IRAN-IRAQ WAR: OIL FACILITY VULNERABILITIES AND THE OIL MARKET

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R001403400038-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 20, 2016
• Document Release Date: April 24, 2007
• Sequence Number: 38
• Content Type: REPORT

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Iran-Iraq War: Oil Facility Vulnerabilities
and The Oil Market
The war raises serious risks to the oil market, especially if it spills
over to Kuwait, Saudi Arabia or the United Arab Emirates.
o On Sunday Tehran repeated warnings to the Persian Gulf countries
against helping Iraq in its war with Iran. These threats have not
been specifically directed against oil installations.
o In early October 1981, however, Iranian fighters attacked and
severely damaged the largest gas-oil separation plant in Kuwait in
an effort to dissuade the Kuwaitis from their strong support of
Iraq.
o Iran might again attack the oil facilities of other Persian Gulf
countries-out of frustration if the conflict with Iraq bogs down,
to retaliate for support given to Baghdad, or for a sucessful Iraqi
attack on Kharg Island, Iran's main oil export terminal.
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The oil facilities in the Persian GLlf countries are extremely vulnerable
to disruption by sabotage and naval or air attack.
o Iran and Iraq. Although there has been no new critical damage to
oil facilities as a result of the recent fighting, the continued
flow of significant quantities of oil remains dependent on the
operation of Kharg Island and the Iraq-Turkey pipeline.
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o Kuwait. By far the most critical and vulnerable Kuwaiti petroleum
choke points are the terminal loading facilities at Ahmadi; if lost
Kuwait would be unable to export any crude.
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o Saudi Arabia. The Saudi oil production and export system is
extremely vulnerable to attack because of the large number of
critical choke points. The most important of these installations
are the Ras Tanura and Ju 'aymah export terminals in the Persian
Gulf which constitute all but 2 million b/d of Saudi export
capacity. Other key targets include the processing facilities at
Abgaiq as well as coastal and offshore installations for gas-oil
separation.
o Abu Dhabi. The Jebel Dhanna oil export teminal is the only outlet
for onshore crude oil production. Onshore production currently
accounts for about 60 percent of total output. Offshore production
and processing take place at several locations, the most important
of which is Das Island. I 25X1
The Oil Market
Because world supplies are plentiful at the moment the market could
absorb the loss of both Iranian and Iraqi oil exports.-
o A spread in the conflict and damage to key oil facilities in
neighboring states, however, would tighten the market and force up
prices. Excess oil capacity outside the Persian Gulf amounts to
only 3 million b/d, compared with current Gulf production of more
than 12 million b/d.
o A stalemated conflict would leave the market soft for the rest of
the year.
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CIA Support Ahead
To flesh out these issues we are in the process of canpleting a paper .-
assessing the vulnerability of key oil facilities in Kuwait, Saudi Arabia ands.;:
the UAE. The report will pinpoint critical installations, indicate their role,,
in maintaining oil deliverability and discuss potential repair and. restoration.,
problems. The report will be available on Friday morning. 125X1
SECRET
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Persian Gulf Region: Petroleum Industry
Euphryr
Hadithah
IRA
As'
Samawah
SOVIET UNION
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uwait
SY`lli4
41.,.. Oilfield
Gasfield
i Oil refinery
Kermanshah
Caspian
Sea
Dehlural,, It I
Boundary representation is
not necessarily authoritative
L Zakum A
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