The coup everyone in Tehran remembers
Published 4 October 2026
If you want to know why the war in the rest of this file was so hard to talk down, start with a ledger nobody in Iran was allowed to read. Before there was a Hormuz crisis there was a company that would not show its books.
The company was the Anglo-Iranian Oil Company, majority-owned by Britain and holding a monopoly on Iranian oil production. On paper, Iran was owed 16 percent of its profits. The Council on Foreign Relations' history notes that the real share was probably far lower, because the company never let Iranian officials see its books. It also sustained the arrangement with illicit payoffs to leading Iranians, according to the same account. The British government, for its part, was financed in part by the company's profits, which tells you why London was in no mood to renegotiate.
In March 1951 the prime minister, Ali Razmara, who had blocked parliamentary efforts to demand a better deal, was assassinated. The crisis that followed produced a successor. Mohammad Mosaddeq, sixty-nine years old, a descendant of Persian royalty who had been educated in Europe and had served as finance minister for more than two decades, agreed to take the job on one condition: that the Majlis nationalize the oil industry. It did so unanimously. Britain objected, although it had just nationalized its own coal and steel industries, a point Iranians did not fail to notice.
London's answer was a blockade of Iranian oil exports, and it persuaded other Western powers to stay out of the way. Exports plunged and so did the Iranian economy. President Harry Truman declined British proposals to invade and tried mediating instead, sending envoys to Tehran and hosting Mosaddeq in Washington. Nothing came of it, largely because Mosaddeq would not accept any British role in Iran's oil industry. In October 1952, after learning that London was seeking to orchestrate a coup against him, he broke diplomatic relations with Britain and expelled its diplomats.
Then the American election changed the audience. With the Soviets dominating Eastern Europe, Mao in power in China and American troops fighting in Korea, Dwight Eisenhower had promised to roll back communism, not merely contain it, and his secretary of state, John Foster Dulles, meant to deliver. British diplomats argued that Mosaddeq's nationalization campaign was opening a door for communists. Mosaddeq helped them by pressing the Majlis for emergency powers and by telling American diplomats that revolution was imminent, though he had excluded communists from his government and it was the British embargo, not communist activity, that was hurting Iran. In June 1953, with Mosaddeq rejecting compromise proposals and Iranians protesting economic hardship, Eisenhower approved a clandestine Anglo-American operation to remove him.
Operation Ajax
The CIA director, Allen Dulles, who was John Foster Dulles's younger brother, oversaw the planning. The plan called for paying journalists, clerics and politicians to portray Mosaddeq as corrupt and power-hungry, paying street gangs to attack public figures, and then sending paid demonstrators to the Majlis to demand his removal. Power would pass to General Fazlollah Zahedi. On the ground, the operation was run by Kermit Roosevelt, a grandson of Theodore Roosevelt.
It nearly failed on the first try. The plan hinged on the shah firing Mosaddeq, and the shah balked. A year earlier he had confronted the prime minister over the limits of royal authority, Mosaddeq had resigned, crowds had poured into the streets demanding his return, and the shah had backed down. In July, Mosaddeq learned that members of the Majlis had been bribed to vote against him and called a national referendum. The vote was clearly rigged and gave him 99.4 percent support.
Under heavy American pressure the shah finally agreed to dismiss Mosaddeq and appoint Zahedi. When he was told of his dismissal on August 15, Mosaddeq declined to go and announced that he had foiled a coup. The shah fled the country, Zahedi hid, and the CIA told Roosevelt to leave. By any fair reading, Ajax had failed. Over the next four days the tide turned, and by August 19 Mosaddeq's premiership was over. Whether the cause was CIA money, opponents who saw a chance, or ordinary Iranians who concluded Mosaddeq meant to end the monarchy, the CFR account says, is something the historians still argue about.
What the winners did next
The shah consolidated power. Mosaddeq was convicted of treason and sentenced to three years in prison, followed by life under house arrest. One of his closest advisers was executed, along with more than a dozen military officers and student leaders who had been allied with his government. Zahedi lasted two years as prime minister before losing a power struggle to the shah, who went from indecisive to autocratic, according to the same history.
The oil outcome was not what London had hoped. The Eisenhower administration refused to let the company, renamed British Petroleum, resume its monopoly. Instead control of a new National Iranian Oil Company was shared among American, British and European firms, with profits split fifty-fifty with Iran.
The American role was not a rumor. In August 2013 the National Security Archive at George Washington University posted declassified documents and noted that the CIA had released a version of an internal history that specifically states the agency planned and helped implement the coup. The same posting reported that the British Foreign Office had tried in 1978 to expunge "very embarrassing" detail about its own role from the official American history of the period. Madeleine Albright, as secretary of state, acknowledged the coup in 1998 as a source of ongoing resentment among Iranians.
Historians do argue about how decisive Ajax was. CFR's James Lindsay lays out the case that Mosaddeq had abandoned his own democratic principles by grabbing emergency powers and trying to stifle criticism, and might have fallen anyway. But he adds the point that matters for this file: whatever the precise American contribution, the United States did intervene, and that supplied the raw material for a bitterly anti-American narrative that the leadership of the Islamic Republic continues to invoke. The same article was published on 19 August 2026, the 73rd anniversary of the coup, with the United States, by its count, nearly five months into a war with Iran.
It is worth keeping that in mind when you read a negotiating position in the chapters that follow and think it sounds paranoid. Iranian negotiators are not unaware of how this story ends for a prime minister who trusts a deal with a Western oil interest. They were taught it in school.
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