MIDDLE EAST AFRICA SOUTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A000900180002-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: June 1, 2001
• Sequence Number: 2
• Publication Date: May 8, 1975
• Content Type: NOTES

Approved For Release 2001/08/08 : CIA-RDP79T00865A0009001MA~-3Secret
No Foreign Dissem
9VITT H
Middle East
Africa
South Asia
Top Secret
Handle via COMINT Channels 129
SC No. 04376/75
May 8, 1975
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Ego
 No Foreign Dissem
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Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 005827
Exempt from general declassification schedule
of E. 0. 11652, exemption category:
? 5B (1), (2), and (3)
Automatically declassified
on: Date Impossible to Determine
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This publication is prepared for regional specialists in the Washington com-
munity by the Middle East - Africa Division. Office of Current Intelligence,
with occasional contributions from other offices within. the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
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Saudi Arabia: Oil Production Cut Again . . . . 2
Pakistan: Security Situation Improved
in Frontier Provinces . . . . . . . . . . . . 6
May 8, 1975
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TJP SECRET UMBRA
Israel-EC
PS
The EC and Israel expect to sign a free trade
agreement this weekend that will enter into force on
July 1.
It will be the first accord to be signed as part
of the EC's so-called Mediterranean policy. The agreement
provides for the gradual establishment of-an industrial
free trade area, a reduction in agricultural tariffs and
increased technical, scientific, and industrial coopera-
tion. It also allows Israel to apply for financial
assistance once similar arrangements are negotiated between
the EC and Egypt, Syria, Lebanon and Jordan.
Italy continues to object to easing EC tariffs on
agricultural products that compete with Italy's. As a
result, agricultural provisions of the accord will not
come into effect until Rome's problems can-be-resolved,
in part probably through higher community farm subsidies
for Italy. This also means that the,-farm,.-section of the
agreement with Israel will not be activitated until the
negotiations with the Maghreb states, stalled over the
same issue, are concluded.
Nevertheless, for Israel, the agreement with the
EC could not come at-a better time. The-government,
in addition to expecting substantial economic benefits
to flow from the association, is pleased with-the implied
broadening of its international political position as
it braces to resist pressures from the Arabs, the US,
and some Europeans for a modification of its stand on
Middle East settlement issues. (CONFIDENTIAL NO
FOREIGN DISSEM)
May 8, 1975
TOP SECRET UMBRA
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TOP SECRET U;iBiA
Saudi Arabia
oil Production Cut Again
Saudi Arabia allowed a further deep cut in its
toil output last month; production fell below 6 million
barrels a day, a decline of more than 3 million
barrels a day since last October. This is the clear-
I est indication to date that the new leadership plans
Ito continue the late King Faysal's policy of strong
support for the Organization of Petroleum Exporting
(Countries.
The Saudi cut helped make it possible for other
OPEC states to increase their liftings. Abu Dhabi
and Libya have been pressing the oil companies to
increase production and have reduced their quality
and transportation price differentials in an effort
to boost sales.
In response to these measures, production in
;these two countries has risen by a total of about
700,000 barrels a day since February. If other OPEC
!states succeed in getting the companies to increase
=their production in this period of slack oil demand,
.the Saudis will be under pressure to cut even further.
They could reduce production to as little as 4 million
barrels a day and still meet their foreign exchange
requirements from current revenues.
Cuts have also been made in other OPEC countries.
Indonesia's production in March was 100,000 barrels
a day lower than February. The companies attribute
the drop to Indonesia's insistence on charging $12.60
a barrel for crude oil. Comparable Chinese crude is
selling for about $12.10.
Nigeria's production fell in April for the sixth
1consecutive month and is now down 800,000 barrels a
day from last October. Most of the latest cuts stem
from a refusal by the companies to continue lifting
government oil that Lagos has been unable to sell.
.The government proposal in mid-April to reduce some
;,prices was too little or too late to prevent further
7cuts.
(Continued)
May 8, 1975
TOP SECRET UABRA
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TOP SECRET UMBRA
Even if OPEC production remains at the current
level, the excessive oil inventories that have been
putting downward pressure on oil prices could be
dissipated by late summer. By September, when the
OPEC price freeze is scheduled to expire, reduced
inventories and prospects of a seasonal increase
in demand for crude may allow OPEC to raise prices
without sacrificing production. (CONFIDENTIAL)
May 8, 1975
TOP SECRET Ui"1BA
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aecurity Situation Improved in Frontier Provinces
Prime Minister Bhutto's government continues to
make progress in consolidating its control in Pakistan's
politically sensitive western border provinces.
Last week Bhutto installed a new provincial gov-
ernment in the North-West Frontier Province, ending
the direct rule by the central government he had im-
posed there last February following the assassination
of his chief political lieutenant in the province.
Bhutto apparently was able to lift direct federal rule
because the level of violence in the province has not
increased significantly since February. Many observers
had expected an upsurge of unrest following Bhutto's
suppression of the leading opposition party; Bhutto
claims the party was behind the assassination.
A number of the government's more militant opponents
in the province managed to avoid arrest in February and
could cause trouble in the future. Some of them reported-
ly are receiving guerrilla training in neighboring Afghanis-
tan, which supports their efforts to attain self-determination
for the frontier region. Pakistan's army, however, is prob-
Eably capable of containing these dissidents.
Baluchistan, Pakistan's other troublesome western
border province, has been generally quiet since last fall.
A sizeable army presence, together with political maneuvering
by Bhutto's supporters and heavy new government spending on
!economic development, has helped to keep the lid on. Por-
tions of the province had been disrupted in 1973 and 1974 by
an insurrection on the part of tribesmen opposed to central
government control. (SECRET/NFD)
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