Before He Was Deposed, The Shah of Iran Enjoyed A Staggeringly Extravagent Life Thanks To An Endless Gusher Of Oil Royalties

For much of history, the region we now call Iran was internationally known as Persia. And for much of history, stories abounded of oil bubbling up out of the ground, forming large black pools. Unfortunately, for much of history, oil was useless. It stained clothing, poisoned water, and fouled farmland. It was more of a nuisance than a commodity.

That began to change at the dawn of the 20th century. In 1908, Henry Ford's Model T began rolling off the assembly line. That same year, a vast oil deposit was discovered in southwestern Persia.

In 1914, the ruler of Iran was Ahmad Shah Qajar, the last monarch of the Qajar dynasty. But there was a problem. Ahmad had come to power just a few years earlier, in 1909, when he was 11 years old.

Because Ahmad Shah was young and politically inexperienced, real power during his reign often resided with foreign actors (especially Britain and Russia) had an outsized ability to pull Persia's strings.

So, that same year, 1914, Iran's tribal leaders and parliament struck a deal with the Anglo-Persian Oil Company, which would later become British Petroleum. The company began pumping and exporting Iranian oil to power the Royal Navy.

Ahmad Shah Qajar's reign ended in the early 1920s with the rise of Reza Khan Pahlavi. Keep that last name in mind for a moment.

Reza Khan was a military officer who seized power in a 1921 coup and, five years later, crowned himself Reza Shah, ending the Qajar dynasty and founding the Pahlavi dynasty. His rule marked the beginning of a new era in Iran, one defined by aggressive modernization, secularization, and centralization of power. He also sought to reduce foreign influence, though in practice, British interests—especially in oil—remained deeply embedded in Iran's economy.

In 1935, the country formally requested to be recognized as Iran by the international community. Derived from "Aryānā," which means "Land of the Aryans," that name had been in use for centuries in Persian literature and was the preferred name used by the people of the country. Furthermore, Reza Pahlavi wanted to shed what he viewed as colonial-era labels. "Persia" was seen as a European exonym — a name rooted in the ancient Greek "Persis," which referred to only one region (modern-day Fars province), not the whole country.

Determined to bring Iran's vast natural wealth under Iranian control, Reza Shah pursued policies aimed at curbing foreign domination, particularly in the oil sector. His growing insistence on renegotiating oil concessions alarmed the British, whose companies still reaped the overwhelming share of Iran's petroleum profits.

In 1941, Britain and the Soviet Union jointly invaded and occupied Iran, citing Reza Shah's perceived sympathies toward Nazi Germany. Under pressure, he was forced to abdicate and sent into exile. In his place, the Allies installed his 21-year-old son, Mohammad Reza Pahlavi, a monarch they believed would be easier to influence, especially on oil matters.

Initially, they were right, but by the early 1950s, nationalism was surging in Iran again, this time in the form of a popular prime minister: Mohammad Mossadegh. Backed by the parliament and a groundswell of public support, Mossadegh nationalized the Anglo-Iranian Oil Company in 1951, an audacious move that, if enacted, would have kicked out the British and the Americans altogether.

So what did the Brits and Yanks do?

In 1953, the CIA and MI6 launched Operation Ajax, a coup that deposed Mossadegh and restored the young Shah to full power. Though he had previously ruled as a constitutional monarch, the Shah emerged from the coup with near-absolute authority and a growing sense of indebtedness to the West. In the process, Iran's oil industry was quietly restructured under a new consortium of Western firms. Iran was granted a greater revenue share than before, but control remained firmly in the hands of foreign corporations.

For Washington and London, the outcome preserved access to a critical oil supply.  And we're not talking about a trivial amount of oil. As it turned out, Iran was sitting on one of the largest supplies of oil on the planet. Fast forward to the present, and Iran has proven to be sitting on the world's third-largest supply of oil, behind only Saudi Arabia and Venezuela.

Why are you reading a history lesson on CelebrityNetWorth.com? Because guess what happens when you install a 33-year-old nepo baby as the supreme leader of a country that generates an obscene amount of money off natural resources…

Gushing Cash Machine

After the coup, Mohammad Reza Pahlavi didn't waste time easing into power. He was just 33 years old, inexperienced, and beholden to the foreign powers that had just handed him the throne. But he quickly discovered something intoxicating: Iran's oil wasn't just a geopolitical bargaining chip—it was a cash machine. And he had the keys.

Throughout the 1950s and 60s, Iran's oil revenues surged. Thanks to the newly installed consortium of Western oil companies—mostly American and British—pumping crude from Iranian soil, the national treasury was flush. The Shah made sure a portion of that money was funneled directly to the royal court. In some cases, very directly. In 1962, the National Iranian Oil Company paid $12 million in a single month to an account controlled personally by the Shah. That's the equivalent of $117 million today—and that was just one month.

And that was just what we know about.

Western diplomats and economists stationed in Tehran started to notice strange accounting gaps. For years, billions of dollars in oil revenue went unaccounted for by Iran's central bank. Some believed the missing money was being diverted into royal accounts overseas—particularly in Switzerland—through shadowy intermediaries or through the Shah's opaque financial vehicle: the Pahlavi Foundation.

What the Shah built over the next two decades wasn't just a monarchy. It was a private holding company disguised as a country.

The Pahlavi Foundation: "Charity" With a Billion-Dollar Portfolio

On paper, the Pahlavi Foundation was a charitable organization dedicated to funding schools, museums, hospitals, and civic development across Iran. In reality, it functioned more like the Shah's personal holding company. The Foundation had its hands in nearly every corner of Iran's economy—and not in a passive way. It owned stakes, sometimes controlling stakes, in hundreds of companies.

By the late 1970s, an internal accounting from revolutionary dissidents claimed the Foundation—and by extension, the royal family—had ownership in more than 200 Iranian businesses, including:

• 17 banks, including Bank Omran, one of the largest in Iran
• 80% of Iran's largest insurance company
• 25 metal manufacturing firms
• 8 major mining operations
• 25% of Iran's largest cement producer
• 45 construction companies
• 43 food production and agricultural businesses
• And an estimated 70% of all hotel rooms in Iran, thanks to near-total ownership of the country's luxury hotels

It didn't stop at the border. The Shah reportedly held 10% of General Motors Iran, a 25% stake in a German steel firm called Knipp, real estate in Paris, London, and Manhattan, and significant shares in Daimler-Benz, which at one point developed a custom G-Wagen military vehicle to his specs.

That kind of arrogance didn't go unnoticed. Especially not when the rest of the country was struggling with inflation, inequality, and growing unrest.

The Shah and wife, Farah in 1975 (Photo by James Andanson/Sygma via Getty Images)

Palaces, Jets, Jewels… and a Parking Lot Full of Ferraris

With billions pouring in and no one to stop him, the Shah lived like a real-life emperor. His palaces weren't just symbols of royalty—they were logistical operations. He and his family maintained residences across the country: the Niavaran Palace in northern Tehran, the Sa'dabad Complex nestled in the Alborz Mountains, and a string of lavish retreats along the Caspian Sea. Each palace was filled with priceless artwork, French furniture, silk carpets, and hand-carved marble.

Then there were the cars.

The Shah owned one of the most insane personal automobile collections on Earth. More than 140 rare and exotic vehicles, including:

• Custom-built Rolls-Royces, Bentleys, and Ferraris
• A bespoke Mercedes-Benz 600 Landaulet, a model so rare it was favored only by popes and dictators
• One-off concept cars from Lamborghini, Porsche, and Cadillac
• And perhaps most famously, a custom Mercedes G-Wagen—the prototype for what would become the civilian G-Class SUV, built at his personal request

He had his own fleet of private aircraft, including a fully customized Boeing 727 nicknamed "Shahbaz" that he often piloted himself.

His wife, Empress Farah, matched him in extravagance. She wore one-of-a-kind haute couture from Dior, Givenchy, and Yves Saint Laurent, and draped herself in pieces from the Iranian Crown Jewels, one of the most valuable state-owned jewelry collections in the world. For her 1967 coronation as Empress, Van Cleef & Arpels designed a custom emerald-and-diamond crown using stones pulled directly from Iran's vaults. The Shah's own crown contained more than 3,000 diamonds.

The Most Expensive Party In History

But the most infamous display of excess came in 1971, when the Shah threw what is widely considered the most expensive party in modern history.

To celebrate 2,500 years of Persian monarchy, the Shah commissioned a tent city in the ruins of Persepolis, outfitted with silk-draped pavilions, air conditioning, a kitchen flown in from Maxim's of Paris, and 600 guests that included kings, presidents, and royalty from around the world. The price tag? Estimated at $300 million, as much as $2 billion today. All for three days of champagne toasts, peacock sculptures, and firework displays in the desert.

The Fortune That Helped Trigger a Revolution

While the Shah wined and dined foreign dignitaries under Persian stars, his people were losing patience.

By the late 1970s, Iran's economy was overheating. Inflation was out of control. Unemployment was high. The income gap between rich and poor had become a canyon. And the Shah's wealth—his private jets, his diamond-studded crowns, his Swiss bank accounts—had become the ultimate symbol of everything that was wrong.

When protests erupted in 1978, they weren't just about politics. They were about money. About power. About dignity. Demonstrators chanted about stolen billions. Religious leaders like Ayatollah Khomeini accused the Shah of being a corrupt puppet of the West. Even former allies turned against him.

In January 1979, after months of mounting unrest, Mohammad Reza Pahlavi fled Iran. He left behind his palaces, his collection, his empire. Just one year later, he died in exile in Egypt at the age of 60.

And it wasn't just the Shah who fled. Hundreds of members of his extended family and thousands of elite Iranian citizens departed for friendly places like Paris and Beverly Hills, bringing with them tens of billions of dollars worth of wealth and assets. It's estimated that members of the Shah's family alone left with around $4 billion.

And What Replaced It?

After the monarchy fell, the Islamic Republic promised to dismantle the Shah's empire and return Iran's wealth to the people. His assets were seized. His foundation was disbanded. The royal insignia was stripped from public buildings.

But within a few years, a new empire emerged.

In 1989, the Supreme Leader Ali Khamenei took control of an entity called Setad, which had originally been formed to manage confiscated royal property. Under Khamenei, Setad expanded into banking, real estate, agriculture, telecom, and pharmaceuticals. Today, Setad is estimated to control $200 billion in assets, a shadow economy more powerful and opaque than anything the Shah had ever built.

Legacy of a Billionaire King

Mohammad Reza Pahlavi died in exile in 1980, his fortune scattered across banks, trust accounts, and disputed properties. His supporters argue he used Iran's oil wealth to modernize the country, build its infrastructure, and position it as a regional power. His critics view his fortune as a personal betrayal of a nation's resources.