After World War I, Britain had a major interest in Iran because of its oil and petroleum resources. A deal between Britain and Iran provided Britain with generous profits from the Anglo-Iranian Oil Company in exchange for providing Iran with military and political support. Over time, a nationalist opposition to this external partnership grew and as this intensified the Minister of Defence in Iran, Reza Khan, who was pro-Westernization crowned himself the leader of Iran as Reza Shah Pahlavi in 1925 with the support from Britain. This was the end of the Qajar dynasty and the beginning of the Pahlavi dynasty which was to last until 1978. During Reza Shah Pahlavi’s leadership, Iran was in constant conflict with Britain, mostly because of the British influence on Iran through the Anglo-Iranian Oil Company. In a trial to distance himself from the British influence, the shah developed a strong alliance with Germany, and had close connections to the Soviet Union in the years of pre-World War II. At the outbreak of the war, the shah declared Iran to be a neutral country which led the Allies to suspect an Iranian-German cooperation. The Allies insisted that Iran should quit the cooperation with Germany but as Pahlavi refused, Britain and the USSR invaded Iran. Despite the pressure from the Allies, Reza Shah Pahlavi refused to cooperate with Britain and the USSR, and on September 16^th, 1941, he was forcibly dethroned and sent into exile. His son, Mohammad Reza Shah Pahlavi inherited the throne and was to be the ruler of Iran until the doom of the Pahlavi dynasty in 1978. 

 

After World War II, Britain and the US withdrew as they had promised, but the Soviet Reunion remained within the Iranian territory. In post-war time, Mohammad Shah Reza appealed to the UN for assistance, in order to relieve his country from the Soviet occupation. At the time, the US was the only nuclear power in the world, and a letter from President H. Truman to Stalin resulted in withdrawal of the Soviet troops as well. This success implied a further alliance between Iran and the US. 

 

 The British influence on the oil industry in Iran still caused tension throughout Iran. The politician Muhammad Mosaddeq had become the leader of a movement to nationalize the Iranian oil industry and to have Britain removed. In 1951 he was appointed as the Prime Minister by the shah and in 1953 he had nationalized the Iranian oil industry. The support for Mosaddeq grew intensively in Iran and riots forced Mohammad Reza Shah Pahlavi into exile in 1953. The exile lasted only for a day, due to US’s interference and use of CIA to overthrow Mosaddeq, as they perceived the shah to be the only reliable leader in the Middle East as well as the one who supported their interest in the Iranian oil industry.