The Eisenhower administration’s covert strategy was first applied in Iran where the stability of the shah’s regime was deemed essential from the American national security perspective.

Because Eisenhower’s new emphasis on covert action proved capable of resolving potential revolutions in America’s favor, the strategy came to dominate much of America’s activity in the Third World during the remainder of the Cold War.

Shortly after CIA intervention resolved Iran’s domestic leadership crisis to the shah’s advantage, the Americans, fearful of Soviet ambitions, entered into an agreement, making Iran the nominal owner of its own oil.

But — the agreement also gave six US companies a lucrative 40 percent share of the National Iranian Oil Company (NIOC) consortium.

The agreement did allow Iran, though, to accrue much higher oil revenues, a condition that enabled the country to finance the arms expenditures and military build-up which occurred in the 1970s.

At this early point in the Cold War, issues of national security clearly meshed in America’s political consciousness with interests which later took on overriding economic importance.

It was not until the 1960s that the multinational corporation became a mechanism for the achievement of Cold War strategies and objectives.

And — not until the 1970s did exorbitant oil revenues combine with the goals of Third World governments and the multinational corporation to create almost unlimited opportunity for the international defense industry in the Third World.

Although Stalin appeared to be resolute in his determination to protect Soviet oil revenues, in reality, he was much more concerned with dominance and prestige. As the Soviet scholar Georgiy Mirsky argues: “Oil was not so terribly vital to the interests of the Soviet Union … The USSR had plenty of it to begin with.”

Stalin’s refusal to withdraw his troops from Iran had most to do — not with oil — but with his concern over Iran’s position vis-a-vis the postwar balance of power. His recalcitrance regarding troop withdrawal  led to a debate in the Security Council of the United Nations, the first test for the infant organization.

During the Security Council debate, the United States provided support and leadership, at the same time becoming inextricably embroiled in Iran’s domestic politics.

The Soviets finally promised to withdraw their troops.

The USSR left the region in May 1946 after the Iranians promised them an oil concession.  There was a caveat: the concession was subject to approval by the Iranian Majles.

In December 1946, Stalin suffered a diplomatic defeat when the Majles refused to approve the concession.

Iran’s situation remained precarious. Riots occurred throughout the country.

Iran’s largest tribe, the Qasha’i, revolted in the south in opposition to government policy regarding Iran’s communist leaning party, the Tudeh Party. Meanwhile, the Tudeh held daily demonstrations in most of Iran’s large cities.

In order to show its support for the shah’s government, the United States decided “that a limited amount of armaments not to exceed $10 million in value would be sold to Iran. The United States would also give favorable consideration to the credits necessary to furnish such arms.”

Based on the American showing of support, the Iranian government sent security forces into Azerbaijan, finally suppressing a Soviet-sponsored revolt.

In addition to the $10 million in armaments mentioned above, in 1947, the United States provided Iran with a $51 million credit for the purchase of weaponry and associated expenditures. Subsequently, American resources poured into the country, enabling a build-up of Iran’s armed forces.

Over the next three years, Iran rapidly evolved into a state consumed by issues of national security. The shah embraced American assistance as a means of eliminating the Soviet presence in his country, preserving the integrity of Iran’s borders, and solidifying support for his policies internally.

The Iranian air force increased its fighting force fivefold, the army was modernized, and the navy was expanded.

Meanwhile, the United States, moving into the great power position that Britain could no longer maintain, had survived its introduction to realpolitik in the developing world.

The concept of balance of power and the strategy of containment took on increased meaning as paradigms for success in dealing with the Soviet Union — especially in the Third World.

The take-away: precedent was established in Iran regarding the importance of economic and military support for Third World countries allying themselves with the Western security system.