By: Mir M.Hosseini
The Iranian government signed an agreement that gave exclusive rights to petroleum resources of 4 northern provinces to the American Sinclair company in return for a %10 share and ten million dollars loan. Prime minister Reza khan expressed his content with the deal in a celebration ceremony in Tehran as he saw the competition that started with the entrance of American companies in favor of Iranians, breaking economic and political monopoly imposed by Russia and UK for centuries. Moreover, financial resources were needed to modernize the country. Sinclair somehow had managed to make a similar deal with the Soviets in Baku although USSR had not yet been recognized by Americans. Thus, a second corridor to transfer the Iranian oil through the Black Sea rendered the British monopoly practically obsolete.
The British government and Standard Oil started an intensive campaign against Sinclair in US and Iran. Late in 1923, American media published the news that Sinclair was involved in a scandal bribing the US Navy authorities with $260,000 in return for control of oil reserves. Sinclair was sentenced and sent to jail. Consequently, the Soviets nullified the Sinclair agreement in Baku and the Morgan bank which was supposed to provide the loan set forth a strange condition. Iranians were asked to give the British equal share of the deal in order to receive the payment. At the same time, British supplied arms and money to Sheikh Khazal to stage an uprising in the Khuzestan province, an area in Iran which was under British control. Mob Murder of a high ranking American diplomat on July, 18, 1924 following an orchestrated propaganda against Americans in Iran gave the Americans strong signals that the British still held enough power to secure their interests in Iran.