Energy and Japan-Iran Relations in 1950s: Reassessing the Idemitsu's Oil Deal with Iran

Abstract

During the Oil Nationalization Movement of the early 1950s, Iran’s oil was boycotted by the British and major oil companies, which brought a lot of financial hardship to the government of Prime Minister Mossadegh. A few medium-scale oil companies tried to buy and transport it to the market, including Japanese Idemitsu Kosan. It was a very risky but highly profitable deal for them, because Iran gave large discounts to the buyers. However, after Mossadegh’s downfall and the establishment of the Zahedi government, the deal faced problems. Iran could not or would not easily accept the discounted rate requested by Idemitsu.In approximately 1954, the Japanese government intervened to support Idemitsu, including by writing letters to the Foreign Ministry. Below is one of those letters, which has been translated from Farsi to Japanese, that was sent to Dr. Ardalan, the Foreign Minister of Iran, in September 1956. In the letter, Japan demanded that the Iranians keep their obligations and promises and offered a long-term oil deal with special conditions. In the article, I describe the background and details of the deal, explain the Japanese government’s position regarding the Idemitsu deal, and shed some light on Japan’s energy diplomacy.