In order to help you understand why the relationship between the US and Iran is so significant for the world, we’ll go through why Iran is strategically important, the history of the relationship, why the US walked away from the nuclear deal with Iran, and other tensions that have foreign affairs and military experts worried.

Why is Iran an important location?

Since ancient times, the Middle East has been both an important location, being the birthplace of three major religions (Judaism, Christianity and Islam), as well as a strategic one, naturally forming a major trade route, as it connects the European and Asian continents. In modern times, the Middle East has emerged as a particularly important region as it produces a majority of the world’s oil.

Wonder why Iran and the US are so itchy and scratchy? We’ve pulled together a Squiz Shortcut to get you across it in 10 minutes. Spoiler alert: Ben Affleck gets a mention…

Along with Saudi Arabia, Iran is one of the larger countries in both landmass and population within the region, and sits in a particularly strategic location at the crossroads of the Middle East and Asia and so exerts considerable power and influence. Iran also has the third largest reserves of oil in the world, as well as the second largest reserves of natural gas. 

What is the nature of the alliances in the region?
While Sunni-dominated Saudi Arabia is considered the biggest power in the Middle East, Shia-dominated Iran has challenged this. The power play has led to a decades-long feud between the two nations, exacerbated by religious differences. Iran generally has a good relationship with countries that share religious beliefs and anti-US sentiments including Syria, Lebanon (and their political party Hezbollah), Kuwait, Iraq and Yemen. It has poorer relationships with neighbours and US allies Saudi Arabia, Israel, United Arab Emirates, Qatar and Jordan.

Give me the modern Iran backstory…
The US didn’t have much to do with Iran until the 1950s. At the time, although it was not a colony, Iran was heavily influenced by foreign powers such as Britain, who established the Anglo-Persian Oil Company (now known as British Petroleum or BP) in Iran in 1908 – the first company to extract oil from Iran. This meant that effectively Britain controlled much of the country’s oil industry. When the 35th prime minister of Iran, Mohammad Mosaddegh, was democratically elected in 1951, he nationalised Iran’s oil industry, renaming the company National Iranian Oil Company and removing Britain’s concessions.

By 1952, Mossadeq cut off all diplomatic relations with Britain, leading British and American intelligence agencies began working together to orchestrate a coup to oust Mosaddegh. Already a controversial figure in Iran, he’d also antagonised the country’s Shah (or king) Mohammed Reza Pahlevi with his anti-monarchy views and attempts to limit the powers of the monarchy throughout his prime ministership.

By August 1953, the Shah agreed to overthrow Mosaddegh and gave the US and Britain the majority of Britain’s restored holdings in Iranian oil. In return, the US provided funding to the Shah-controlled Iranian government. 

Over the next two decades, concerns built about the brutal and oppressive nature of the regime, as well as economic issues which saw shortages and rising inflation. In 1969, the Shah was forced into exile. Following a referendum on April 1, the Islamic Republic of Iran was formed, ending monarchy rule in the country and replacing a pro-Western authoritarian monarchy with an anti-Western theocracy.

And what’s the Iran-US story?
It wasn’t until that 1979 revolution that the US started considering Iran a threat rather than an ally. Over the next couple of decades, ties between the US and Iran were severed by a number of scandals.

In the aftermath of the Iranian revolution in November 1979, the US Embassy in Iran was seized by protesters who held American hostages inside for 444 days.

In 1984, the US Department of State added Iran to its list of state sponsors of terrorism, which meant that a number of sanctions were imposed on the country.

Despite the sanctions, Iran retaliated by continuing to develop its nuclear capabilities, with the US passing increasingly restrictive laws to stop Iran developing nuclear weapons.  

In 2004, secret nuclear facilities are discovered in Iran, after which the country agreed after negotiations with France, Britain, Germany and the EU to suspend its uranium-enrichment activities, albeit temporarily. And after years of talks, sanctions and more talks, a historic nuclear deal with Iran was signed that effectively limited Iran’s nuclear program. The Joint Comprehensive Plan of Action was heralded as a breakthrough. 

Where are we at now?
Tensions have been escalating between the US and Iran since US President Donald Trump removed the US from the Iran nuclear deal in May 2018, once more imposing restrictive economic sanctions on the country and the countries that trade with it. Since then, relations have worsened, with the US sending an aircraft carrier strike group and B-52 bombers to the Gulf region.

In May and June this year, six commercial oil tankers were seized by Iran in the region, with the US blaming Iran. And on June 20, Iran shot down a US drone it claims was in their airspace, which the US denied. 

In September 2019, a drone attack on Saudi Arabia’s biggest oil refinery, effectively halving their oil production, again has the US blaming Iran for the hostile act despite its denials and Iran-backed Houthi rebels from Yemen claiming responsibility. Both administrations are saying they don’t want war, with President Trump tweeting the US is “locked and loaded” if need be.