business with Iran, dozens of US companies are actively conducting business there, including Halliburton, ConocoPhillips and General Electric. The companies are using a complicated array of corporate loop-holes and off-shore accounts to maneuver around US laws. Michael Ledeen, interviewed by CNN, says these companies are aiding terrorism. “The oil companies are a wholly owned subsidiary of the government… the government is the primary sponsor of terrorism,” he says, additionally claiming that “they have separate organizations that are used to funnel oil profits and other profits into the terror network.” [CNN, 2/10/2003; CNN, 5/29/2003]

Entity Tags: ConocoPhillips, Halliburton, Inc., Michael Ledeen, General Electric

Category Tags: Geopolitics, Oil and Gas, Western Business Interests

General Electric does about $270 million in business in Iran through one of its foreign subsidiaries. The company has sold Iran hydroelectric equipment, medical equipment, and oil and gas equipment. Under current US law, companies are barred from doing business with nations that the US State Department has said are sponsors of terrorism. However the law does not prohibit a company’s foreign subsidiaries from engaging in such business. [Associated Press, 2/2/2005]

Entity Tags: General Electric, US Department of State

Category Tags: Oil and Gas, Western Business Interests

General Electric (GE) follows Halliburton and ConocoPhillips, announcing that the company will no longer accept business from Iran (see May 29, 2003). “Because of uncertain conditions related to Iran, including concerns about meeting future customer commitments, we will not accept any new orders for business in Iran effective Feb. 1,” explains Gary Sheffer, a GE spokesman. “This moratorium on new orders will be re-evaluated as conditions relating to Iran change.” [Associated Press, 2/2/2005; Forbes, 2/2/2005] Under current US law, companies are barred from doing business with nations that the US State Department has said are sponsors of terrorism. However the law does not prohibit a company’s foreign subsidiaries from engaging in such business. [BBC, 7/20/2004; Associated Press, 2/2/2005]

Entity Tags: US Department of State, Halliburton, Inc., General Electric, ConocoPhillips, Gary Sheffer

Category Tags: Western Business Interests

Asian News International reports that according to official Pakistani sources the US government is reconsidering its opposition to the $4.2 billion dollar Iran-Pakistan-India gas pipeline (see 1993). The Bush administration has been opposed to the proposed pipeline on grounds that it would help Iran, a potential target of future US military strikes. But since the consortium is hoping to involve US corporations, these companies are apparently putting pressure on the White House to back the pipeline. Without the approval of the US government, the companies would be barred from participating in the pipeline’s construction. According to sources, the US is considering pursuing a strategy that would leverage its possible support for the pipeline against Iran in its disagreement over the country’s nuclear program. [News (Islamabad), 4/2/2005]

Entity Tags: Bush administration (43)

Timeline Tags: Complete 911 Timeline

Category Tags: Iran-India pipeline, Geopolitics, Western Business Interests

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