NATIONAL INTELLIGENCE DAILY THURSDAY 24 APRIL 1980

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005148740
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 25
• Document Creation Date: June 23, 2015
• Document Release Date: February 1, 2010
• Case Number: F-2007-00460
• Publication Date: April 24, 1980

Director of
Central
Intelligence
APPROVED FOR RELEASE^
DATE: 01-20-2010
CO NID 80-097JX
24 Apri 1980
 Contents
Situation Report
Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Briefs and Comments
West Germany: Indian Ocean Deployment . . . . . . . . . . 4
India: Trouble in Assam . . . . . . . . . . . . . . . . . 5
USSR-Afghanistan: Vertical-Takeoff Aircraft . . . . . . . 6
Nicaragua: Political Opposition . . . . . . . . . . . . . 7
Brazil: Metalworkers' Strike . . . . . . . . . . . . . . . 8
USSR - East Germany: Reduction of Soviet Forces . . . . . 9
USSR: Energy Production . . . . . . . . . . . . . . . . . 9
Romania: Boycott of Communist Meeting . . . . . . . . . . 10
South Korea: Constitutional Review Process. . . . . . . . 11
Greece: Presidential Balloting . . . . . . . . . . . . . . 12
Uganda : Unrest Continues . . . . . . . . . . . . . . . . . 12
Special Analysis
International: Impact of an Iranian Oil Cutoff. . . . . . 13
24 April 1980
 The attack on the Left is the Latest indication that the anti-
Communist Shia clergy remains the dominant force in the revolution.
The offensive against the left's activities in the
universities was started by hardline clerics led by the
Islamic Republic Party and its allies. The clerics took
advantage of Ayatollah Khomeini's repeated urgings to
purge the universities of Communist influences.
The clergy is well aware that President Bani-Sadr
and other moderates are too weak to challenge its power,
and believes the left is the most serious long-term
threat to its position. By moving against the left now--
while it is still organizing and gaining adherents--Jhe
clerics probably hope to prevent a future challenge.
While the clergy can mobilize its street supporters
to intimidate the left from time to time, both the
clerics and the regime lack the security forces necessary
to consolidate their hold on power and prevent the left
from reorganizing. As a result, chaos and confusion in
Iran are certain to continue.
Despite their anti-Communist views, the clerics
probably are willing to cooperate with the USSR to cope
with US sanctions. They seem willing to tolerate for
now the activities of the pro-Soviet Tudeh Party because
it backs Khomeini's line; they probably also believe that
the Tudeh is less of a threat than independent Marxists
like the Fedayeen, who have no ties to Moscow.
The informal agreement this week by EC representa-
tives not to buy Iranian oil at current prices and Iran's
 halt of crude oil sales to Japanese companies because
of Tokyo's similar refusal affect sales of more than
1 million barrels of oil per day--nearly two-thirds of
Iran's total oil exports. Contracts with Third World
countries, East European nations, and non-EC West Euro-
pean countries account for the remaining 600,000 barrels
per day.
Iran claims that Romania has agreed to purchase an
additional 40,000 barrels per day, but Tehran probably
will not be able to sell a large share of the EC and
Japanese oil to other purchasers without a major price
concession. Iran now needs to produce only 1.4 million
barrels per day or less--compared to an average of 2.4
million barrels per day for the first quarter of 1980--to
fulfill its remaining export commitments and domestic
refining requirements.
The announcement by Tehran and Aden yesterday that
they will establish full diplomatic relations is the
latest evidence of Tehran's policy to improve ties with
the radical Arab states. The Shah had broken ties with
South Yemen when Iranian troops were sent to Oman in
the early 1970s to fight the South Yemeni - supported
Dhofar rebellion. (U)
Iran-Japan
Japanese Prime Minister Ohira said today that during
his visit to Washington next week he will ask the US not
to take military action against Iran. Ohira also
announced new measures against Iran that include a re-
duction of the Japanese Embassy staff in Tehran, restric-
tions on visas to Japan for Iranians, and steps to
restrain contracts for new exports to Iran. (U)
24 pri
 i rgorcn Yemen
Sudan Yemzn
Diego Garcia
(U.K.)
Port calls scheduled by
West German task group
0 1000
Mauritius
+- Reunion (fr.)
representation]
Kilometers Names and boundary
are not necessarily authoritative.
626988 4-80
 WEST GERMANY: Indian Ocean Deployment
A West German naval task force is scheduled to get under way
for the _Tndia.n next week, despite protests from Moscow and
The task force, comprising two guided-missile
destroyers and two support ships, is to enter the Indian
Ocean on 26 May for two months. It plans to make port
calls in Pakistan, India, Sri Lanka, and Kenya and to
visit Western bases at Diego Garcia and Reunion. The
German group is authorized to take part in exercises
with US, British, and French forces--l0 French and five
British combatants are scheduled to be in the Indian
Ocean by June. Bonn, however, has stated publicly that
no joint exercises are to be conducted.
Bonn has billed the cruise as a training mission
planned before the Soviet invasion of Afghanistan, but
it has drawn fire from the Soviet and Iranian press.
Soviet complaints in February led Bonn to reconsider,
but the deployment was reaffirmed.
The cruise gives Chancellor Schmidt a risk-free way
to respond to US calls for more attention to Western
security interests outside the NATO area and to support
US objectives in the Middle East. If Schmidt were to
cancel or postpone the cruise, it could give the opposi-
tion another election issue in the defense area, where he
already is under strong attack.
Recent Iranian protests linking the cruise to a
possible US blockade have caused further controversy in
West Germany about contributing to military tension in a
volatile area. In the face of the continuing criticism,
Bonn has restated its disclaimer on joint exercises and
has added that the task force will not go near the Persian
Gulf.
24 April 1980
 ACC D;VE
11~.
Refineries dependent on Assam crude oil
L.'
THIMPHU
? hutza
r
ti `iBA "l
Names and boundary representation
Kilometers are not necessarily authoritative.
 Continued political agitation in the province of Assam is
causing acute shortages of petroleum in eastern India and is com-
ooundina Prime Minister Gandhi's already serious economic problems.
The student-led unrest arises from fear among the
indigenous Assamese that illegal immigrants from
Bangladesh and Nepal will dominate the state economically
and culturally. The students are demanding the deporta-
tion of some 3 to 5 million illegal residents who have
settled in Assam since 1951 and have set 10 May as a
deadline for New Delhi to meet their terms. In defiance
of the ban on demonstrations, the students will picket
government offices through Saturday.
Assam produces a third of India's crude oil and
since last December pickets have disrupted the flow of
oil to four Indian refineries that produce most of the
refined products for the northeast. As a result, India
has been forced to increase imports of refined products
to meet its needs at an extra cost of $4 million a day.
The states of Bihar and West Bengal, which include
the large industrial area around Calcutta, have been hit
the hardest. Diesel oil to run irrigation pumps and
kerosene for household use are also in short supply.
Several fertilizer plants, which depend on the natural
gas from the Assam oilfield or naptha from the affected
refineries, have been shut down.
Gandhi, who has exercised considerable restraint in
recent days, still claims that a political solution to
the Assamese demands is possible. Her firm steps to
regain government control over the oil installations
have been well received since there is not much sympathy
in the rest of India for the Assamese movement. She also
stands to benefit from the growing backlash against the
hardships caused by oil disruptions.
24 April 1980
 The YAK-38 has a maximum combat radius of less than
200 kilometers with 1,000 kilograms of bombs. It is in
service with Soviet Naval Aviation on the two Kiev-class
aircraft carriers.
The appearance of the YAK-38 in Afghanistan suggests
that the Soviets intend to evaluate it in a close air
support role. They may fly the aircraft from unimproved
strips near their ground forces--much as the Royal Air
Force and US Marines plan to employ their VTOL Harriers.
If the YAK-38 is successful in Afghanistan, the
Soviets may deploy it with tactical aviation and possibly
curtail production of the SU-25, a close air support
fighter
Although the SU-25 has more than twice the
combat radius of the YAK-38, it lacks a VTOL capability.
Because it would generally stage farther from the battle
area, the SU-25 would not be as flexible or able to sup-
port troops as quickly as the YAK-38.
Both aircraft are subsonic and are limited to fair
weather operations in daylight.
24 April 1980
 NICARAGUA: Political Opposition
The Sandinistas are facing the strongest opposition since they
took power, and reaching a compromise with their critics will be
difficult.
The National Democratic Movement led by Alfonso
Robelo--who resigned from the junta this week in protest
against Sandinista efforts to pack the quasi-legislative
Council of State--and the leading business association
are pressing the Sandinistas for broad political con-
cessions. Robelo's party is seeking to unify independent
political groups, encourage more resignations, and at-
tract large turnouts at rallies' scheduled for next week.
In a related move, the influential Chamorro family yes-
terday closed the major independent newspaper. La Prensa,
charging government intimidation.
Although the business community has ruled out a
general strike for the time being, leaders in the private
sector are promoting a boycott of the Council and have
appealed to Church authorities for support. Opponents
of the regime are counting on strong international pres-
sure from Western nations to persuade the Sandinistas to
yield.
The government is attempting to improve its inter-
national position by playing down Robelo's departure and
by hinting at flexibility. Sandinista national direc-
torate member Wheelock's overture to the US Ambassador--
indicating Sandinista readiness to hold a dialogue with
the private sector--appears to be part of this strategy.
Both sides apparently prefer to avoid a showdown.
The Sandinistas' flexibility, however, may be taxed by
private sector demands, including restoration of the
Council's original composition, Robelo's return to the
junta, restitution of illegally confiscated lands, and
the removal of the Justice Minister. The Sandinistas'
efforts to increase their domination of the Council of
State underscores the weakness of their commitment to
pluralism.
24 April 1980
 The Brazilian metalworkers' strike, now in its fourth week, is
raising doubts about the regime's new wage policy and is heightening
military concern over political liberalization.
The strike generally has been confined to the indus-
trial suburbs of Sao Paulo and has involved less than
half of the area's metalworkers. Following unsuccessful
mediation efforts and a regional labor court ruling that
the strike is illegal, Brasilia removed key union leaders
from their posts and arrested them.
The regime had hoped that the wage policy instituted
last November would placate labor and reduce union incen-
tives to strike. Fixed wage increases have been well
received, but the unexpectedly large hikes won by some
unions for productivity increases have adversely affected
the government's anti-inflation program and increased the
expectations of other workers.
Military critics of liberalization believe the
government should adopt a tougher stance toward labor
unrest, take firmer measures to control inflation, and
slow the liberalization process. Economic hardships--
particularly among younger officers--are creating greater
apprehension within the armed forces.
24 April 1980
 Denmark
V NZ
West
Germany 4
HaIIe
27th Guards
Motorized Rifle Division
L
100
J
Baltic Sea
C z e c h o s 1 o v a k_~L~
Boundary representation is
not necessarily authoritative.
 Elements of a second Soviet division in East Germany
have been withdrawn as part of the continuing unilateral
reduction of forces announced by President Brezhnev in
October. Most--if not all--of the 6th Guards Tank
Division headquartered at Wittenberg has been withdrawn,
and the initial elements of an additional division, the
27th Guards Motorized Rifle Division at Halle, were
withdrawn recently. Complete withdrawal of both divisions
could be accomplished by the end of May and would fulfill
Brezhnev's pledge of a 20,000-man reduction. It also
would go halfwav toward meeting his promise to withdraw
1,000 tanks.
USSR: Energy Production
The energy situation in the USSR continued to de-
teriorate in the first quarter of this year, despite
rapid growth in gas output. Oil production averaged
about 11.9 million barrels per day, down from a high of
nearly 12 million barrels per day in December. As a
result, oil output would have to average about 12.2 mil-
lion barrels per day the rest of the year to meet the
announced goal of 12.1 million barrels per day. For
1980, it is highly unlikely that the goal will be met.
Coal production is likely to lag 20 million tons below
this year's target of 745 million tons because of de-
teriorating mining conditions and an inadequate labor
supply. Gas production for the quarter posted an impres-
sive 8-percent growth over last year's level to reach
109 billion cubic meters; output should reach this year's
target of 435 billion cubic meters.
Trap Seeretr-
9
24 April 1980
 ROMANIA: Boycott of Communist Meeting
Romania's decision yesterday to join the Yugoslavs
and several West European Communist parties in boycotting
the Soviet-initiated conference of European Communist
parties next week in Paris reflects concern that Moscow
will use it to force an endorsement of its invasion of
Afghanistan and compliance with the Soviet line on other
divisive issues. The Romanians complained that prepara-
tions for the meeting on "problems of peace and disarma-
ment" have been inadequate to assure a consensus on the
meeting's objectives. Bucharest insisted that the meet-
ing either be postponed or reconstituted as a forum for
an exchange of views preparatory to a general conference,
whose agenda would be determined by "common agreement."
The decision will not sit well with the Soviets, who are
already unhappy with Bucharest's refusal to endorse their
move into Afghanistan.
10
Aprii 196U
 Prime Minister Shin Hyon Hwack's refusal on Tuesday
to testify before the National Assembly's Constitutional
Review Committee on the government's policy and timetable
for transfer of power has hardened demands by both the
conservative and the opposition parties that the govern-
ment set a firm timetable for a constitutional referendum.
11
24 April 1980
 GREECE: Presidential Balloting
Prime Minister Karamanlis yesterday received only
179 votes in the first round of the election in parlia-
ment for president--well short of the two-thirds majority
of 200 votes required in the first two ballots.
Karamanlis has no serious competition, but the opposi-
tion Socialists and most Communists--who together control
over 100 seats--are not supporting any candidate. This
is likely to continue through the second round of ballot-
ing on Tuesday. Karamanlis probably will win in the
third round, where only 180 votes are needed, but his
margin of victory may be razor thin. An inconclusive
third ballot would lead to a parliamentary election that
public opinion polls suggest Karamanlis' New Democracy
Party would win.
UGANDA: Unrest Continues
Former Ugandan President Obote's planned return from
exile in Tanzania, possibly as early as next week, is
likely to increase tension in Kampala. Obote, who held
office from 1962 until 1971, intends to run for President
in elections tentatively scheduled for December. Recent
politically motivated violence has added to the concern
among many southern Ugandans that Obote's northern fol-
lowers will use force to gain power.
Ill-disciplined Ugandan troops--who have replaced
departing Tanzanian security forces--and Tanzanian de-
serters are contributing to the general lack of security
in Kampala. President Binaisa hopes that as a result of
the recent East African summit, Kenya and Sudan will play
a major role in improving Uganda's security situation;
12 1 24 April 1980
 Primary Oil Stocks1
I I 13 I I 13
1978 1979 1980 1978 1979 1980
I I 13
1978 1979 1980
1 At end of period.
2Japanese stocks include government-owned strategic stockpiles
estimated at about 33 million barrels since fourth-quarter 1977.
3Estimated.
4US stocks include Strategic Petroleum Reserves (SPR) of
approximately 91.7 million barrels.
 INTERNATIONAL: Impact of an Iranian Oil Cutoff
Current production levels indicate that the world oil market
now has sufficient slack to absorb a complete Iranian oil cutoff
without setting off another major round of price hikes. The market,
however, is not immune to the Loss of Iranian oil. The psychoZog-
ical impact of a cutoff, the prospect that other exporters might
take a tougher price stance, and the uneven impact on consuming
countries could cause price pressures even in the short run. Sub-
stantial problems could emerge if other OPEC members should make
production cuts, either to express solidarity with Iran or as a
result of military action in the Persian Gulf.
We estimate that Free World oil supplies have been
outpacing consumption by at least 1.5 million barrels
per day--roughly equal to the amount coming from Iran.
As a result, primary stocks now approximate 4 billion
barrels, which is well above normal.
This inventory provides the market with enough of a
cushion to offset the loss of Iranian supplies for sev-
eral months. The cushion may prove even more substantial
because Free World consumption of oil probably will fall
further as the US recession and delayed effects of last
year's price hikes take hold. These factors, plus the
anticipated economic slowdown in Western Europe and
Japan, have led us to lower our projections of Free
World oil consumption by 500,000 barrels per day.
Production Outlook
Getting through the year without Iranian supplies
and without substantial price increases would require
that Saudi Arabia and other countries in OPEC refrain
from making any additional cuts in production. We judge
that the Saudis probably would postpone their planned
1 million barrel-per-day cut if necessary to avoid seri-
ous market disruptions. If they reduced production to
the 8.5 million level before an Iranian cutoff, it would
take several months to bring output back to the present
level.
13
24 April 1980
 Depending on the cause of an Iranian cutoff, other
producers in OPEC also might be willing to postpone pro-
duction cuts to prevent market disruptions. Iraq might
be willing to cooperate on oil matters by maintaining
output at current levels or even by increasing produc-
tion slightly. Venezuela also might be willing to re-
store part of its recent cuts, especially if prices are
rising.
Kuwait probably would maintain production levels but
would resist reversing its recent cutback decision.
Furthermore, Kuwait feels vulnerable to retaliation by
a large Shia presence--over 20 percent of the population.
In the face of a blockade or the mining of Iranian
harbors, we believe Libya would at a minimum halt ex-
ports to the US and might even reduce production. There
also would be a danger that Algeria might join in halt-
ing exports to the US. With Iranian exports completely
halted, the market would have no room to absorb addi-
tional supply cuts without substantial price pressures
developing.
Individual importing countries generally are in a
good position to offset Iranian oil supply reductions.
Among the major. industrial countries, Japan and
Germany are potentially the most vulnerable.
Japan could meet its requirements for crude through
the middle of the year on the strength of stock draw-
downs. Japanese oil firms, however, will be reluctant
to reduce inventories very quickly. As was the case
last year when Iranian deliveries were cut back, they
will be inclined to combine moderate stock drawdowns
with increased spot market buying and to pass higher
crude oil costs on to consumers.
West German Government officials and oil company
representatives believe a cutoff could be handled without
too much trouble. Oil inventories are approximately
14
24 pri
 10 million barrels higher than at the same time last
year. West German confidence in doing without Iranian
supplies also has been bolstered by a sharp decline in
oil consumption early this year.
Declining oil consumption and high inventories
should ensure that France would weather the loss of Ira-
nian supplies with few problems. Higher prices and an
enhanced conservation effort helped reduce oil sales
early this year by 16 percent below levels of a year
earlier.
Italy, with only minor Iranian imports and a solid
inventory position, has little to lose from a supply
cutoff. The UK also is a modest consumer of Iranian
oil.
Other European countries that rely heavily on Ira-
nian supplies include Portugal, Norway, Ireland, Spain,
Finland, Belgium, Luxembourg, and Sweden. Portugal and
Norway should have little trouble meeting their own oil
needs in the near term, but the others would suffer from
a cutoff of Iranian supplies and the resultant increased
competition for oil generally.
15
24 April 1980
 Top Seer-et