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Soviet Union

On 7 May 1972, Mohammad Reza told a visiting President Richard Nixon that the Soviet Union was attempting to dominate the Middle East via its close ally Iraq, and that to check Iraqi ambitions would also be to check Soviet ambitions. Nixon agreed to support Iranian claims to have the thalweg in the Shatt al-Arab recognised as the border and to generally back Iran in its confrontation with Iraq. Mohammad Reza financed Kurdish separatist rebels in Iraq, and to cover his tracks, armed them with Soviet weapons which Israel had seized from Soviet-backed Arab regimes, then handed over to Iran at the Shah's behest. The initial operation was a disaster, but the Shah continued attempts to support the rebels and weaken Iraq. Then, in 1975, the countries signed the Algiers Accord, which granted Iran equal navigation rights in the Shatt al-Arab as the thalweg was now the new border, while Mohammad Reza agreed to end his support for Iraqi Kurdish rebels. The Shah also maintained close relations with King Hussein of Jordan, President Anwar Sadat of Egypt, and King Hassan II of Morocco. Beginning in 1970, Mohammad Reza formed an unlikely alliance with the militantly left-wing regime of Colonel Muammar Gaddafi of Libya, as both leaders wanted higher oil prices for their nations, leading Iran and Libya joining forces to press for the "leapfrogging" of oil prices.

The U.S.-Iran relationship grew more contentious as the U.S. became more dependent on Mohammad Reza to be a stabilising force in the Middle East, under the Nixon Doctrine. In a July 1969 visit to Guam, President Nixon had announced the Nixon Doctrine, which declared that the United States would honour its treaty commitments in Asia, but "as far as the problems of international security are concerned... the United States is going to encourage and has a right to expect that this problem will increasingly be handled by, and the responsibility for it taken by, the Asian nations themselves." The particular Asian nation the Nixon Doctrine was aimed at was South Vietnam, but the Shah seized upon the doctrine, with its message that Asian nations should be responsible for their own defense, to argue that the Americans should sell him arms without limitation, a suggestion that Nixon embraced. A particular dynamic was established in American-Iranian relations from 1969 onward, in which the Americans gave in to whatever Mohammad Reza demanded, as they felt they needed a strong Iran as a pro-American force in the Middle East and could not afford to lose Iran as an ally. Further adding to the Shah's confidence was the Sino-Soviet border conflict of 1969, which forced the Red Army to make a major redeployment to the Chinese border. Mohammad Reza, who always feared the prospect of a Soviet invasion, welcomed the Sino-Soviet war and the resulting reduction of Red Army divisions along the Soviet-Iranian border as giving him more room internationally.

Under Nixon, the United States finally agreed to sever all contact with any Iranians opposed to the Shah's regime, a concession that Mohammad Reza had been seeking since 1958. The often very anti-American tone of the Iranian press was ignored because Mohammad Reza supported the U.S. in the Vietnam War and likewise the Americans ignored the Shah's efforts to raise oil prices, despite the fact it cost many American consumers more. After 1969, a process of "reverse leverage" set in, when Mohammad Reza began to dictate to the United States as the Americans needed him more than he needed the Americans. The American National Security Advisor Henry Kissinger wrote in 1982 that because of the Vietnam War, it was not politically possible in the 1970s for the United States to fight a major war: "There was no possibility of assigning any American forces to the Indian Ocean in the midst of the Vietnam War and its attendant trauma. Congress would have tolerated no such commitment; the public would not have supported it. Fortunately, Iran was willing to play this role." Consequently, the Americans badly needed Iran as an ally, which allowed Mohammad Reza to dictate to them. This experience greatly boosted the Shah's ego, as he felt he was able to impose his will on the world's most powerful nation.