THE PRESIDENT'S DAILY BRIEF 27 OCTOBER 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993968
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: October 27, 1973

Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011800020011-3
The President's Daily Brief
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27 October 1973
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Exempt from general
declassification schedule of ED. 11652
exemption category 5fir 1)12)13)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
27 October 1973
PRINCIPAL DEVELOPMENTS
Heavy fighting took place at the southern end of the
Suez Canal yesterday, and unconfirmed press reports
this morning state that Israeli forces have occupied
almost, all of Suez city. The Syrian front remains?
relatively quiet; Iraqi forces are leaving Syria.
(Page 1)
Brezhnev delivered a ringing endorsement of detente
yesterday. He clearly was out to demonstrate that
the USSR wants good relations with the US to continue,
despite complications introduced by Soviet behavior
with respect to the war in the Middle East. (Page 3)
The EC Commission has approved a draft program for
monitoring oil movements and supplies. A common
information system will probably be established, but
further steps toward an oil-sharing program remain
unlikely. (Page 4)
Japan has been notified by the major international
oil companies that shipments will be cut substantially.
The government is already drawing up plans to restrict
consumption. (Page 5)
Libya has reportedly converted some $500 to 600 mil-
lion into sterling. Total Arab conversions in the
past three weeks remain at less than $1 billion, and
the impact on the dollar has been small. (Page 6)
Notes on the USSR, Cuba, and South Korea appear on
Page 7.
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Suez Canal Zone
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FOR THE PRESIDENT ONLY
ARAB STATES - ISRAEL
There was heavy fighting at the southern end of
the canal yesterday, but the northern end remained
calm. An Israeli spokesman reported that elements
of the Egyptian Third Army attacked yesterday after-
noon in an attempt to cross back to the west bank.
but were repulsed.
Unconfirmed press reports this morning
quoting Israeli officers state that Israeli forces
have occupied almost all of the city. Heavy fighting
was also reported at Port Tawfiq.
The mood of the Egyptian public has become more
somber, pessimistic, and confused as news of major Is-
raeli gains along the Suez Canal become known. So
far President Sadat and the army high command have
apparently escaped direct criticism, but rumors are
circulating with respect to dissatisfaction with
certain military decisions. There are also signs
that the US will be blamed increasingly for Cairo's
military reversals and for delays in implementing
the cease-fire. The editor of the influential Cairo
daily Al Ahram reported yesterday that Sadat told
him Egypt was forced to accept the October 22 cease-
fire because of direct US intervention in the fight-
ing. Sadat reportedly said that his troops were de-
feating Israel when both sides were without help,
but that he could not expect them to fight against
the US.
The Syrian front remains quiet. The Syrian for-
eign minister said yesterday that all Iraqi Air Force
units had left Syria and that Iraqi ground forces
were being withdrawn.
(continued)
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FOR THE PRESIDENT ONLY
The Soviet naval ships that gathered about 100
nautical miles north of the Egyptian coast on October
25 have dispersed. Four of these--a cruiser and
three destroyers--appear to be moving slowly to the
northeast in the direction of the Syrian coast. A
destroyer, a minesweeper, and an amphibious ship are
already located in the waters between Syria and
Cyprus. Another destroyer, a minesweeper, and an
intelligence collection ship are holding about sixty
nautical miles south of Cyprus.
In addition,
a TASS official has told US officials in Cairo that
the Soviets became aware Sadat was preparing for war
in late September, and that they knew on October 3
that Egypt was about to attack.
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FOR THE PRESIDENT ONLY
USSR - US - MIDDLE EAST
Addressing the World Congress of Peace Forces
yesterday, Brezhnev delivered a ringing endorsement
of the benefits of East-West detente and, in particu-
lar, of improved ties with the US. He repeatedly
called attention to the progress already achieved in
relations with Washington and pointed to "good pros-
pects" for further cooperation, adding that "one can-
not fail to give credit to Western statesmen" who
have begun fruitful dialogue with the USSR.
Brezhnev clearly was out to demonstrate that the
Soviet Union wants detente to continue, despite the
complications introduced by its behavior with respect
to the war in the Middle East, and tried to foster the
impression that if detente is endangered, this will
not be Moscow's fault. He went to unusual lengths to
avoid direct criticism of US actions, limiting him-
self, for example, to vague references to the "out-
side" support Israel enjoys, while roundly condemning
Israeli actions.
Announcing that the USSR has already sent "rep-
resentatives to observe fulfillment of the cease-
fire," Brezhnev expressed the hope that the US also
would do so. He charged that Tel Aviv had "perfidi-
ously violated" the cease-fire, asserted that "urgent
and vigorous" measures were needed to enforce it, and
stressed that Israel must withdraw from all territo-
ries it has occupied since 1967. Brezhnev avoided
any direct threat of unilateral Soviet action, how-
ever, merely adding that Moscow is "considering other
possible measures that the situation may require."
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FOR THE PRESIDENT ONLY
EC - OIL POLICY
The EC Commission has approved a draft program
for monitoring oil movements and supplies. The pro-
posal, which may enter into force in the next few
days, would require member states to inform the Com-
mission of all imports and exports of crude oil and
refined products, as well as stockpile levels. Al-
though the Commission probably will succeed in estab-
lishing a common information system, as it has long
wanted to do, further steps toward an oil-sharing
program remain unlikely.
The cutoff of crude oil shipments to the Nether-
lands by Kuwait, Algeria, Qatar, Iraq, Abu Dhabi,
and Oman poses a particularly serious problem, be-
cause about half of Dutch imports are normally re-
exported to other EC members. The Commission may
be attempting to forestall unilateral Dutch export
controls on other oil supplies still entering Rotter-
dam for transshipment to nearby countries. At the
same time, despite the Arabs' warning that their em-
bargo will be extended to those who re-export oil to
countries already sanctioned, the Commission is
urging Community members to support the Netherlands
and any other EC country facing a supply crisis.
Most EC countries have set up mechanisms of
their own that could restrict exports both inside
and outside the Community. In a supply crisis, they
would undoubtedly restrict exports outside the Com-
munity more severely than intra-EC exports. Conse-
quently, shipments of refined products to the US
would be sharply curtailed. Although European ship-
ments accounted for only about 1 percent of US con-
sumption last year, the loss would worsen shortages
already expected this winter.
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FOR THE PRESIDENT ONLY
JAPAN
? Tokyo has been notified by the major interna-
tional oil companies--which supply the bulk of Japan's
oil--that shipments will be cut substantially. Gulf
Oil, which supplies about 10 percent of Japanese oil
imports, has said it may have to reduce deliveries
by 35 percent for the remainder of this year.
Japanese refineries are still operating normally,
and crude and product stocks are equivalent to about
six weeks of consumption. Nonetheless, the govern-
ment is already drawing up plans to restrict consump-
tion. Rationing will be used as a last resort. At
the same time, Tokyo is pressing the major oil com-
panies to assure Japan a fair share of the reduced
supplies available to them.
Tokyo had hoped that its careful fence-strad-
dling on the Middle East conflict would be enough
to assure continuation of scheduled deliveries, de-
spite the production cutbacks. The Arabs are still
pressing Tokyo for a definitive pro-Arab stand, but
to date the Japanese have only restated their support
for the UN resolutions.
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FOR THE PRESIDENT ONLY
INTERNATIONAL HONETARY DEVELOPiENT
Libya reportedly is the Arab nation that has sold
the most dollars since the Middle East war began0
last week Libya converted
some $500 to 600 million--mostly Euro-dollars--into
sterling. Even with sales of this magnitude, remain-
ing Libyan dollar assets are estimated at about $1
billion.
On October 18, President Qadhafi exhorted his
fellow Arab leaders to sell their dollars and remove
their dollar assets from the US. Total Arab conver-
sions in the past three weeks nevertheless remain at
less than $1 billion. Estimated Saudi sales of $200
million rank second to Libya's.
The impact on the dollar has been small, probably
because of continuing trader belief that the dollar
is undervalued. Yesterday the dollar strengthened
markedly upon the announcement of an $870 million US
trade surplus in September and in reaction to a less-
ening of tensions in the Middle East.
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FOR THE PRESIDENT ONLY
NOTES
USSR - Middle East:
USSR: In his speech in Moscow yesterday, Brezh-
nev announced that this year's Soviet grain harvest
would go over 215 million metric tons--almost 18 mil-
lion more than previous Soviet estimates. On the
basis of yields reported so far, we would estimate
a total harvest of between 206 and 220 million tons.
This compares with last year's total harvest of 168
million tons and the previous record of 187 million
tons in 1970.
Cuba:
six more artil-
lery emplacements and two drive-through revetments
have been constructed near Guantanamo Naval Base in
the last two weeks. However, no weapons, support
equipment, or unusual activity were observed in the
area.
South Korea: The government released opposition
leader Kim Tae-chung from house arrest yesterday in
the hope of quickly settling with Tokyo the issue of
his abduction from Japan last August. Seoul also
hopes that Kim's release will divert domestic atten-
tion from a detained university professor's recent
death--widely rumored to have resulted from torture.
The government fears that these rumors may further
fuel student unrest that has been mounting for the
past few weeks.
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