MOSCOW AND THE PERSIAN GULF

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100130059-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 21, 2016
• Document Release Date: November 18, 2008
• Sequence Number: 59
• Publication Date: May 12, 1972
• Content Type: IM

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DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Moscow and the Persian Gulf
Secret
96
]2 May 1972
No. 0865/72
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SECRET
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
12 May 1,972
Moscow and the Persian Gulf
1. Soviet policies in the Persian Gulf have
followed a consistent course over the past five
years. During this period, Moscow has probed the
area, seeking--as opportunities arose---o e;:tend
its political and military influence into a region
of traditional Russian concern. Iran, Iraq, and
Kuwait have been responsive to Soviet overtures.
Moscow has been particularly successful in using
economic openings with Tehran and Baghdad to foster
the growth of policies more friendly to the USSR.
After Kuwait gained independence in 1961, the
Soviets moved quickly to establish a diplomatic
mission. In 1970, Soviet representatives in Kuwait
arranged for Kuwaiti oil to be delivered to Japan,
a Soviet customer, in return for the shipment of
Soviet crude to Kuwait's clients in Europe.
2. gran is now the fourth largest recipient
of Soviet economic aid and the second largest re-
cipient of East European aid. Although this assist-
ance still represents only a small part of the total
financing for Iran's economic development program,
Soviet activity is the dominant foreign activity in
the northern part of the country and is important
in other sectors. The largest Soviet project in
Iran is the Isfahan steel mill, which the USSR
agreed to undertake after the West turned it down
as economically unfeasible. As repayment for most
of its credits, the USSR is taking a billion dol-
lars worth of natural gas from Iran over the next
decade.
Note: This memorandum was prepared by the Office
of Current Intelligence and coordinated within the
Directorate of Intelligence.
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3. The USSR also has emerged as Iran's third
largest arms supplier. The most recent agreement
brought Soviet military aid to Iran to a total of
more than $350 million. Tehran's purchases have
been confined to conventional armaments, such as
artillery and armored personnel carriers. The Shah
prefers not to purcha3e sophisticated arms from Mos-
cow in order to avoid becoming dependent on the So-
viets for technical assistance and spare parts.
4. Soviet-Iraqi ties have developed rapidly
and have led to the signing of a Treaty of Friend-
ship and Cooperation on 9 April. Last fall Moscow
agreed to deliver to Iraq military equipment worth
about $250 million. AAA guns, anti-tank rockets,
armored personnel carriers, and fighter aircraft
were included.
5. Article Nine of the Treaty of Friendship
and Cooperation could, moreover, lead to a greater
Soviet military presence in Iraq. That article
states, "In the interests of the security of both
countries, the high contracting parties will con-
tinue to develop cooperation in the strengthening
of their defense capabilities." This is a careful
formulation and raises the possibility of reciproc-
ity in the Soviet-Iraqi military relationship; the
formulation was not in the Soviet treaties with
Egypt and India. The friendship treaty with India
had no defense provision, and the treaty with Cairo
was designed "in the interests of...the United Arab
Republic" to strengthen only Egypt's defense capa-
bility.
6. In view of logistic constraints on Soviet
operations in the Indian Ocean, the USSR might be
interested in obtaining support facilities in Iraq
similar to those now available to the Soviet Navy
in the Mediterranean. Such facilities would in-
crease the on-station time of Soviet naval ships in
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both the Indian Ocean and the Persian Gulf. In ad-
dition, the Soviets could seek air access to speed
the exchange of naval crews and replacement of
parts and to provide landing facilities for naval
reconnaissance aircraft.
7. At the moment, Iraq does not have a suffi-
cient maintenance and repair capacity to handle So-
viet naval ships. The facilities of Basra, Iraq's
only large port, are in continuous use; those at
the small port of Umm Qasr would have to be expanded
to provide effective support. Umm Qasr does have a
natural deep harbor with a large anchorage area,
and the Iraqi Air Force has excellent facilities
nearby. The Iraqi Air Force, moreover, has with
Soviet assistance just built six military airfields
that could be used to support a Soviet naval pres-
ence in the Indian Ocean.
8. The friendship treaty also stated that the
Soviets' involvement in developing Iraq's industry
and natural resources would be strengthened. This
involvement has been increasing since 1969 when the
USSR committed at least $170 million to Iraq's na-
tional oil industry. The Soviets agreed to provide
equipment and technical services for projects, pri-
marily in the North Rumaila oil field in southern
Iraq, and they are slated to build a refinery at
Mosul. Soviet personnel are also surveying a pro-
posed pipeline from Baghdad to Bas-a and an exten-
sion of the pipeline from Baghdad to northern Iraq.
Most of this aid is to be repaid in crude oil de-
liveries.
9. In the long term, an increase in Soviet
political influence in the Persian Gulf would offer
Moscow an opportunity to exercise some influence
over the gulf oil industry. The Soviets have been
cautious about this, however, and with good reason.
The USSR is not only self-sufficient in oil, but is
a large net exporter of oil and is likely to remain
so throughout this decade. The Soviets, moreover,
would be reluctant to pay hard currency for Persian
Gulf oil and have shown no desire to absorb more
than a fraction of the oil produced there.
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10. Moscow's assistance to the oil'-prz;1voing
nations at present is confined mainly to produc`.ion
operations. The Soviets are not able to supplant
the various international companies in marketing
petroleum. In this field Soviet technical expertise
and machinery are in disrepute, and it is difficult
for the USSR to provide transport facilities. There-
fore, Moscow's policy has been merely to urge pro-
ducer governments to demand maximum revenues from
Western companies and to avoid incurring any obliga-
tions to purchase or dispose of the o:Ll. The Soviets
are also inhibited, of course, by the recent Arab
tendency to exclude foreign political influence frnm
the oil industry.
11. The departure of the British and the emer-
gence of the newly independent states of Bahrain,
Qatar, and the United Arab Emirates in the second
half of 1971 has presented the Soviets with new open-
ings for expanding their presence in the Gulf.
12. As in the case of Kuwait in the 1960s,
the Soviets will continue to press for a diplomatic
presence in these new states and in Oman, as well.
The Soviets also
may offer limited economic aid programs to the new
governments. This would enable Moscow to gain
greater knowledge of the area and to improve the
Soviet image throughout the Gulf.
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13. The Soviets are being cautious about en-
couraging subversive activity in the area. They
have established contact with the Popular Front for
the Liberation of Oman and Arab Gulf and the Bahraini
National Liberation Front and apparently have pro-
vided some small arms and limited funds to the former
through Yemen (Aden). As in the case of Aden, how-
ever, Moscow will wait until a radical element has
given evidence of being able to endure before chan-
neling more substantial equipment and support to the
liberation movement. Meanwhile, Soviet propaganda
has become less enthusiastic over the prospects for
success of liberation movements in the area.
14. Although greater soviet involvement in the
Gulf area is virtually a foregone conclusion, there
are limits on Moscow's freedom to maneuver. In the
first place, greater Soviet attention to the Gulf
could disturb the friendly relations that currently
exist between the USSR and Iran. The Soviet assist-
ance programs in Iran are large and important. They
are being implemented more rapidly than Soviet pro-
grams in other less developed countries; only India
and Egypt receive larger amounts of Communist aid.
The political and economic benefits that have ac-
crued to the USSR from its trade and aid ties with
Iran have become important policy considerations in
Moscow.
15. The Soviets have been telling Tehran that
the Soviet rapprochement with Iraq is not aimed
against Iran. On several occasions during the past
year, the Soviets tried to reassure the Iranians
regarding Baghdad's intentions and stressed Moscow's
desire to expand its ties with Iran. Last November,
for example, the USSR refused a request by Iraq that
Moscow protest Iran's seizure of islands in the Per-
16. While the Soviets could use naval facili-
ties in the Indian Ocean for their ships, they have
not assigned a high priority to securing such facil-
ities in the Gulf itself. One Soviet official has
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described the Gulf as a "mousetrap for all ships."
In any event, it will remain difficult fo the So-
viets to carry on naval activity in the Indian Ocean
and the Persian Gulf as long as the Suez Canal re-
mains closed. Soviet military activity could also
stimulate increased cooperation among the smaller
Gulf states, as well as strong reactions frcm Iran
and Saudi Arabia.
17. The Soviets probably will continue to en-
courage radical groups in the area, but will. be dis-
creet in order that their efforts remain undetected.
They will not provide substantial assistance to the
liberation movements and will not commit their own
forces to any attempt to overthrow the conservative
Gulf regimes. In view of the fragile political
structure .lr the area, however, it is well to remem-
ber that e?',:.n a minimal Soviet effort to support sub-
versi-ve groups could have considerable impact.
18. In sum, the Soviets probably will continue
to follow the policy they have pursued over the past
five years with significant success, particularly in
their relations with Iraq and Iran. Even better
ties with Iraq can be expected, and the Soviets will
use their influence to try to push the Baghdad gov-
ernment closer to their other major Arab clients,
Egypt and Syria. The USSR will avoid taking sides
in the disputes between Iran and Iraq, hoping the
Shah will come to accept the greater Soviet involve-
ment with Baghdad. In the long run, a stronger So-
viet political position and a more obtrusive military
posture can be expected throughout the Persian Gulf.
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