The 1973 Sale and Purchase Agreement was a 20-year agreement pressured by the

Shah of Iran This is a list of monarchs of Persia (or monarchs of the Iranic peoples, in present-day Iran), which are known by the royal title Shah or Shahanshah. This list starts from the establishment of the Medes around 671 BCE until the deposition of th ...

on the oil consortium that nullified

The Consortium Agreement of 1954 The Consortium Agreement of 1954 provided Western oil companies with 50% ownership of Iranian oil production after its ratification in 1954 expiring in 1979. In spite of numerous negotiations and offers, the Shah of Iran refused to extend the Agree ...

and provided the

National Iranian Oil Company The National Iranian Oil Company (NIOC; fa, شرکت ملّی نفت ایران, Sherkat-e Melli-ye Naft-e Īrān) is a government-owned national oil and natural gas producer and distributor under the direction of the Ministry of Petroleum of ...

with complete control of Iranian petroleum nationalizing the nation’s oil reserves. By 1975, western oil companies complained of the agreement and demanded renegotiation marking the first time in history that oil companies rather than the oil producing nations sought to negotiate an oil contract.

Background

The Shah had ambitions for a "great Persian civilization" in which Iran would one day become the largest oil producer in the world. He used Iran's development to establish himself as a strongman across the Middle East and the Persian Gulf and create an oil oligarchy controlling the price of oil. In the 1960s, the Shah initiated the formation and organization of large oil-exporting countries which would become known as the Organization of the Petroleum Exporting Countries (OPEC). The Shah also sought to terminate the 1954 Consortium Agreement an effort which was finalized with the 1973 Sale and Purchase Agreement. In response to the creation of OPEC, Maurice Bridgman of British Petroleum warned the

that According to Dr. Parviz Mina, an expert on Iranian Oil Affairs and previous director of the National Iranian Oil Company,

Result

In the summer of 1973, Iran exploited the supply shortage to double crude oil prices further reducing the power of the oil consortium. Political balance shifted from oil companies to oil producing nations.

References

{{Reflist, 30em Petroleum politics Treaties of Iran Cold War history of Iran OPEC