Reza Khan ( Reza Shah ) who entered the Iranian politics as a result of the 1921 coup d ‘etat , became Prime Minister in 1923 and had his coronation in 1925 . First , he made all efforts to put an end to the activities of sheikh Khazal who considered himself the ruler of what he deemed Arabia , being the Khouzestan region of Iran , and had practically pulled Khorramshahr and Ahwaz out of the control and authority of the central government of Iran . The Sheikh was apprehended in early 1925 and spent the rest of his life in Tehran under house arrest . Reza Khan established a security system and order that in fact served the interests Of the oil company even more . The Government’s prevented workers from forming unions or voicing their objections . The first case of southern oil workers’ strike transpired in 1929 . Living conditions of local laborers were very poor and intolerable . The total number of oil industry employees amounted to 30,000, out of whom 6000 were British and Indian . Government forces put an end to the strike and about 200 instigators and inciters were arrested . Some of them were kept imprisoned until the end of Reza Shah’s rule .
A year after coronation , Reza Shah came to concentrate his attention on the issue of oil . He needed money for his ambitious plans of cross-country railroad construction and military reinforcement programs .The government initially believed that the oil conflict had to be referred to arbitration , but the company suggested that they should solve the problem through negotiations.