The issue of the northern Iran oil concession between 1920 -1925 represents one of the most critical manifestations of the interplay between Iran’s domestic politics and foreign power rivalry during the late Qajar period. Drawing upon the Foreign Relations of the United States (FRUS) documents and employing an analytical approach based on the theory of neopatrimonialism, this study examines why the Iranian government sought to grant the northern oil concession to American companies and analyzes the causes behind the failure of this endeavor. Data collection was conducted through archival and library research, prioritizing documents directly related to the northern oil concession. The primary research question is why, despite the inclination of certain Iranian political elites to secure U.S. participation in exploiting northern oil resources, this policy ultimately proved unsuccessful. The research findings indicate that rather than being grounded in a coherent economic strategy, this effort was pursued within the framework of a balancing policy against British and Russian (Soviet) influence, with the hope that the United States would act as a “Third Force.” However, the institutional weakness of the state apparatus within Iran’s neopatrimonial power structure, combined with geopolitical constraints and U.S. foreign policy considerations, ultimately led to the failure of this initiative.