Global Impact Of Economic Shocks | 1973 - Oil and the 20th Century | 3

Summary

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Legacy Podcast Episode 3: Global Impact Of Economic Shocks | 1973 - Oil and the 20th Century

Hosts: Afua Hirsch & Peter Frankopan
Date: April 2, 2026

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Episode Overview

In this episode, Afua Hirsch and Peter Frankopan delve into the seismic global shifts caused by the discovery, extraction, and control of oil in the 20th century—focusing especially on the story of Iran and the lead-up to the 1973 oil crisis. They argue that viewing history through the lens of economic shocks and resource competition, rather than solely via wars and political ideologies, offers clearer insights into today’s ongoing global uncertainties. The discussion traces the geological, technological, and political developments that made oil the world’s defining commodity, examines colonial and postcolonial power struggles over oil, and explores enduring legacies of foreign intervention in Iran.

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Key Discussion Points & Insights

1. The Centrality of Oil in 20th Century Geopolitics

• [00:31] Peter emphasizes that while the 20th century is often told through the lens of European wars, the Middle East—especially Iran—has played a continuous, central role due to oil, underpinned by geology, power, and innovation.

  • “I don't think we think too much about the central role that Iran has played in the course of the 20th century.” – Peter Frankopan [00:31]

• [01:22] Afua challenges the conventional view, advocating for economic shocks and subtle conflicts as the true forces shaping the modern world.

  • “It actually better equips you to make sense of what we're experiencing right now.” – Afua Hirsch [01:22]

2. The Move from Coal to Oil: Technological and Societal Transformation

• [07:53] Peter traces the transition from coal (the backbone of the Industrial Revolution) to oil, spurred by the invention of the internal combustion engine in 1876 by Nicolaus Otto.

  • “Petroleum derivatives and particularly gasoline are far more energy dense and also much more portable. So that makes oil become really important to think about the world of the future.” – Peter Frankopan [07:53]

• [10:04] The rapid expansion of oil-powered mobility is explored, highlighting Henry Ford’s assembly line and its societal ripple effects, including the disappearance of horses from cities like New York.

  • Notable insight: In 1900, New York had 120,000 working horses; ten years later, they were virtually gone, transforming city life and employment.

• [12:33] Afua notes this not only changed cities’ environmental hygiene but fundamentally altered industries and urban layouts, particularly in the US.

3. Oil as a Driver of Global Military and Economic Power

• [14:19] Peter recounts how oil became essential for Britain’s Royal Navy, with Winston Churchill converting ships from coal to oil—laying the groundwork for oil as a strategic military asset.

• [15:39] Afua underscores oil’s global expansion, listing the formative roles of early oil companies (e.g., Burma Oil, British Petroleum, Standard Oil) and how they knitted together far-flung fields into an interconnected system.

4. Britain’s "Oil Problem" and the Role of Empire

• [16:18] Peter highlights the irony of the British Empire’s vastness but lack of domestic oil, prompting urgent moves to secure foreign oil—particularly in Persia (Iran).

5. Geopolitical, Geological, and Historical Roots of Middle Eastern Oil Dominance

• [19:18] Peter explains the unique geology of the Gulf that led to its oil abundance, with a lay explanation for non-specialists and a nod to both their fathers’ careers in geosciences for color.

  • “What makes the Gulf exceptional…is not a single feature, but it's the perfect alignment of multiple conditions… That convergence is very unusual, and it's why this region has such a disproportionate share of oil reserves.” – Peter Frankopan [21:44]

6. The Story of William Knox D’Arcy and the First Major Oil Concession

• [23:10] Afua prompts Peter to recount the rise of William Knox D’Arcy, whose 1901 concession with the Shah of Persia granted decades-long rights to extract Iran’s oil, leading to the formation of what became BP.

  • “In 1901, [D’Arcy] had agreed a concession with the Shah of Persia that he would have the rights to prospect, explore, exploit and transport and sell natural gas, petroleum, asphalt and mineral waxes from Persia, or most, almost all of Persia, for 60 years.” – Peter Frankopan [23:30]

7. Colonial Exploitation and Rise of Nationalism

• [24:52] The British government acquires majority control of the Anglo-Persian Oil Company in 1914 for strategic reasons. Iran’s oil becomes a pillar of British national security—but also a driver of growing resentment.

• [26:30] Afua draws parallels with oil’s extraction from Native American lands in Oklahoma (“Killers of the Flower Moon”), pointing out that imperial/racial ideology enabled these “nefarious deal-making takeovers.”

8. Nationhood, Identity, and Oil Sovereignty

• [29:51] The name change from Persia to Iran in 1935 is linked to Aryanism and global fascist ideologies, reflecting a desire for a new era and a break from colonial subordination.

9. Nationalization and the Mossadegh Crisis

• [36:09] By 1950, only a fraction of profits remain in Iran; nationalization becomes a unifying national cause. Prime Minister Mossadegh spearheads the effort, but Britain reacts with economic sanctions and international legal pressure (“lawfare”).

  • “If you, to put it bluntly, if you can't force someone to do something at the negotiating table, you've got to think a bit more radically. And that's what happens in Iran.” – Peter Frankopan [36:09]

• [38:51] Afua points out Mossadegh’s moderate and legalistic approach, raising the moral question: how did Britain justify punitive responses to a country’s nationalization of its own assets?

• [41:35] Described are the CIA- and MI6-backed coup to depose Mossadegh (Operation Ajax), the ensuing chaos, and the return of the Shah—now more autocratic than ever.

  • “It's a kind of coup that happens by mistake... and then the Shah flies back triumphantly convinced that his people love him and want him back. And he draws all of the wrong lessons from this.” – Peter Frankopan [41:35]

10. Legacies of Intervention, Mistrust, and Continuity

• [44:06] Mossadegh’s overthrow leaves a bitter legacy of mistrust towards the West. The 1954 oil consortium gives Iran a nominal profit share, but operational control remains out of Iranian hands. The coup entrenches autocracy and sows the seeds of enduring anti-Western sentiment, which persists in contemporary Iranian politics.

  • “It entrenched all authoritarian rule in Iran and it left a deep legacy of mistrust towards Britain and the United States.” – Afua Hirsch [45:33]

• [48:06] Peter and Afua note how past interventions shape present-day attitudes and enable hardliners to paint all external involvement as predatory.

  • “It plays right into the hands of those in Iran who want no change, because now they can point to this history of Western intervention. They can point quite legitimately to the perception that the West wants to devour the country.” – Afua Hirsch [48:06]

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Timestamps for Key Segments

| Timestamp | Topic | | :-----------: | ----------------------------------------------- | | 00:31 | The overlooked centrality of the Middle East and Iran in global history; context for 2026 events | | 07:53 | The shift from coal to oil and its technological implications | | 10:04 | Ford’s assembly line and the transformation of mobility/society | | 14:19 | Oil’s role in military and imperial strategy (WWI and Churchill)| | 19:18 | Geological factors underlying Gulf oil abundance | | 23:10 | William Knox D’Arcy and origins of Iran oil concessions | | 24:52 | Nationalization, control, and the roots of British Petroleum | | 29:51 | Persia to Iran: Identity, nationalism, fascist influence | | 36:09 | Nationalization crisis, Mossadegh, and Western reaction | | 41:35 | The coup against Mossadegh and its repercussions | | 44:06 | Legacies of intervention, autocracy, and mistrust | | 48:06 | How history shapes current Iranian-Western antagonisms |

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Notable Quotes & Memorable Moments

• On the present-day resonance of historical economic shocks:
  “If you look at the 20th century more through these politics, these economic shocks, these long, simmering fault lines, then I think it actually better equips you to make sense of what we're experiencing right now.” – Afua Hirsch [01:22]

• On the coup against Mossadegh:
  “It's a kind of coup that happens by mistake... and then the Shah flies back triumphantly convinced that his people love him and want him back. And he draws all of the wrong lessons from this.” – Peter Frankopan [41:35]

• On oil’s role in shaping empires and exploitation:
  “The insatiable demand from oil is behind so much of the conflict, not just in the 20th century, but right up into the 21st.” – Afua Hirsch [26:30]

• On the legacies of Western interference:
  “It entrenched all authoritarian rule in Iran and it left a deep legacy of mistrust towards Britain and the United States.” – Afua Hirsch [45:33]

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Tone & Style Notes

• The discussion is accessible but rooted in solid scholarship, with frequent allusions to both personal and family stories (e.g., both hosts mention their fathers’ careers relating to geology).
• There’s an undercurrent of urgency as they tie the century-old history directly to the context and anxieties of 2026.
• The hosts encourage critical reflection on “legacy”—acknowledging both the intended and the unintended, sometimes troubling, historical outcomes.

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For Further Listening

• The hosts mention a bonus episode for Legacy Plus subscribers, exploring surprising ways the 1973 oil crisis still shapes contemporary everyday life.
• They also recommend prior episodes on the Dardanelles (1915) and on Winston Churchill for deeper historical context.

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Summary prepared for listeners who want a deep, engaging, and nuanced take on the real forces—geological, technological, imperial—shaping our modern world, with the 1973 oil crisis and Iran at the center of the story.

Transcript

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[Peter Frankopan]

So, Apa, I guess when we think about the 20th century, we tend to think about Europe. You know, we've talked about that a lot and the rise of the West. But there is a part of the world that has been constantly significant from a point of view of economics, geopolitics, war, you name it. And that is the Middle east and in some ways, the 20th century. One of the themes that's run through it is not just the story of Iran, but the story of oil. And that's to do with the fluke of geology and of innovation, geopolitics, revolution, power, greed, and a lot more. So we thought it would be a good idea to really give the crisis of 1973 a bit of airtime because of what's going on at the moment in 2026 in Iran, and particularly with Hormuz, too. But I don't think we think too much about the central role that Iran has played in the course of the 20th century.

[Afra Hersch]

I think you're right, Peter. I think there's a way we still think about the 20th century, which centers around two world wars and the Cold War, and everything, all of the turmoil and conflict is seen through the prism of those three big conflicts. And actually, I think the inaccuracy of that is one of the reasons that at the moment, people are scrambling a bit to reconcile how uncertain everything feels. Because actually, if you look at the 20th century more through these politics, these economic shocks, these long, simmering fault lines, then I think it actually better equips you to make sense of what we're experiencing right now. I mean, as we're recording in 2026, people are really struggling to make sense of how uncertain everything feels and how extremely vulnerable we are to massive changes in the price of oil, to broader conflict erupting in the Middle East. And for most people in America, I mean, I've seen some interviews with Americans who really struggle to point to Iran on a map and yet are waking up to the reality that what happens there is going to have a direct impact on their daily life. So I think it's really important to correct that very narrow lens and broaden our thinking to the history that's got us here more through this lens of these economic experiences, these maybe more subtle conflicts, but that have very, very real economic consequences.

[Peter Frankopan]

We talked about it a bit on our episode on 1915 and the Dardanelles. But war drives all sorts of changes. And one of the stories of the First World War was about how things would end as a settlement. And the Western Allies in Europe carving up the Middle east to create entities that would allow access to deep water ports, to pipelines, to oil fields was a key part of it in the Second World War. One of the topics that I didn't get talked about enough is the fact that a lot of the German military offensives, particularly in the Soviet Union, was about trying to try to get to oil fields to fuel the German war machine and economy. And of course, in the Cold War, the underpinning of what was going on in key states in the Gulf was an important way in which competition played out between the US and the Soviet Union, too. So in some ways, oil, fossil fuels, the ability to try to influence global affairs is a key theme of the 20th and 21st century. And it's not just Americans, Afro, by the way, who find it difficult to point out where Iran is on the map. I've seen French lawmakers and MEPs being asked one after another to try to identify and pick where Iran was. And of the 20 I saw only two got it right. So this is a part of the world that is seen to be exotic, peripheral, not important in history. And, you know, we both talked about that a lot, too. But at the moment in 2026, seeing the global compression that's coming towards us, it's quite hard to predict how that will play out. We're now in April 2026, but it's not just about oil. It's about LNG or liquefied natural gas. It's about fertilizer, about helium, about things that get made with high levels of energy. And I think, well, let's hope that we're not heading for a depression that's going to rival or maybe be worse than the Great Depression of 1929, but it certainly looks like we're heading in that direction. But I think what these episodes tell us, all these episodes we're doing on economic shocks, is how rich the past is in teaching us some really important lessons of history and warnings.

[Afra Hersch]

So when I think about living by candlelight in European countries or in America, about power cuts, about fuel shortages, I think of rationing during the Second World War. I'm not thinking about 1973, but Peter you're a bit older than me. Do you remember 1973? And is that the scale of what we're talking about when that crisis unfolded?

[Peter Frankopan]

No, I don't. I was too young. I was only two years old. But as I got older, sort of the mid to late 70s, lots of those things, I hadn't kind of realized that that's where it came from, that there were short working weeks, that there was huge anxiety and social unrest, the governments were basically bust, that Britain was trying to work out how to keep the lights on and you know, large unemployment, stagflation. You know, I think I hadn't associated or realized where that came from. I was aware that this was part of a global systemic failure. And then the 1980s started to become something that again at the time I thought was about liberalization, that the governments had just been geriatric and not able to deal with realities. It took me a long time to realize that this was all connected into energy markets too. So I think it'd be great if we were to talk about this crisis today that has so many echoes of things from the past and of a global economy being held hostage. The sudden realization of the, not just the importance of the Gulf as a provider of energy and other things to aluminium, et cetera, but also how important geography is. As we talked about both with Suez and with the Dardanelles too. And of course to think about their legacies. And for those of you who are members of Legacy plus, by the way, AFWA and I are going to do a special episode where we talk about some of the consequences of what happened in 1973 that that shape some very unusual things and everyday things in our daily lives. I suspect, having talked about it, that a lot of those are going to be things that you don't realize. So please come and join us over on Legacy plus for some extra content and some more thought provoking material. Hello and welcome to a new episode of Legacy. I'm Peter Franker.

[Afra Hersch]

I'm Afra Hersch.

[Peter Frankopan]

And this is Legacy, the show that explores the lives, events and ideas that have shaped our world and asks whether they have the reputations that they truly deserve.

[Afra Hersch]

This is our series on economic shocks, 1973, oil and the 20th century before we understand why 1973 is a big deal with the big Legacy. Peter, I guess I just want to set the scene on how oil became in the 20th century such a critical commodity to the extent that the world economies stability depends on even small fluctuations in its price. So let's go back to Pre oil, when coal was the main game in town.

[Peter Frankopan]

Well, coal, as everybody knows in Britain, is the making of the industrial revolution. To be able to generate energy cheaply and plentifully is hugely important, but coal is very bulky and it's not as efficient as oil. The key bit that changes, I mean it all starts to get used, is in the 20th century. But the key development comes in 1876 when Nicolaus Otto develops the four stroke engine. And unlike steam engines, which require bulky boilers and long startup times, internal combustion engines burn fuel directly inside the cylinder. And that makes them much lighter, makes them faster and much more flexible. And so early fuels vary. There are lots of different types of petroleum products, but petroleum derivatives and particularly gasoline are far more energy dense and also much more portable. So that makes oil become really important to think about the world of the future. So today lots of people talking about critical minerals and rare earths and what we're going to need to generate huge power. But that that shift in the 19th and early 20th centuries is the same sort of question about therefore, where do these deposits sit, how do you exploit them? And also how can you scale things quickly? So there are some echoes today with new technologies too.

[Afra Hersch]

Well, if you think about oil powered cars, one brand that might spring to mind is Mercedes Benz. And that's a clue to some of the innovators behind this change. Gottlieb, Daimler and Carl Benz refined engines in the 1880s, making them the early versions of oil powered mobility. Before these oil powered engines, oil was mainly used for kerosene lighting. But of course the demand for that disappeared after electric lighting was invented. But when it came to vehicles, these had been powered by horses or by coal powered engines or steam locomotions for trains and other heavy machinery. So the invention of internal combustion engines fueled by oil was not just a technological change, but it completely restructured the entire economies. Peter how did that happen so fast and at such a massive scale?

[Peter Frankopan]

I mean, talk about legacies. That the transformation is both enormous and also very quick. And a lot of that has to do with scale. So perhaps the best example, and it's taught in every single MBA course and to everybody's study of business is about how you can develop things quickly. And Henry Ford with his assembly line is the kind of golden boy challenge of explaining how this all works. Where the Model T gets started in 1908, then gets moved to production line in 1913, starts to allow cars to become much, much cheaper and therefore more affordable. And that means that car ownership explodes. So in 1900. There are probably something like 8,000 vehicles in the US. 20 years later, there are something like 8 million. Each of these requires gasoline. So that means that oil turns from a niche commodity into something that is in huge demand and that creates a feedback loop. More cars mean there's more petrol demand. That means there's more drilling, refining. That means the costs of that comes down too. And there are so many unbelievable side effects that we, again, don't think about these magnitudes of change. Again, that's important in an age today where new technologies are making us think about whether life is going to be the same. But just in the course of ten years after, New York City completely changes, not just because people are driving cars, but because of things that then get replaced. Tell us a bit about that.

[Afra Hersch]

Well, you know, I'm an animal lover, Peter, and I just want to be a bit basic for a minute and ask, why? What happens to all the horses? Because around 1900, New York City needed around 120,000 horses pulling carriages and omnibuses and freight to keep functioning. Ten years later, they were basically gone,

[Peter Frankopan]

where they get gently retired. I'm afraid I've probably got bad news for animal lovers. That horse can be reasonably nice meat to eat. If you're from Central Asia, it's your. Is your protein of choice. But I'm afraid that it doesn't end very happily for many of those horses. But they basically, within the course of 10 years, they disappear. That changes everything. So 100,000 horses, that's a lot of hay that they need to eat. That's a lot of grooms that are required, that's a lot of blacksmiths and that then gets changed. So stables turn into garages for cars. Grooms, amongst other people, retrain to be taxi drivers, ferrying people around, blacksmiths to get great horseshoes. You need mechanics for cars. So you have a workforce that completely changes. But also afra, you get an amazing environmental change too. Right. Tell me about that.

[Afra Hersch]

And I just want to add, as well, as an animal lover, it is bittersweet because the way that horses were treated as working animals in the pre car era wasn't always wonderful. So I guess that there's two sides to that. But, yes, if you think about a city with 120,000 horses in it, think about the amount of manure, the amount of urine. Each horse is generating liters of urine a day, and it's not very sanitary. And actually, in the 1890s, there was the great horse manure crisis, where the streets became so clogged with Waste that flies spread disease and carcasses were left to rot. So the change in transport from animal to machine allowed cities to become developed as much healthier, more efficient spaces. And I also noticed the change in street layout, Peter. So, you know, I've spent a lot of time in Los Angeles in recent years and it's only that that's really made me appreciate how much living in London, our streets were not designed for cars. You know, my local main road has two lanes and when people park on one of them, it's kind of like a single main road. Even though you have like trucks, lorries, buses, as well as ordinary cars and bicycles all trying to get along it. The equivalent road in the US would be like a four lane street and probably have a space for vehicles offloading in the middle as well. And you really see these American cities that were designed in the era of the automobile have a completely different layout to our much older streets in England that were used for centuries of horse pulled carriages before cars had even been a thought. So it changes the way streets are laid out and in a less innocent way, it changes lots of other industries, especially warfare.

[Peter Frankopan]

Well, it's amazing, you know, cars today we think of as being polluting, but they were seen as a cleaner option than horses too. So. But as you mentioned, the military is key. So things like trucks, lorries and ships all require large amounts of refined petroleum. And in the case of Britain, which at this point rules the waves, they have a first order of the Admiralty, a young man called Winston Churchill. You can listen to our series that we did on him on Legacy, makes the decision that he wants to shift Royal Navy engines from coal to oil. This is just on the eve of the First World War and that's really important because it will allow ships to be faster, cleaner, operate at greater range, cheaper, and have greater operational flexibility too. And that then goes through, as we already mentioned, in the First World War, those that, that, that greedy eye on where there are going to be oil fields available to provide the backbone of what the empire will need. And so even by 1915 we'll come to Iran and Iraq too. But Mesopotamia specifically is being described as the first class war aim. So there's a lot of tension about where you could get hold of the materials you want. But as a result of all of this, the demand for oil spreads through a whole new system of global supply chains that get built up.

[Afra Hersch]

Oil expansion ranges from the US to Russia to what's now Kazakhstan, Banku to Persia, which is modern Iran and later the Gulf as well as in West Africa nations like Angola, Nigeria. And with that is the rise of oil companies. So Burma Oil, British Petroleum, Standard Oil and its successors are knitting together these disparate locations into this globalized energy system. They're connecting distant oil fields to urban consumers and making huge profits and becoming extremely powerful entities in the process.

[Peter Frankopan]

It's one of the great ironies of the British Empire that although it controls quarter of the globe world's territory on the eve of the first World War and has everything required to make Britain rich. Agricultural products, sugar, those have all changed over time. Cotton, textiles and so on. The one thing that's missing for pretty much all the parts of the British Empire, at least in industrial exploitative quantities at this point is oil. And that means that London Britain has to think quite carefully how to capitalize on a world where coal is the fuel, maybe not of yesterday, but is being surpassed by something that is going to give critical advantage. So Britain sees itself as a leader in science and industry. It's always been ahead of trying to make new discoveries over the course of the last couple of hundred years. New ways of thinking, innovations and not always made by scientists and by people developing things in laboratories. Often the great tinkerings through the industrial revolution made by small business owners realizing what could make things much more efficient. But some had realized that this was going to be a challenge to the idea of empire and even, even a threat to it. So when we come back, we're going to look at how Britain tried to solve its oil problem to see if it's going to be ready for the future and to think about some of the legacies that has that still run up to today.

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[Afra Hersch]

What do you want for dinner?

[Peter Frankopan]

Whatever.

[Afra Hersch]

I'm easy.

[Peter Frankopan]

How about Greek? Had it for lunch. Mexican? Yes, but not tonight. Chinese? Pass.

[Afra Hersch]

Japanese? Nah. Italian?

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Eh.

[Afra Hersch]

Indian? Indian. How about masala Place? Whatever. I'm easy.

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[Afra Hersch]

Peter, you mentioned critical minerals. If you think about today's world, where we hear so much about rare earth materials, about minerals that are Crucial for mobile and satellite technology, and how much power China has, how much control it's amassed over stores of those materials, over countries that produce them. It's a similar picture if you go back to the 20th century with oil. And it helps explain why Iran has been such a focal point for tension, for conflict and, and for these competitions over access and control.

[Peter Frankopan]

I mean, competition for resources, for an economic historian, is what makes the world go round. That starts to go back to the beginning of time about why people choose to live where they live and be able to protect their own resources and take them off other people. And so when you find new technologies or new types of resource, that starts to become important, then there's a scramble. And so, but it's a very old story, but a lot of this always starts with geology and planetary science. So I thought maybe it'd be useful to just quickly explain why the Gulf is so important and why it produces so much oil and gas that, you know, we don't find that in, you know, underneath Birmingham, but you do underneath Abu Dhabi. And the answer is that for tens of millions of years, the region that's now in the Gulf sat below a warm, shallow sea that was rich in plankton and algae. And when those organisms died, they sank and accumulated in thick layers on the seabed. And over time, that organic rich sediment starts to be the raw material that creates oil. And crucially, the process is sustained over very, very long periods of time, especially during the Jurassic and Cretaceous periods, which creates an unusually thick and continuous set of source rocks.

[Afra Hersch]

I'm actually reading a novel at the moment that's set on an oil rig, Peter, and it's weirdly fascinating, all of the detail about how these rigs drill down and extract this oil rich mud. And then they have to put concrete in to stabilize the seabed. And wherever there's oil, people have done whatever it takes to extract it because it is so valuable. And it's only really viable where the organic material as you described from these millions of years is buried, compressed and heated under the right conditions. And that helps explain why the Gulf has emerged as such a center for oil production. Because in the Gulf, the slow subsidence, so the way that the basin has sunk gradually has allowed sediments to build up layer upon layer over millions of years. And as this happened, the weight of the new layers compressed what lay beneath, increasing their pressure and heat. And over millions of years, it transformed this organic material into oil and gas because of these chemical changes happening deep underground. Did I get that right? I hope I Got it right, because my dad's going to be listening and he's a geophysicist, so he will definitely mark me if I make any mistakes.

[Peter Frankopan]

So funny. My father was a geologist and our dads would have got on, by the way. They would have, but always told me to think about rock formations and understand geology too. And so the Gulf is dominated by carbonate rocks, limestone and dolomite, that are very porous, and that means they can store large volumes of oil. But they're also permeable, which means that oil can flow through them if you, if you strike it. So these rocks form shallow marine environments and preserve their structure over time, allowing oil to accumulate in massive accessible reservoirs like those that you find in Iran and Saudi Arabia. And oil doesn't just sit where it forms, it migrates upwards unless it's trapped. So the collision of the Eurasian and Arabian plates, which also creates mountains like in the Zagros Mountains in Iran, produces folds and faults and dome shaped structures that act as natural traps. Those seal the oil underground, preventing it from escaping and allowing it to accumulate in enormous fields. So what makes the Gulf exceptional, that your dad will be able to tell both of us, is not a single feature, but it's the perfect alignment of multiple conditions of organic materials, long term sedentation, ideal reservoir rocks, effective trapping structures, and relative geological stability. That convergence is very unusual, and it's why this region has such a disproportionate share of oil reserves.

[Afra Hersch]

So there are unusual and rare coincidences of geological and historical conditions, but there are also rare coincidences of human ingenuity. Peter. And one of the people who really stands out in this history, who I learned about in your book Silk Roads, is William Knox Darcy. Can you tell us about him and why he's an important part of this story?

[Peter Frankopan]

He deserves an episode of his own. It's one of the great stories of not just the 20th century, but a man who had left England as a boy, made a fortune in Australia in the gold business, and had realized that there was this rising demand for oil, petroleum derivatives all over the world, and figured that he would be able to get in on it. To cut a long story short, in 1907 he strikes gold, or black gold. I call it Silk Roads. I think I'm not the first person to come up with that as a label, but strikes oil. And it's the key part of what all of this actually traces back to, because to be able drilling for anything is very expensive and investors like to know that they've got their risks protected. So Knox Darcy in 1901, had agreed a concession with the Shah of Persia that he would have the rights to prospect, explore, exploit and transport and sell natural gas, petroleum, asphalt and mineral waxes from Persia, or most, almost all of Persia for 60 years. And that meant that when he got, I was going to say lucky, when he found what was already, what had always been there, in 1907, he suddenly is in a position with the opportunity to have others who want to get in on the action. And one of the first people, you won't be surprised, afwa, who pays attention is the apparatus of empire.

[Afra Hersch]

So in 1914, the British government is eager to secure the supply of oil, especially for the Royal Navy. This is the era of the First World War in which naval superiority is crucial to Britain and naval superiority requires oil for British ships. So the British government acquires a 51% controlling stake in the Anglo Persian Oil Company, which, if it sounds like a kind of equal relationship between Persia and the UK is never that and definitely doesn't stay it for long because it becomes a strategic arm of the British state and will later be known as, as British Petroleum, a company you might know as BP.

[Peter Frankopan]

So by the 1920s, Britain treats Iranian oil not just as a commercial asset, but as a pillar of national security and of global power projection. A lot of that afraid, as you mentioned, is to do with the Royal Navy and control of the seas, but it's also to do with industry and it's also to do with making sure that your rivals and your competitors don't get hold of it too. But of course, that creates an obvious tension that is perhaps not so hard to see with the benefit of hindsight, and certainly wasn't hard to see from Tehran. But what seems valuable and controllable and necessary to London is seen in Iran as an infringement on its sovereignty. Over time, those. Those form into tensions where people in Persia, which later gets called Iran, want to have a greater share in the profits and the iniquity of having their, their resources used by other people to reinforce their position is something that generates a lot of animosity.

[Afra Hersch]

Peter I don't know if you've read the book or seen the movie Killers of the Flower Moon. It's a completely different story in a different place. It's set in Oklahoma in the 1920s, the same era, but in the US and it's oil that's being extracted from lands that are owned by the Osage and Native American community. But I raise that because when you talk about that asymmetry, it's so important to remember this is an era that's the peak actually of imperial ideology, these ideas about racial superiority. And you know, if you're listening to this thinking, how could Britain feel entitled to the oil of another sovereign state? It's partly because of these ideas that Britain was destined to rule the world and that Britain's needs are more important than the needs of this country in Asia. Just like white Americans thought that their needs trumped the needs of the Osage, even though theirs was the oil owning land. And it's an era where many of these deep inequities turned into essentially nefarious deal making takeovers, multiple ways that powerful nations and groups secured their access to oil kind of at whatever cost, whatever it took. Their need for oil, their insatiable demand for oil, always won. And you know, that doesn't sound that unfamiliar now when you look at how the unstoppable demand from oil is behind so much of the conflict, not just in the 20th century, but right up into the 21st. But anyway, to go back to the 1920s and the early 1930s, Iran was not content to sit back and let Britain help itself to its oil without treating in any way like an equal and actually taking over more and more control of this hugely strategic resource.

[Peter Frankopan]

Look, I think some of this has to do with what you get paid. I mean, it is the technology, the exploitation of resources. It's about making sure that profits are shared and there are benefits for everybody. And the problem is that when there's ever money involved, not just within imperial organizations and states, but also within companies, is that people get greedy quickly. So what the British do, apart from the fact that Persians start to complain about this profit share, is they use fancy accountancy to make sure that they're paying absolutely as little as possible. Now, whether that would have made a great difference, it's not quite clear. But by 1933, pressure is such that a forced renegotiation has to happen. It extends, it creates a new concession that gives the British the rights until 1993, another 60 years. But that still intensifies the sense that there is a long term economic subordination. And it involves again, like I said, lots of dodgy accountancy. It's very unbalanced. It's the Brits, of course, have wanted to get out as much as they can as cheaply as possible. And they do view the Persians as people who are unreliable in business and they're hysterically corrupt and project all these kinds of ideas onto them. Whereas of course, the way The British are doing things are more corrupt than sin. But that process of Western interference on its own being one thing, but then manipulation of the books is another one. And that is obvious because London is booming. We talked about dickens in the 19th century. You reminded us absolutely rightly that when you start to see things and infrastructure being built in one part of the world, the places where those materials have come from are usually being left behind. Do people know that in Iran?

[Afra Hersch]

Peter, We've been using the terms a little bit interchangeably. We've tried to stay accurate to the specific period, but we've been talking about Persia and then we've been talking about Iran. Can you just talk to us about the moment that Persia's name changes to Iran and where Iran, which is, of course, how we know the nation today, where that name comes from, because it's a history that I think many people don't fully appreciate and. And kind of an unlikely one.

[Peter Frankopan]

It's probably a good moral in. In understanding history as well, because Persia, as everybody hopefully will know, is the name of a great empire going back two and a half thousand years. In the 1930s, there was one man in the world who was seen with a lot of admiration, not just in Europe, but in many other parts of the world, too, not least in Iran. And some of the things he talked about were about racial purity and Aryanism. And the Shah in Iran was very taken by the ideas of Adolf Hitler of rejuvenating lost empires and bringing back a Third Reich in the case of Hitler. And in fact, Hitler was extremely popular all over large parts of the Middle east, partly because of his anti Semitism. That appeals to many people, too. So in 1935, the name of Persia is changed to Iran, which means the land of the Aryan people, Iran. And probably on balance, that didn't do much for the branding because Persia is a great historic name. But it's a way. It was a way also of saying that this is a new state that is still proudly Persian, but it's time for a new era at a time for a new change. So at that time, the Anglo Persian Oil Company, or apoc, is renamed as the Anglo Iranian Oil Company, aioc. And in fact, lots of my colleagues will call it the Anglo Iranian Company and it's the Iranian people, which is, again, how Persia can actually make things a little bit easier. But in the Second World War, Iran becomes a geopolitically sensitive location too, because it's a conflict of getting allied material to help the Soviet Union. But after the Second World War is Over there's new discussions around economic sovereignty. And that's in a context, Afwa, of decolonization too.

[Afra Hersch]

This is now a totally new era where countries with all of these diverse relationships with colonialism, you know, there's a difference between the West African states that were regarded as model colonies like Ghana. It's such a weird idea to me that, you know, your subjugation happens in a model way, but all the way to the Middle east where there was a different model but a similar pattern in that Britain, as we were saying, was controlling key assets, key infrastructure and resources and exploiting them for its own interests. This is the era where a new generation of intellectuals is finally able to leverage the post Second World War order to change that balance. They want independence. They have a narrative about sovereignty. And helped of course by the fact that this is ostensibly the language with which the Allies fought the Second World War. So they're now using that for their own advantage. And among their central demands are the ability to control their own resources. So by 1950, there are calls for the AIOC to have its accounts audited and for its terms to be renegotiated. And this isn't just a fringe demand. It becomes central to the political discourse in Iran and the idea of its future sovereignty and independence.

[Peter Frankopan]

And part of the problem is that those demands or requests to renegotiate don't have any leverage. There's no ability to influence what it is that outside interests want to do. And again, that's something that has a long history and legacy that survives into deep, into the 20th century and the 21st century where Iranian officials are convinced that they're being double crossed by the west who are out to try and take all their resources off them. We've heard that being said a lot over the course of recent months too. And this is obvious at a time when Abadan, run by the Anglo Iranian Oil Company, is the largest refinery in the world. It processes vast quantities of crude and those benefits are being flowed through to other people. So although Abadan is a key part of the global energy network and supply, it's symbolic in Iran of global imbalances of a massive industrial complex on Iranian soil that is largely controlled by and profits Britain. So when we come back, we're going to talk about how the breakdown of negotiations radicalizes opinions and sets things in motion for the nationalizations of the early 1950s, which itself you can't understand 1973 or 2026 without understanding those.

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[Afra Hersch]

So, Peter, you talked about how there is great demand in Iran for the balance of power to shift in control of the Anglo Iranian Oil Company, but not the leverage to enforce that change. By 1950, this impasse reaches boiling point. At this point, Iran is only receiving 16 to 20% of the profits from its oil, while Britain's tax revenues alone from the company exceed the totality of what Iran is earning in royalties. So that's a really triggering situation for the Iranian people. And you know, the difference between this and maybe other colonial extractions like cocoa or gold is that oil is industrial, it's huge, it's visible, it's very, very easily identifiable infrastructure that kind of sits in the country as a constant reminder of how much wealth is coming from their land without them receiving the benefits in income. So before the break, we mentioned this supplemental agreement in 1949, Peter, that proposed modest improvements. But why didn't this transpire into any satisfactory change?

[Peter Frankopan]

Because if you, to put it bluntly, if you can't force someone to do something at the negotiating table, you've got to think a bit more radically. And that's what happens in Iran. So in March 1951, the Majlis, or the Parliament, led by a broad nationalist coalition, votes unanimously to nationalize the oil industry. And at the forefront is Mohamed Mosaddegh, who's the Prime Minister of Iran. He's from an old Iranian family, he's a lawyer and he's a long term critic of foreign concessions. He's appointed Prime Minister soon after. And his argument is simple and powerful, which is that no independent state should allow its principal resource to be controlled by a foreign power. And nationalization has overwhelming support from Iranian people. And the British don't know quite what to do. So to start with, they think about whether they should have a military intervention. They draw up the plans for something called Operation Buccaneer. We talked last time about the British and Suez thinking that military force would be a good response. But in a post Second World War period, there's exhaustion, it's expensive, there's an attempt to see if there are other ways of doing things. And the Brits fall back on something different. And they engage in what I think today would be called lawfare. So they bring in the United nations, they go through the international cause of justice. Mosaddegh then tries to negotiate and tries to put the Iranian case forward. And so the Brits then tries something different. It tightens the screws, so it withdraws the technicians from Ramadan, imposes a global embargo on Iranian oil, and it warns companies and tanker fleets that if it ships Iranian oil, they will be sanctioned and penalized. This has some obvious echoes today of how economic coercion works. The impact is completely devastating.

[Afra Hersch]

I just want to take a moment, just. Well, there's two things that feel like we should mention. The first is that Mossadegh is not in an era where there are plenty of very radical, socialist, revolutionary leaders demanding greater independence of their countries. Mossadegh is not in that camp. He is, as you said, Peter, from an aristocratic background. He favours the rule of law. He wants to nationalize oil in his own country for the benefit of his own people. But he's not this kind of irrational firebrand that's out of control. And the second thing is, I'm really curious, what is Britain's narrative as to why it is justified to impose punitive measures on a country that is nationalizing assets within its own territorial boundaries? Because I could see why that is, you know, maybe even a breach of contract. It's a corporate law issue. It's harder to see why it justifies basically massive punitive measures on the international stage.

[Peter Frankopan]

Well, we, when we get Donald J. Trump to come and join us on our podcast, we can ask him. I think that's how, that's how this is how the might is right mindset works, which is that this is something we've had, we're entitled to it. So I don't think a great deal of thought is given to what it is that Iran should get in return. Mossadegh is a bit of a polarizing figure in Iran. And he then, and, and now we spoke to Ali Ansari and to Krista De Belleg in our, in our podcasts to talk about Iran. Mossadegh is a kind of central figure because of, because of what happens next. So although he is from an aristocratic family, he's also, to English eyes or British eyes, a figure from sort of central casting. He's described as reeking of opium. You know, he's seen as being lazy and scheming and shrewd and he's self serving in his own right. But what happens now with the British putting the screws on the Iranian economy is that the production of oil goes from more than 600,000 barrels a day to almost zero in the space of A few weeks that cripples state revenues in due course under a new president in the United States under Dwight Eisenhower. General Eisenhower. The Americans see this through a different lens. They are worried that Iran might fall to the Soviet Union. There's a hardline Communist party for today in Iran that's been very powerful. The CIA drew up plans with the help from Britain's MI6, something called Operation Ajax, to get rid of Mossadegh. And it's led on the ground by Kermit Roosevelt, the son of President Theodore Roosevelt. And it involves propaganda leaflets on the streets, pay people to rise up, bribery politicians and military officers. And the plan goes immediately, badly wrong. Bossadex being tipped off. The officer said to arrest him gets detained himself, and the coup seems to fail. The Shah gets so worried, he panics, packs one pack of socks, goes to Baghdad, and then flies off to Rome, where he's photographed, you know, looking glamorous rather than fighting for his own people. And in the days that follow, power hangs in the balance. Effort.

[Afra Hersch]

Mossadegh supporters take to the streets, and their ranks are swelled by the Communist Tudeh Party, who's equally mobilized. And they're together organizing demonstrations and even attacking symbols of monarchy. And this now alarms conservative forces, the clerics, the merchants, and parts of the military, who might have been okay with the nationalization of oil, but are certainly not okay with revolution and the mass mobilization of ordinary people. And even though Mossadegh is not a communist, he doesn't fully suppress the Tudeh. And that later proves politically costly because it helps Britain and the US portray this as a crucial battle for control in this new Cold War context.

[Peter Frankopan]

And on the 19th of August, large crowds, some paid for and organized by the CIA, some local Tehranis out on the streets filled capital, chanting in favor of the Shah. And at that point, army units start to switch sides. Tanks and troops loyal to the royalists move into key positions, and fighting breaks out around Mosale's residence. And it's a kind of coup that happens by mistake. Mossadeg, it's like a comedy film, escapes River Garden Wall, but then surrenders the following day. And then the Shah flies back triumphantly convinced that his people love him and want him back. And he draws all of the wrong lessons from this, rather than thinking this is a moment where reform is necessary, some real thought into what it is that is good for the people in Iran. In fact, he uses this as an opportunity to strengthen his own power. He thinks his authority is absolutely unchallengeable, and he becomes increasingly autocratic. Too backed by Western support that now sees him as a man who they need to invest into to make sure that Iran stays both non communists, but also keeps pumping the oil. So Mossaddegh is put on trial in front of a military court. He uses it as a platform to defend nationalization and Iran's sovereignty. But he still gets sentenced to house arrest and three years in solitary confinement.

[Afra Hersch]

I suppose by the scale of deposing leaders in this era, the way that Mossadegh is treated is not the worst. I mean, if you think of what the Belgians and the CIA did to Patrice Lumumba in the Congo, assassinating him and then dissolving his body in a vat of acid so that only one tooth was left. You know, Mossadegh is allowed to live, but he's removed from political life. He's essentially decapitated as a politician, if not as a living person. And when he dies in 1967, he's denied a public funeral, just given a simple burial at home. So it's a different kind of death to which he's sentenced. And it really is something that's still remembered because it's a symbol of how countries like Iran, like so many in this decolonizing era, were not allowed to live out the natural flow of their own politics, their organically elected leaders, whether those leaders would have turned out to be a good thing or a bad thing. Of course, these countries wanted the right to self determination, which includes the right to make their own mistakes, as well as the right to, to make good choices. And this intervention is one in a huge catalog that denies people that. But this one, unlike others, still has such lasting effects today. Peter.

[Peter Frankopan]

I mean, through the 1970s and to the end of the 20th century, Mossadegh becomes a symbol of the ways in which the west will manipulate Iran and its leadership. And in fact, when we're talking to, again, to Al Ansari and thinking about warm Mossadegh's legacy is today, you know, he's more or less disappeared because young Iranians think about things in slightly different ways. And he's a sort of figure from the very distant past now, 75 years ago. But, you know, he gets resurrected from time to time as a way of saying that this is what happens when you try to make change in Iran. And again, that's why this, what's happening now in 2026, has such residents. It's very different. I think we don't follow it the same way in the west, which is that this is part of a pattern of constant military Intervention, decapitation, specifically of the leader. We've seen Supreme Leader Ali Khamenei and many people in the leadership eliminated, as Trump and the IDF call it, without thinking about whether that's necessarily legal or justifiable, but also that you're looking for a regime that's going to be compliant and do what it is that suits the West. And so the ways in which Iran has been using its economic coercive levers itself to try and close the Straits of Horbuz or to hit targets outside Iran as a form of self defense looks and feels very different from the point of view of Iran. But it does lead Afro to some form of very modest improvement in the profit share. At least that's some kind of upside, but not much.

[Afra Hersch]

In 1954, a new consortium replaces the Anglo Iranian Oil Company. It's now renamed the name it still has today. British Petroleum. And Iran now nominally at least has a 5050 profit sharing arrangement. But operational control is still with Western companies. U.S. companies now join in and the coup has helped shore up Western access to Iranian oil, which is exactly what it was designed to do. And the cost is something that unsurprisingly, oil companies are not particularly worried about, but everyone else should be because it entrenched all authoritarian rule in Iran and it left a deep legacy of mistrust towards Britain and the United States. And Peter, just quickly, because I just never get tired of asking this question. We're in an era where the US is staging an intervention in Iran. Some Iranians support it because they want a change in the regime. They want to see the end of the Revolutionary Guard. It's just hard to imagine how any Iranian who has experienced this history could trust the US or European powers, even if they're doing the thing that in the short term they want, knowing how cynically they're willing to intervene always in their own interests.

[Peter Frankopan]

Look, I think one of the great human conditions is hope. And if you are outside, particularly if you're outside the country and have Iranian heritage, there's no question that the move away from the regime led by Khamenei and the irgc, that there's hope that things must get better. And let's hope those hopes are justified. There are plenty of Iranians within the country too who are keen for reforms and for change. I think it's the way in which it's being done is the big question. And whether impositions change are being bombed from above is likely to lead to a harsher regime or a more gentle or more moderate one. And I can tell you what I would bet on as a historian. Probably not that something fluffy and warm comes out the other side, but digging in. But a lot depends on how this exactly emerges. But I think it's right that the ways in which those legacies of failed interventions dressed up in the form of democratization or the spread of new ideas, but actually it's about taking control of assets. And again, we've seen Trump and others around him use that language very bluntly to say we're going to take Iranian oil and use it for ourselves. And that, I think, is a view of imperialism that looks bad to many people in the West. But in Iran it looks like it's the same old story all over again.

[Afra Hersch]

And it plays right into the hands of those in Iran who want no change, because now they can point to this history of Western intervention. They can point quite legitimately to the perception that the west wants to devour the country. And that's the language that they use because the efforts to seize its wealth have such deep roots and such questionable motives. And we'll see more about how that played out to wreak havoc on the global economy in the next episode.

[Peter Frankopan]

Thank you for listening to Legacy.

[Afra Hersch]

To hear more and support the show, please sign up to Legacy Plus. You'll get to enjoy brilliant bonus episodes early access, fewer ads, Q&As and more that only you subscribers can get. So go to Legacy Supportingcast FM and we have a special bonus episode on 1973 for Legacy plus subscribers that you will not want to miss.

[Peter Frankopan]

And on that we're going to talk about some of those surprising legacies that are part of our day to day lives. So do tune in and be the first people to be able to talk about that and show off when you see your friends in the pub. We're going to be back next time to talk about the oil crisis of 1973. But in the meantime, don't forget, you can watch all of our episodes on Spotify and YouTube too. And for anything else, including our substack and our updates on TikTok and Instagram, just check out the show notes or search Legacy Podcast. I'm Peter Frankenbern.

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