Iran: Cold War Crucible

During the Second World War, Britain, the US and the Soviet Union worked together in oil-rich Iran. But cooperation was to degenerate into suspicion and hostility. 

One of the first major conflicts of the Cold War broke out in Azerbaijan, the northernmost province of Iran. Bordering the Soviet Union and divided from Soviet Azerbaijan, the regional capital Tabriz was an important gateway between the two countries. From Baku, capital of Soviet Azerbaijan, socialist ideas were brought in to Iran, inspiring the foundation of the Persian Communist Party in 1920. In 1945 the Azerbaijan Democratic Party, backed by the Red Army, declared autonomy from Tehran and established an independent government. Soviet soldiers had been stationed in Iran alongside the British since 1941. They had not only overstayed their welcome but had sparked an international crisis. Brought before the United Nations in 1946, the Azerbaijan crisis was one of the first issues heard by the Security Council. How did Iran become the first arena of conflict between the major powers?

Historians have long made a causal connection between the start of the Cold War and the British-Soviet occupation of Iran. Yet general understanding of the Second World War is confined mainly to Europe, the Pacific and South-east Asia. While the German occupation of much of Europe is well known, the Allied invasion and occupation of Iran is not. Yet a focus on the occupation of Iran by British and Soviet troops is overdue. It is far more than a mere sideshow: it was the crucible in which the origins of the Cold War first formed.

German advance

In June 1941 the German army broke its pact with the Soviet Union and invaded their former ally. Keen to follow in the footsteps of Napoleon as the conqueror of Europe, Adolf Hitler’s ambitions seemed unstoppable. The advance of Hitler’s troops towards the oilfields of the Caucasus and the Middle East alarmed Britain’s wartime coalition government. It had two major fears: first, that the Wehrmacht might launch a successful attack on countries that possessed oil. Second, that those countries would ally with Hitler and provide his military with oil and other valuable resources. In April 1941 it seemed as if the second fear might come true, when Rashid Ali al-Gaylani, a Nazi sympathiser, staged a coup in Iraq and established a government. At the end of the First World War, with the break up of the Ottoman Empire, Iraq had become part of the British mandate, together with Palestine and Jordan. The Hashemite monarchy was established and Iraq became independent in 1932. Britain, however, continued to maintain its presence and influence, especially under the pro-British government of Nuri as-Said, who had broken diplomatic relations with Germany at the outbreak of the war in Europe. British influence continued to be resented by Iraqi nationalists, particularly those in the army who sought full independence. This resulted in the coup of April 1941, which consisted of generals and the Iraqi nationalist politician, Rashid Ali. In an attempt to establish independence from Britain, Rashid Ali’s government approached the Axis powers, prompting Britain to act. It launched a military campaign in Iraq and overpowered Rashid Ali. He fled to neighbouring Iran, whose own leader Reza Shah Pahlavi was also sympathetic to Nazi Germany. This created a precedent for Britain to resort to military means as a way to prevent pro-Nazi governments from taking power.

Map of Iran and neighbouring territories, c.1943

With Iraq subdued, Britain’s attention turned to Iran. Reza Shah, the autocratic dictator who had crowned himself Shah in 1925, had long fought British and Russian dominance over Iran. The two powers had a shared history in the region, popularly known as the Great Game. Since the defeat of Napoleon in Europe, Britain had attempted to curtail Russian expansion eastwards. The encroachment of Russia in areas close to Iran’s borders was a key driving force behind British policy towards Iran. Under Tsar Alexander I, Russia extended its borders into Iranian territory, annexing Georgia in 1801. The Treaty of Golestan, signed in 1813, humiliated Iran and saw the country lose most of its territories in the Caucasus. Furthermore, the treaty stated that only the Russians could maintain a fleet in the Caspian Sea. A few years later, in 1826, Abbas Mirza, heir apparent and governor-general of Azerbaijan, led a campaign into the Caucasus that ended in further defeat, with the Russians capturing Tabriz. Two years after that, in 1828, the Treaty of Turkamenchai was signed and the whole of the Caucasus, including the khanates of Nakhchivan and Yerevan, were permanently ceded to the tsar. Russia’s gains made it a formidable threat to Britain’s position in Iran. As Russia moved eastwards and thereby closer to India – the most important of the Empire’s possessions – Britain sought to protect its position through diplomacy. In the 1814 Preliminary Treaty signed between Britain and Iran, for example, Iran declared that all alliances made with European powers in a state of hostilities with Britain would be declared null and void. Iran also pledged to protect the gateway to India from other European armies. In the second half of the 19th century, Britain focused on Afghanistan as the buffer between Russia and India.

Double threat

At the start of the 20th century, however, this rivalry turned to cooperation. An emerging German empire was seen as a threat to both British and Russian interests. This resulted in the joint occupation of Iran during the First World War. In its aftermath, Reza Shah tried to establish an independent Iran. Under him, Iran would no longer be a pawn in the Great Game. He was a leader in his own right who had brought advances and modernity to his country, albeit at the cost of certain political freedoms. In order to establish Iran’s independence, he looked to Germany. During the 1930s, as Germany was rebuilding its military might, it also sought an economic partner to provide valuable resources and raw materials. Germany was able to find all of these in Iran: from leather for its soldiers’ boots to pistachios for its army’s sustenance. From Germany, Iran received scientific knowledge and technological advancement: Lufthansa established and operated Iran’s national airline, while Siemens and Krupp established operations in the country.

Iran declared itself as neutral early in the war. It became a place where German agents mingled freely with their Italian counterparts, keeping an eye on their enemies. While Britain had been relatively distant in its previous relations and policies towards Iran, the 1941 Rashid Ali coup and the breakdown of the Molotov-Ribbentrop pact made the country a more pressing concern in London’s wartime policy. At its heart was the oil in the south of the country, an essential resource for the war. Since the turn of the 20th century, Iranian oil was a British enterprise, under the Anglo-Iranian Oil Company (now known as British Petroleum). Although Reza Shah had tried to renegotiate better terms for Iran, its oil in 1941 remained a British resource.

Using the German presence as a pretext to break Iran’s neutrality, Britain and the Soviet Union gave Reza Shah an ultimatum: remove all Axis personnel or risk an invasion. But how deep was German penetration in Iran and how real was the threat of a Nazi takeover? Was it severe enough to justify the occupation of Iran by Britain and the Soviet Union? Although there was a German presence, together with Italian and Japanese personnel, it could be argued that there was no immediate threat.

'Britain shall fight on until peace is restored to Iran and all the other Allied nations' British propaganda poster with Persian text, 1940s

The Shah refused, so in August 1941 British and Soviet troops invaded Iran from the south and north respectively. Although Britain and the Soviet Union upheld the Iranian central government to keep it in power, the country was run by the two occupying forces, through their military and through their respective representations, the Soviet and British Legations (upgraded to embassies in 1943). While London and Moscow directed policy remotely, the British and Soviet ministers (later ambassadors) were the main drivers of the occupation, dealing with everything from food distribution to the policing of opposition activists. With the Allied troops in Tehran in September 1941, Reza Shah had no other option than to surrender and abdicate his throne in favour of his young son, Muhammad Reza. Britain arranged for the former monarch’s passage to South Africa, where he died a few months later. Iran was divided between the two powers: the north was controlled by the Soviets; the south by the British. Thus began an era of British and Soviet intervention in all aspects of Iranian life. During the years of the occupation, the economy suffered high inflation, though there were also changes in labour laws to improve working conditions. Politically, the occupation resulted in a period of freedom. Trying to improve the image of the alliance, the British attempted to promote political reform. Under the auspices of the occupation, a political amnesty was granted, releasing a number of political prisoners. With the abdication of Reza Shah, there was an easing of censorship and the press was able to write more freely. Newspapers and magazines were established and Britain made it a central part of its policy to promote reform and change.

Yet the Soviets and the British lost no time in fulfilling their objectives, regardless of the implications for Iranians. Their first task was to deal with Nazi influence in the country. Propaganda was used to discredit the reputation of Germany and promote the occupation. This took the form of publishing anti-fascist materials in journals and pamphlets. As the Iranian population was largely illiterate, radio and film were seen as the most effective way of denouncing fascism. Mobile cinemas screened Allied victories. Posters, designed in Egypt, were distributed widely. There were also attempts to use Persian mythology in propaganda, with miniatures showing scenes from the Shahnameh, the Persian epic, depicting Hitler as the evil king and Churchill, Roosevelt and Stalin as the heroes. More elaborate ideas were put forward such as an elaborate airshow, which would have had planes carrying large cut-outs of a jackboot kicking a swastika. The arrest of German and Italian personnel, however, was to prove the most effective method of curbing Axis influence. Some were imprisoned in Iran, while others were deported to Australia. More controversial was the arrest of local politicians suspected of having pro-German leanings. The British and Soviets arrested three prominent Iranian figures who were known for their sympathies towards Germany: the former prime minister, Ahmad Matin-Daftari; a religious leader, Ayatollah Abolqasem; and the military governor Fazallah Zahedi. These arrests were unpopular and made the occupation widely resented.

The British and the Soviets used Iran’s resources and infrastructure to support their war effort. Rationing was implemented and the distribution of wheat was dependent on the needs of the Allies, which at times resulted in severe food shortages. Hoarding became common. Oil, controlled by the Anglo-Iranian Oil Company, was taken from the oil fields in the south of Iran and used to supply the Soviet army. While the British acknowledged that it was an Iranian asset, the priority was to supply the Allies, so Iranian sovereignty was ignored. This created deep resentment among Iranians, explaining why the movement to nationalise oil gained so much momentum after the war. A few months after British troops left Iran, oil workers went on strike. In 1951 prime minister Muhammad Musaddiq nationalised oil, leading to a British-US coup that overthrew him.

Tehran Conference

In the winter of 1943, Stalin, Roosevelt and Churchill met at the Tehran Conference to discuss the invasion of Europe and future war strategies. The entry of the US into the war on the side of the Allies after Pearl Harbor meant the arrival of American personnel in Iran, where they primarily aided the British. Iran became one of the earliest arenas in which the three major powers interacted with one another. While all were focused on the war against the Axis powers, the tensions that would lead to the Cold War were already present in Iran during the occupation. After the Battle of Stalingrad in February 1943, which saw the Red Army wipe out the German Sixth Army, tensions began to emerge among the allies. In Iran, the British became suspicious of Soviet intentions. During the parliamentary elections in 1943, the first to be held under the occupation, both the British and the Soviets interfered in the proceedings to ensure that their preferred candidates could stand.

Closer relations between Iran and the US started to develop during the occupation. Britain in particular encouraged close ties between the two countries as it saw this as an effective way of reducing Soviet influence in Iran. With Britain’s backing, the US sent the former State Department adviser, Arthur Millspaugh, to help with the financial situation in Iran. The occupation was expensive and had resulted in high inflation, increasing the cost of living for ordinary Iranians and making the occupation even more unpopular. Millspaugh had been sent to Iran to help reform the economy under Reza Shah, but was dismissed in 1927. On his return, he was encouraged to help alleviate the financial distress the occupation had caused. Further to this, the US also sent military personnel to train the Iranian army and the local police. These military exchanges would continue until the Islamic Revolution of 1979, with Muhammad Reza Shah spending huge amounts on US military equipment and the training of his army. The occupation made the Soviets suspicious and they did not enjoy easy relations with the Americans.

With tensions becoming more acute as the Allies made gains against the Axis powers, it became clear that the British-Soviet cooperation in Iran would not outlast the war. In 1944 the British manoeuvred the Iranian parliament and local politicians to ensure that the Soviets would not be able to gain access to Iranian oil in the north of the country, as this would have challenged the British monopoly over oil in the Persian Gulf. Less than a year later, the war in Europe was over and the occupation in Iran could no longer be justified. Having failed to gain an oil concession, the Soviets responded by supporting regional movements in the north of Iran, as the country became the centre of a new kind of conflict. The Azerbaijani and Kurdish nationalist movements went on to establish governments in Tabriz and Mahabad respectively, sparking one of the first major conflicts of the Cold War. The US became involved, calling for the Soviets to withdraw from Iran, stipulating that they were in violation of the Tripartite Agreement, which stated that the Allies would leave the country once the war was over.


It soon became clear that the conflict between the US and the Soviets over Azerbaijan would not be settled without diplomacy under the auspices of the United Nations. In the end, the Soviets and the British only withdrew their troops in the summer of 1946, once the Soviet Union had been granted an oil concession in the north of Iran. The governments in Tabriz and Mahabad collapsed soon after. While it seemed that the dust of the occupation was settling, the seeds of a wider conflict had been planted. Iran may seem like an unlikely location for Cold War conflict, overshadowed by the division of Germany and war in Korea, just as it may not seem a likely theatre for the Second World War. Iran, however, has an important place in both histories.

Rowena Abdul Razak is completing her DPhil at the University of Oxford, focusing on British policy and the Tudeh Party of Iran.