NATIONAL INTELLIGENCE DAILY (CABLE) 7 JANUARY 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000100010019-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 20, 2016
• Sequence Number: 19
• Content Type: REPORT

Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
`e",F Director of i op secret
Central
Intelligence
National Intelligence Daily
(Cable)
7 January 1982
Top Secret
CO NIDC 82-00 5C
January 1982
Copy
___
Approved For Release 2007/08/26 : CIA-RDP84TOO301 R000100010019-6 ._ ,;
 Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
Approved For Release 2007/08/26: CIA-RDP84TOO301 R000100010019-6
 Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
Poland: Soviet and Vatican Influences . . . . . . . . . . i
Jordan - Saudi Arabia: King Hussein's Visit . . . . . . . 1
Sudan: Demonstrations Continue . . . . . . . . . . . . . 2
Spain: King's Concern About the Military . . . . . . . . 2
USSR-Czechoslovakia-Hungary: Combined Exercise . . . . . 3
Special Analysis
International: Oil Market Outlook . . . . . . . . . . . . 4
Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
25X1
I
25X1
 Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
Top Secret
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 law authorities. Moscow's initial public criticism
of the talks on Tuesday between President Reagan and Chancellor
Schmidt was predictable.
Moscow yesterday granted Poland soft currency cred-
its to cover a 1.2-billion-ruble trade deficit this year
as well as the 1.5-billion deficit from 1981. Earlier,
the Soviets had threatened to force the Poles to balance
their trade with the USSR. There was no mention in the
trade protocol of hard currency credits.
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 regime leaders accuse the
Church of having been too pro-Solidarity and point out
that some of Solidarity leader Walesa's advisers were
closely associated with it.
The government is also well aware of--and it is
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.
Despite government reports to the contrary, a Church
official yesterday scoffed at the idea that the Church
and regime are currently conducting a dialogue.
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
Top Secret
Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
25X1
25X1
25X1
I
25X1
 Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
far in their homilies. The authorities also prevented a
prison priest from visiting detainees after Archbishop
Glemp had paid an unexpected visit to the prison.
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
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 yesterday accused the US of
systematically manipulating its food aid to interfere in
Poland's internal affairs. The article alleges "unparal-
eled 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.
Approved For Release 2007/08/26: CIA-RDP84TOO301 R000100010019-6
 Approved For Release 2007/08/26: CIA-RDP84T00301 R0001 00010019-6
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
region.
//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
threat to the Arab regimes.//
Hussein probably hopes to capitalize on Saudi con-
cerns to promote closer political and security cooperation,
and get additional Saudi aid. The King believes that he
already has earned some credit with the Saudis by support-
ing Crown Prince Fahd's peace plan at the recent Arab
summit in Morocco.
of the war and have developed a close military relation-
ship with Baghdad. Hussein would be extremely reluctant,
//The Jordanians have backed Iraq since the beginning
however, to send troops to Iraq.
//Hussein also may want to discuss Saudi support for
Syria. I
Top Secret
25X1
25X1
25X1
25X1
25X1
I
25X1
Approved For Release 2007/08/26: CIA-RDP84T00301 R000100010019-6
 Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
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.
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
loyalty.
Although the
speech will reinforce the King's position as commander
in chief, it is unlikely to reduce the simmering discon-
tent in military ranks.//
Approved For Release 2007/08/26: CIA-RDP84TOO301 R000100010019-6
 Approved For Release 2007/08/26: CIA-RDP84TOO301 R0001 00010019-6
25X1
a combined Czechoslovak-Soviet-
25X1
Hungarian exercise--Druz a 82--will be held at the end
of this month. The exercise will involve 25,000 troops
and will take place in northwestern Czechoslovakia.
25X1
I
25X1
terms of the Confidence-Building Measures under the CSCE.
Approved For Release 2007/08/26: CIA-RDP84TOO301 R000100010019-6
 Approved For Release 2007/08/26: CIA-RDP84T00301 R0001 00010019-6
by Neil McKeown, CIA
Top Secret
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 Level 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--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 barrels
per day or more in 1982. This would make much more dif-
ficult and perhaps impossible for OPEC to prevent a de-
cline in nominal prices.
The Saudis and other OPEC members probably will be
largely successful in defending the $34 benchmark. Oil
prices adjusted for inflation, however, will almost
certainly fall substantially over the next 12 to 18
months, and real oil prices may decline 20 to 25 percent
through 1983.
Approved For Release 2007/08/26: CIA-RDP84T00301 R000100010019-6
 Approved For Release 2007/08/26: CIA-RDP84T00301 R0001 00010019-6
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.
Despite the supply cushion and prospects for a soft
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 dis-
ruption 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.
Approved For Release 2007/08/26: CIA-RDP84T00301 R000100010019-6
 Top Secret Approved
Top Secret
Approved
For Release 2007/08/26 : CIA-RDP84T00301 R000100010019-6