In 1935 APOC was renamed the Anglo-Iranian Oil Company (AIOC) when Reza Shah formally asked foreign countries to refer to Persia by its endonym Iran.

In 1901, William Knox D'Arcy, a millionaire London socialite, negotiated an oil concession with Mozaffar al-Din Shah Qajar of Persia.

In early May 1908, they sent Reynolds a telegram telling him that they had run out of money and ordering him to "cease work, dismiss the staff, dismantle anything worth the cost of transporting to the coast for re-shipment, and come home."

Churchill, as a part of a three-year expansion program, sought to modernise Britain's Royal Navy by abandoning the use of coal-fired steamships and adopting oil as fuel for its ships instead.

Although Britain had large reserves of coal, oil had the advantage of greater energy density, allowing a longer steaming range for a ship for the same bunker capacity.

In exchange for secure oil supplies for its ships, the British government injected new capital into the company and, in doing so, acquired a controlling interest in APOC.

[8] APOC took a 50% share in a new Turkish Petroleum Company (TPC) organised in 1912 by Calouste Gulbenkian to explore and develop oil resources in the Ottoman Empire.

[12] During this period, Persian popular opposition to the D'Arcy oil concession and royalty terms whereby Persia only received 16% of net profits was widespread.

Moreover, owing to the introduction of reforms that improved fiscal order in Persia, APOC's past practice of cutting off advances in oil royalties when its demands were not met had lost much of its sting.

In 1923, Burmah employed Winston Churchill as a paid consultant to lobby the British government to allow APOC to have exclusive rights to Persian oil resources, which were subsequently granted.

In 1928, the APOC's shareholding in TPC, which by now was named Iraq Petroleum Company (IPC), would be reduced to 23.75%; as the result of the changing geopolitics post Ottoman Empire break-up, and the Red Line Agreement.

In fact in the midst of the negotiations in 1930, the Iranian National Consultative Assembly approved a bill whereby foreign companies would be required to pay a 4 percent tax on prospective profits earned in Iran.

In 1931, Teymourtash who was travelling to Europe to enroll Crown Prince Mohammed Reza Pahlavi at a Swiss boarding school, decided to use the occasion to attempt to conclude the negotiations.

According to Cadman, Teymourtash worked feverishly and diligently to resolve all outstanding issues, but succeeded only in securing an agreement in principle while key figures and lump sum payments were not settled.

Matters came to a head in 1931, when the combined effects of over-abundant oil supplies on the global markets and the economic destabilization of the Great Depression, led to fluctuations which drastically reduced annual payments accruing to Iran to a fifth of what it had received in the previous year.

Rejecting the cancellation, the British government espoused the claim on behalf of APOC and brought the dispute before the Permanent Court of International Justice at the Hague, asserting that it regarded itself "as entitled to take all such measures as the situation may demand for the Company's protection."

[citation needed] At this point, Hassan Taqizadeh, had been appointed the new Iranian Minister entrusted with the task of assuming responsibility for the oil dossier.

[citation needed] Under the 1933 agreement with Reza Shah, the AIOC promised to give labourers better pay, more chances for advancement, build schools, hospitals, roads and a telephone system.

The agreement guaranteed royalty payments would not drop below £4 million, reduced the area in which it would be allowed to drill, and promised more Iranians would be trained for administrative positions.

[19] In late December 1950, word reached Tehran that the American-owned Arabian American Oil Company had agreed to share profits with Saudis on a 50-50 basis.

[20] On 7 March 1951, Prime Minister Haj Ali Razmara was assassinated by the Fada'iyan-e Islam, a Shia terrorist organization that supported nationalization of the AIOC.

A raucous protest walkout by newspaper reporters ensued when a visiting American diplomat urged "reason as well as enthusiasm" to deal with the imminent British embargo against Iran.

The mud in town was knee-deep, and ... when the rains subsided, clouds of nipping, small-winged flies rose from the stagnant water to fill the nostrils .... Summer was worse.

Arriving in Tehran on 15 July 1951, Harriman claimed that the United States accepted nationalization of the concession but insisted on having "a foreign-owned company to act as an agent of NIOC in conducting operations in Iran".

[citation needed] Mossadegh expelled the British embassy in October 1952, checking further efforts by the UK government to internally undermine his regime.

It was alleged that if Iran fell, the "enormous assets" of "Iranian oil production and reserves" would come under communist control, as would "in short order the other areas of the Middle East".

[34][35][36] The CIA utilized information obtain from British intelligence and bribed politicians, soldiers, mobsters, and journalists to destabilize the country and consolidate opposition to Mosaddegh.

Under pressure from the United States, BP was forced to accept membership in a consortium of companies which would bring Iranian oil back on the international market.

[41][42] The founding members of IOP included British Petroleum (40%), Gulf Oil (8%), Royal Dutch Shell (14%), and Compagnie Française des Pétroles (now TotalEnergies SE, 6%).

However, the BTC undertook a series of strategic mergers, and coupled with the continued support of the Shah of Iran, the APOC succeeded in strengthening its position within the industry.