The Great Game in Iran

The “Great Game” is an established term in diplomatic and military history, widely used by historians, scholars, and foreign policy analysts to describe the strategic rivalry between the British Empire and the Russian Empire for influence over Central and South Asia throughout the 19th and early 20th centuries. The term was popularized by British novelist Rudyard Kipling in Kim (1901), but its usage traces back further — British intelligence officer Arthur Conolly is generally credited with coining the phrase in the 1830s, and it has since become standard terminology in academic literature, foreign policy discourse, and popular history alike. While the phrase often evokes images of espionage and diplomacy in Afghanistan and the mountain passes of the Hindu Kush, Iran (then Persia) was one of its primary battlegrounds — and arguably the country that suffered the most lasting consequences.

For Iranians, the Great Game was not a game at all. It was more than a century of territorial amputation, economic plunder, political subversion, and the systematic destruction of every attempt at self-governance — carried out by two empires that treated Iran not as a sovereign nation but as a buffer zone to be managed, divided, and exploited.

Understanding this period is essential because it established the patterns — foreign powers making decisions about Iran without Iranian consent, extracting wealth while blocking development, and crushing democratic movements — that would repeat with devastating consistency through the 1953 coup, the Shah’s reign, and into the present day.

The Strategic Context: Why Iran Mattered

Iran’s geography made it one of the most strategically significant territories in the world. It sat directly between the expanding Russian Empire to the north and British India to the southeast. For Britain, Iran was a buffer protecting the land approaches to India — the “jewel in the crown” of the British Empire. For Russia, Iran offered potential access to warm-water ports in the Persian Gulf, a centuries-long strategic ambition.

Neither power wanted the other to control Iran. But neither was willing to let Iran control itself.

Territorial Amputation: The Treaties of Gulistan and Turkmenchay (1813 & 1828)

The Great Game’s impact on Iran began with outright military conquest — by Russia.

The Russo-Persian War of 1804–1813 ended with the Treaty of Gulistan, which forced Iran to cede vast territories in the Caucasus to Russia, including present-day Georgia, Dagestan, and parts of what are now Azerbaijan and Armenia. Iran also lost its naval rights on the Caspian Sea.

Seeking to recover its losses, Iran launched a second war in 1826. It ended in catastrophic defeat. The Treaty of Turkmenchay (1828) imposed even harsher terms: Iran ceded the remaining Caucasian territories (the khanates of Erivan and Nakhchivan — roughly modern Armenia and the Nakhchivan exclave of Azerbaijan), paid a massive indemnity of 20 million rubles, granted Russia extensive commercial privileges and extraterritorial legal rights (capitulations) for Russian subjects on Iranian soil, and confirmed that Iran could not maintain a navy on the Caspian Sea.

The Treaty of Turkmenchay is widely regarded as one of the most consequential and humiliating events in modern Iranian history. It stripped Iran of nearly half of its historic Caucasian territories and established Russia as a dominant force in Iranian affairs. The treaty’s capitulatory provisions — granting Russian citizens immunity from Iranian law — became a template that other European powers would exploit for decades. The psychological wound was immense: a once-great empire had been reduced, in the span of a generation, to a state that could not defend its own borders or exercise full sovereignty over its own territory.

The Concession Economy: Selling a Country Piece by Piece

Having been weakened militarily, Iran’s Qajar dynasty turned to selling concessions to foreign powers — granting monopoly rights over entire sectors of the Iranian economy in exchange for cash payments and modest royalties. This created what historians describe as a “concession economy,” in which Iran’s resources and infrastructure were systematically handed to foreigners while the Iranian population saw little benefit.

The Reuter Concession (1872) — “The Most Extraordinary Grant”

In 1872, Shah Naser al-Din granted Baron Julius de Reuter — a naturalized British subject (and founder of the Reuters news agency) — what Lord Curzon, later Viceroy of India, called “the most complete and extraordinary surrender of the entire industrial resources of a kingdom into foreign hands that has probably ever been dreamed of, much less accomplished, in history.”

The concession granted Reuter exclusive rights for 70 years over virtually the entire Iranian economy: railways, tramways, canals, irrigation works, most mines, a national bank, and all future government industries. In exchange, Iran received a modest lump sum and 60% of net railway profits (from railways that did not yet exist).

The concession provoked such outrage — from both the Iranian public and from Russia, which saw it as a massive expansion of British influence — that the Shah was forced to cancel it in 1873. But the episode established a dangerous precedent: that Iran’s rulers would sell the country’s patrimony to foreign powers for personal enrichment, and that foreign powers would eagerly accept.

Reuter was later compensated with a new concession in 1889 that gave him the right to establish the Imperial Bank of Persia, which became the country’s central bank and had the exclusive right to issue banknotes — meaning a British-owned institution controlled Iran’s money supply.

The Tobacco Concession and Iran’s First Mass Protest (1890–1892)

In 1890, the Shah granted a complete monopoly over the production, sale, and export of all Iranian tobacco to a British subject, Major G.F. Talbot, in exchange for an annual payment and a share of profits.

The concession ignited Iran’s first mass anti-colonial movement. Merchants, clergy, intellectuals, and ordinary citizens united in opposition. In December 1891, Grand Ayatollah Mirza Hassan Shirazi issued a fatwa (religious ruling) declaring the use of tobacco to be tantamount to war against the Hidden Imam — effectively a religious prohibition. The boycott was so total and so effective that even the Shah’s own wives reportedly refused to prepare his water pipe. The tobacco concession was canceled in January 1892.

The Tobacco Protest is significant for several reasons. It was the first successful mass political mobilization in modern Iranian history. It demonstrated the clergy’s unique ability to organize nationwide resistance — a pattern that would repeat in 1953 and again in 1979. It also revealed the depth of popular resentment toward the concession economy and foreign exploitation. And it forced Iran to take out a loan from the Imperial Bank of Persia (British-owned) to compensate Talbot — creating a debt trap that further entrenched foreign financial control.

Iran’s First Democracy — Crushed by Empire (1905–1911)

The Constitutional Revolution (1905–1906)

By the early 1900s, decades of foreign concessions, royal corruption, and national humiliation had produced a broad coalition demanding reform. Inspired by democratic movements elsewhere and driven by economic grievances, Iranians launched the Constitutional Revolution of 1905–1906.

In August 1906, the Shah was forced to agree to the establishment of a parliament — the Majlis — and a constitution limiting royal power. Iran became one of the first countries in Asia and the Middle East to establish a constitutional, parliamentary system of government. It was a remarkable achievement.

It lasted barely five years.

Russia Bombards the Parliament (1908)

In June 1908, the new Shah, Mohammad Ali Shah — who opposed constitutional limits on his authority — used the Russian-officered Persian Cossack Brigade to bombard the Majlis building and arrest or kill constitutionalist leaders. The Shah’s counter-coup was carried out with Russian encouragement and support. Russia viewed Iranian democracy as a threat to its interests, fearing that a strong, independent Iran might resist Russian influence.

Constitutionalist forces eventually prevailed, deposing Mohammad Ali Shah in 1909 and restoring the Majlis. But the damage had been done — and worse was to come.

While Iranians were fighting for constitutional government, Britain and Russia were negotiating the Anglo-Russian Convention of 1907 — an agreement that divided Iran into spheres of influence without consulting or even informing the Iranian government.

Under the convention: - Russia received a sphere of influence over the entire northern zone of Iran, including Tehran, Isfahan, and the most economically developed regions. - Britain received a sphere of influence over the southeastern zone, protecting the approaches to British India and the emerging oil regions. - A “neutral zone” was designated in between — neutral in name only.

The convention was not a treaty with Iran. Iran was not a party to it. It was an agreement between two empires about how to manage a country they regarded as a buffer state. The Iranian Majlis protested the convention, but its objections were ignored.

Morgan Shuster and “The Strangling of Persia” (1911)

In a final attempt to assert financial independence, the Iranian Majlis hired W. Morgan Shuster, an American financial administrator, as Treasurer-General in 1911. His mandate was to reform Iran’s chaotic finances, establish an independent tax collection system, and break the stranglehold of foreign financial control.

Shuster was effective — too effective. When he attempted to collect taxes from powerful figures with Russian connections and moved to establish a national gendarmerie, Russia issued an ultimatum demanding his dismissal. Britain supported the Russian position. Faced with the threat of full Russian military occupation, the Iranian government was forced to dismiss Shuster in December 1911.

Shuster documented the entire experience in a book titled The Strangling of Persia (1912), in which he wrote:

“It was obvious that the people of Persia deserve much better than what they are getting, that they wanted us to succeed, but that the British and Russian Governments were determined not to let us succeed.”

He described how the two empires systematically undermined every Iranian attempt at self-governance:

“The Imperial Bank of Persia was essentially a tool of the British government…the Russians maintained their grip through the Cossack Brigade and through economic pressure…between them, these two Powers left Persia scarcely a shred of sovereignty.”

The dismissal of Shuster effectively ended the Constitutional Revolution. Iran’s first experiment with democracy was over — strangled, as Shuster put it, by the very powers that would later claim to champion democratic values.

Curzon’s Vision: Iran as a British Protectorate (1919)

After World War I, during which Iran had been occupied by British, Russian, and Ottoman forces despite declaring neutrality, British Foreign Secretary Lord Curzon attempted to formalize British dominance.

The Anglo-Persian Agreement of 1919 proposed to place British advisors in control of Iran’s military, finances, and infrastructure — effectively making Iran a British protectorate. Curzon privately viewed Iran as vital to the defense of India and the control of Middle Eastern oil. He secured the agreement by paying substantial bribes to three senior Iranian officials, including Prime Minister Vosuq od-Dowleh.

When the terms became public, there was widespread outrage in Iran and internationally. The Majlis refused to ratify the agreement, and it was eventually abandoned. But the episode confirmed what many Iranians already believed: that Britain’s interest in Iran was fundamentally imperial, and that Iranian sovereignty existed only to the extent that it was convenient for foreign powers.

The Pahlavi Transition: From British Client to American Client (1921–1953)

In 1921, Reza Khan — an officer in the Russian-trained Persian Cossack Brigade — seized power in a coup. By 1925, he had deposed the Qajar dynasty and crowned himself Reza Shah Pahlavi. While he pursued genuine modernization and centralization, his rise was facilitated by British support. General Edmund Ironside, commander of British forces in Iran, played a key role in enabling the coup, viewing Reza Khan as a strong leader who could stabilize Iran and protect British interests.

Reza Shah modernized the army, built railways, and established a centralized bureaucracy, but he also banned political parties, censored the press, and accumulated enormous personal wealth from land seizures. His relationship with foreign powers was complex — he sought to play Britain and Russia against each other while building national independence.

In 1941 Britain and the Soviet Union invaded Iran, deposed Reza Shah over his perceived pro-German sympathies, and installed his young son. After the war, when Britain’s global power waned, the United States increasingly assumed the role of dominant foreign actor in Iran — leading directly to the joint CIA-MI6 coup of 1953.