The conclusion of the Second World War marked a significant turning point in global dynamics, particularly evidencing the decline of British global supremacy. Economic crises engendered by the war, coupled with the political repercussions of Indian independence, accelerated the dissolution of the British Empire. One salient indicator of this decline was Iran’s decisive move toward the nationalisation of its oil industry, a pivotal moment extensively analysed in this chapter. The Labour government in Britain, assuming power at the war’s end, aimed to revise its policies to maintain its monopoly in the Iranian oil sector by improving workers’ conditions. However, these efforts proved too limited and belated to effectively counter the rapid political developments in Iran, ultimately leaving Britain without a favourable strategic position in the Iranian context. The narrative then shifts to explore the working and living conditions within the Iranian oil industry in the late 1940s, highlighting the increasing poverty, entrenched housing, and health problems. It also examines the oil company’s response to the emerging labour movement and delves into the workers’ role in the nationalisation process. Additionally, the discussion encompasses the broader impacts of the withdrawal of British experts from Iran, focusing on the long-term effects on the lives and work of industry employees. These events significantly shaped the socio-economic landscape of the region and influenced the global power structures in the post-war era.

The establishment of landing sites for the Britain-to-Asia air route and burgeoning British oil production and exploration activities in the 1930s made the domestic stability of Britain’s protected states in the Gulf a far more pressing concern for Britain than before. Thus, as World War II approached, Britain was spurred to review its security arrangements in Eastern Arabia. War brought into sharp relief the fact that Britain’s interests in the area – primarily the burgeoning oil sector and the strategic air route – were starting to outgrow the naval-centric presence. Yet Britain remained reluctant to commit more military resources to the region, especially for internal security duties. To bridge this gap, Britain ramped up its pressure on the local rulers to enhance their indigenous capabilities to maintain order over their territories. Indian independence in 1947 profoundly affected British involvement in the small Gulf Arab states. Britain turned away from its previous hands-off approach to the internal affairs of the protected states as well as Muscat and Oman. The prospect that local governments might take on greater responsibility for their own security became increasingly attractive to Britain at a time when its ability to project military power abroad was diminishing.