NATIONAL INTELLIGENCE DAILY THURSDAY 7 JANUARY 1982

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005065437
• Release Decision: IPPUB U
• Document Page Count: 14
• Document Creation Date: June 23, 2015
• Document Release Date: September 9, 2010
• Case Number: F-2007-00446
• Publication Date: January 7, 1982

 r
Poland: Soviet and Vatican Influences . . . . . . . . . .
oZ Jordan - Saudi Arabia: King Hussein's Visit . . . . . . .
->
Y Sudan: Demonstrations Continue . . . . . . . . . . . . . 2
$' USSR-Czechoslovakia-Hungary: Combined Exercise . . . . . 3
I Spain: King's Concern About the Military . . . . . . . . 4
Special Analysis
International: Oil Market Outlook . . . . . . . . . . . . 5
7 January 1982
 9'
as well as the 1.5-billion-ruble deficit from 1981.
Earlier, the Soviets had threatened to force the Poles
to balance their trade with the USSR. There was no men-
Schmidt was predictable.
Soviet and Polish leaders yesterday signed a trade protocol
that permits Poland to run a trade deficit with the USSR of 1.2
billion rubles in 1982. The Pope still is considering a trip to
Poland in August, but he and the Church have only limited influence
on the martial Zaw authorities. Moscow's initial public criticism
of the talks on Tuesday between President Reagan and Chancellor
Moscow yesterday granted Poland soft currency cred-
its to cover a 1.2-billion-ruble trade deficit this year
The Pope's Visit
Archbishop Poggi indicated
yesterday that Pope John Paul
for the Pope.
between the Pope and Archbishop Glemp.
Poland in August. His decision depends on how the popu-
lation adapts to martial law. During his visit in late
December, Poggi asked Foreign Minister Czyrek and Premier
Jaruzelski for the installation of a communications line
II is considering going ahead with his planned visit to
The Pope would like to go "home" to be with his
people to give them moral support. He also may hope that
the prospect of his visit would encourage the government
to tone down the harsher aspects of its rule. In this
regard, Poggi noted that during his trip prison conditions
improved, and he attributed this to the regime's respect
in the case of an increase in repression.
On the other hand, the Pope probably considers that
such a visit might give an aspect of legitimacy to the
martial law leaders. This factor would be decisive only
There are risks for the authorities in allowing the
visit, and they might decide to stall. Delay, however,
would have negative repercussions on the population. The
regime is aware that many Poles mark the Pope's visit
in 1979 as the beginning of the social atmosphere that
led to the strikes and creation of Solidarity in 1980.
--continued
7 January 1982
 The government also realizes that it would not be able
to control such a visit to its own advantage.
The Church's Influence
Despite their authority, Church leaders--including
the Pope--have only a limited ability to affect policy
decisions by the martial law regime. This is partly due
to the Church's aversion to interfering in clearly politi-
cal matters. Moreover, some government leaders accuse
the Church of having been too pro-Solidarity and point
out that some of union leader Walesa's advisers were
closely associated with it.
Z The government is also well aware of--and it is
3 exploiting--the fact that the Church will not encourage
active opposition to martial law because of its basic
interest in preventing bloodshed and a Soviet invasion.
In contradiction to government reports, a Church
official yesterday scoffed at the idea that the Church
and regime are currently conducting a dialogue. The
churchman told that the Church is not
considering giving sanctuary to Walesa. The source left
with the impression that the Church is
preparing for a long contest with the martial law authori-
ties.
The regime already has demonstrated that it is watch-
ing Church activities closely and is willing to use pres-
sure to gain conformity.
the secret police have warned priests not to go too
far in their sermons. The authorities also prevented a
prison priest from visiting detainees after Archbishop
Glemp had paid an unexpected visit to the prison.
Soviet Commentary
Although Moscow criticized the talks between Presi-
dent Reagan and Chancellor Schmidt, it was less critical
of Schmidt than of Reagan. TASS attacked both leaders
for attempting to "dictate to the Polish leadership"
but noted that Schmidt "kept his own opinion" of the
--continued
Top Seeret
7 January 1982
 inefficacy of sanctions against the USSR. The commentary
significantly failed to mention Schmidt's public agreement
with the US position that the Soviets ultimately bear
responsibility for events in Poland.
An economic newspaper published an article yesterday
that accuses the US of systematically manipulating its
food aid to interfere in Poland's internal affairs.
3 It alleges "unparalleled duplicity and hypocrisy" on the
part of the US in using blockades, sanctions, and other
forms of interference throughout the period following
World War II. It fails, however, to mention the 1980
grain embargo against the USSR. Moreover, there is no
reference to Moscow's own food aid policy, possibly
reflecting domestic unpopularity of food aid to Poland.
7 January 1982
 JORDAN - SAUDI ARABIA: King Hussein's Visit
King Hussein's discussions with Saudi leaders today probably
will focus on ways to shore up Iraqi President Saddam Hussein's
deteriorating position and improve security in the Persian Gulf
Both the Jordanians and the Saudis are becoming in-
creasingly concerned about Iraq's weakening position.
The Saudis in particular fear that Iran will emerge from
the war as the dominant power in the region and a greater
Hussein probably hopes to capitalize on Saudi con-
/ cerns to promote closer political and security cooperation,
and
et additi
l
i
g
ona
Saud
aid. The King believes that he
summit in Morocco.
already has earned some credit with the Saudis by support-
ing Crown Prince Fahd's peace plan at the recent Arab
ship with Baghdad. Hussein would be extremely reluctant,
The Jordanians have backed Iraq since the beginning
of the war and have developed a close military relation-
Syria.
7 January 1982
 Student demonstrations over increases in the price
of sugar and tea continued yesterday in Khartoum for the
fourth straight day. For the first time, some of the
protests took on an anti-American aspect, although
there was no damage to US property. Sudanese security
officials are concerned that the demonstrations may
become more violent during the celebration today of the
Prophet's birthday, and the Army has been alerted to
support the police if necessary.
2
7 January 1982
 USSR-CZECHOSLOVAKIA-HUNGARY: Combined Exercise
1,3
and will take place in northwestern Czechoslovakia
Hungarian exercise--Druzhba 82--will be held at the end
of this month. The exercise will involve 25,000 troops
3
7 January 1982
 SPAIN: King's Concern About the Military
King Juan Carlos, in a bid to head off further
public expressions of military unrest, yesterday urged
the armed forces to respect democracy and maintain
discipline. He also sympathized with the difficulties
the military faces and thanked officers for their past
Although the
speech will reinforce the Ring's position as commander
in chief, it is unlikely to reduce the simmering discon-
tent in military ranks.
4
7 January 1982
 by
Weak demand for oil and surplus production capacity in OPEC
countries probably will cause a further drop in real prices in 1982
and possibly into 1983. The extent of market softness will depend
largely on oil consumption trends and the ZeveZ of exports from Iran
and Iraq.
A fairly rapid economic recovery in the industrial-
ized countries, combined with continued conservation and
fuel-switching induced by high oil prices, is likely to
keep demand for OPEC oil at about the same level as last
year--roughly 23.5 million barrels per day.
Oil consumption in non-Communist countries will fall
slightly this year to about 46 million barrels per day.
An end to the inventory reductions by importing countries,
on the other hand, will raise demand for OPEC oil by
1 million to 2 million barrels per day.
If demand remains at about 23.5 million barrels per
day, the OPEC benchmark price of $34 per barrel probably
can be maintained. This would not preclude additional
minor price reductions by some members during early 1982.
The market, however, could get softer. If economic
growth falls below the moderate recovery now anticipated,
demand for OPEC oil could be reduced by 1 million or more
barrels per day in 1982. This would make it much more
difficult and perhaps impossible for OPEC to prevent a
decline in nominal prices.
7 January 1982
 The Saudis and other OPEC members probably will be
largely successful in defending the $34 benchmark. Oil
prices adjusted for inflation, however, will almost cer-
tainly fall substantially over the next 12 to 18 months,
and real oil prices may decline 20 to 25 percent through
1983.
The market is likely to remain stable even with a
fairly rapid economic expansion in 1983. Oil consumption
probably will increase only moderately, raising demand
for OPEC oil by only about a half million barrels per
day. Supplies should remain ample and prevent renewed
pressure for price increases, especially if output from
Iran and Iraq rises.
Possible Upward Pressures
Despite the supply cushion and prospects for a soft
V oil market, several possible developments could alter
this outlook. Events in the Middle East, for example,
could disrupt supplies. At the current rate of reduction
in inventories, surplus stocks will be depleted early this
year, leaving the market vulnerable to another disruption
in supplies or a sudden increase in demand.
The steady decline in real oil prices almost cer-
tainly will slow conservation measures and efforts to
change to other fuels, and it may delay energy-related
capital investments more than currently predicted by
market analysts. This would lead to a somewhat higher
demand for oil, with a resulting upward pressure on
prices.
6
7 January 1982