Chapter 10
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Translator: penny
Chapter: 010
Chapter Title: Conditions of the Coup. 7 - Oil Shock
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The Founding Committee.
The leaders and key figures from each political faction had gathered, and they poured out their worried concerns toward Khomeini, who sat at the head of the table.
- This is completely different from what we've discussed so far.
- That's right. What we agreed on was instilling a moral spirit of the law in those secularized people. Not something like this.
- We need to adjust our policies to fit the republican spirit. The ones we've put forward so far are far too steeped in religious color.
Resistance from the leaders of the factions who had joined the revolution.
But the position of the religious figures, who held the largest power in the committee, was unyielding.
- It's only natural for our followers to obey the law—how could they possibly rebel against that!
- Exactly. This is the kind of nonsense only those deranged fools bewitched by Western devils would spout. The more they resist, the harder we must push!
- For the law to stand firm, pain always follows. There's no reform without suffering.
With opinions clashing fiercely,
Khomeini, who had been silent, finally spoke.
"Some birth pangs are inevitable with reform."
- But even so, we haven't even drafted the constitution yet, and already there's this much backlash—what are we supposed to do!
- This is a revolution we all achieved together, but it feels like you're acting too unilaterally.
Grumbles erupted,
but Khomeini's voice remained unchanged.
"This level of resistance was already anticipated. We can't let it shake the ideology of the Islamic Republic. The vast majority of the people have already agreed to its founding."
- But that's...
- There's a lot of talk about those voting results.
Khomeini glared at his opponent.
"If you can't accept the results, then step forward now."
His tone was forceful.
No one who had resisted dared meet his gaze.
They all knew too well that those who opposed him had a way of vanishing without a trace one day.
Having quelled them once, Khomeini softened his voice again and said,
"Confusion, discomfort, and dissatisfaction among the people were all expected. Rather than trying to soothe it, it would be wiser to seek another path."
- Another path?
"They say dissatisfaction is like water. If you dam it up, it bursts—but if you open a channel just right, it lowers its own level."
- Open a channel...
- Ah...!
"A new era always begins by settling the past. First, we must purge every remnant of the royalists entirely. At the same time, their ringleader—the king who abandoned his people and fled. The culprit behind everything that's happened: Reza Pahlavi II. We must drag him here."
At the mention of summoning the king, people exchanged glances.
They agreed with the idea, but they also knew the practical limitations all too well.
- Reza Pahlavi II?
- But isn't King Pahlavi in Cairo, Egypt right now?
- How do you expect to bring someone who's in another country?
Reza Pahlavi II had fled abroad under the pretext of cancer treatment.
One among them offered a different opinion.
- Why not punish the Third Prince who's already here first...
Khomeini immediately bristled.
"Absolutely not!"
The man who had spoken was overcome with bewilderment at Khomeini's shout.
'What? He wants to bring back the king, but...'
However,
for Khomeini, the Third Prince was someone he absolutely could not touch yet.
'Not yet. The preparations aren't complete. Once we've fully seized control of the country, maybe—but touching the Third Prince now would do us no good.'
Perhaps feeling awkward about his sudden outburst, he cleared his throat.
"Ahem. The Third Prince's punishment must come only after the king's. Punishing him first would ensure the king never returns and would only give him justification for exile."
Having brushed it off roughly, Khomeini quickly changed the subject.
"We must focus on bringing back the king. The reason he can stay abroad is the massive fortune he siphoned overseas. American banks are holding it right now. We need to bring back the king and reclaim our national wealth hidden in America. To do that, we must pressure America and the West."
- How do we pressure America?
"If they don't meet our demands, we ban oil exports not just to America, but to every nation that supports it."
The room stirred once more.
An embargo.
A halt to oil exports.
Iran's daily crude production had stood at six million barrels.
Due to the revolution that had dragged on since last year, Iran's oil output had already dropped by nearly 30% from previous levels.
This had driven global crude prices up by 14%.
If Iranian oil's market supply shrank further and exports to certain countries were cut off entirely, it would undoubtedly deliver a massive shock to the U.S. economy and the world at large.
Khomeini was now declaring he would blackmail the entire world using oil as a weapon.
"Until our demands are met, we will completely halt oil exports to America and its allies."
The announcement from Iran's interim government, led by Khomeini, rocked America and the world.
- Extradite Reza Pahlavi II to the homeland immediately. Return the royal assets siphoned to America at once to our Islamic Republic. Until our demands are accepted, we will continue oil production cuts and export bans.
New York Stock Exchange.
With Iran's interim government enacting the oil embargo, crude futures on the New York exchange surged 17% in a single day.
West Texas Intermediate and crude from every major oil producer rose in tandem.
Oil majors hiked gasoline prices across the board.
Buy orders for traded crude futures exploded on securities markets.
The stock market, meanwhile, moved in the opposite direction.
Excluding petrochemical stocks, everything opened lower and continued sliding for days.
Among them, the auto industry saw the most pronounced drops.
- Ford down 11%.
- General Motors plunges 10%.
- Chrysler drops 12%.
The Big Three U.S. automakers' stocks plummeted,
and rising raw material costs hammered heavy industries like steel, shipbuilding, and construction in their wake.
With massive employers like autos, steel, shipbuilding, and construction taking hits, it shook the entire U.S. economy.
Tehran, Iran Royal Palace annex.
Officially under house arrest in the palace, all he could do inside was watch Iran state TV news.
The broadcast carried the announcement from Iran's interim government and the Islamic Republic Founding Committee.
Hassan, standing nearby, nodded and said,
"Just as Your Highness predicted. Who would've thought they'd actually go through with the embargo."
"Khomeini has this fearless streak about him. Religious types have that stubborn, bullheaded side, you know. Anyway, what's the situation outside like?"
"The New York exchange has been in a daily slump. London, Paris, West Berlin, Tokyo—all falling together. Especially in America, public criticism of their government for staying neutral with His Majesty the King is growing stronger by the day. If this drags on and His Majesty gets expelled..."
"Don't worry. That won't happen. No matter what, the U.S. government can't abandon Father."
"You think so?"
"Of course. It'd make them look ridiculous."
"Pardon?"
"If America gets pushed around by a bunch of religious fanatics and hands over an ally's leader, how pathetic would they look to everyone else?"
"Ah, I see. So it'll drag on into a prolonged standoff. The embargo hurts us too—not insignificantly. The Founding Committee made a bad move."
A export halt didn't just strike the target nations.
Oil exports were the backbone of Iran's economy, so in truth, Iran itself suffered the greater blow.
The Founding Committee had chosen to give flesh to take bone.
"It's not without merit. But calling it a total failure would be hard too."
"Why is that?"
"We've shown America and the West that we have a way to hurt them. Planting the image of us confronting a superpower head-on—that alone is a win."
"True enough."
"In the end, Iran and the world's citizens bear the pain, while Khomeini and the Committee reap the benefits. And now, we'll take ours too."
"Ours?"
"Yeah. How are our funds doing?"
"As you instructed beforehand, we sold everything before the crash, so no major losses."
Iran's embargo and production cuts were shocking global financial markets.
"Good. So we've got plenty of cash."
"Yes. But with the markets like this for the foreseeable future, reinvesting before the embargo lifts might be tough."
"Don't. Move the liquidated funds to Tokyo."
"Tokyo?"
"Japanese automakers. Invest there."
"Pardon? But with this oil price spike, autos are taking the biggest hit."
"That's for American gas-guzzlers with their awful mileage. Japanese cars are smaller, more efficient than U.S. ones. Gas prices won't drop anytime soon, so even free-spending Americans won't have much choice. And with better quality too? They'll switch to cheap, efficient, high-quality rides eventually."
"Makes sense. But..."
"Yeah? What?"
Hassan turned, his face etched with curiosity.
"Has Your Highness ever driven a Japanese car? How do you know so much about it...?"
For a moment, at a loss for words, he looked up at Hassan.
And then.
"That's just how the Japanese are. Small, eat little, work a lot."
Hassan pondered briefly, then nodded in agreement.
"Understood. As you command."