THE PRESIDENT'S DAILY BRIEF 18 OCTOBER 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993960
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: October 18, 1973

DeclassifiecTin1ParC- Sanitized Copy Approved for Release 2016/06/20 : CIA-RDP79f0'0936A01s 1800020003-2
The President's Daily Brief
18 October 1973
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5B( 1),(2),(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
18 October 1973
PRINCIPAL DEVELOPMENTS
Military action in the Sinai was heavy yesterday,
while fighting on the Syrian front was limited mainly
to artillery duels and some air action. (Page 1)
The Persian Gulf members of OPEC have demanded a dra-
matic increase in crude oil posted prices, which the
oil companies probably will be forced to accept,
Arab oil producers also say they will reduce oil pro-
duction by 5 percent a month until Arab political de-
mands on Israel are met. (Page 3)
South Vietnam's rice supply problem has eased, but
supplies of rice will remain tight. (Page 4)
Sovieti
/ (Page 5)
Chinese leaders have agreed on the fate of several
former military and party leaders, but not on the
more sensitive problem of who should replace them.
(Page 6) -
Pakistan"
I (Page 7)
Turkey seems headed for a period of unstable coalition
rule following the victory of Bulent Ecevit's Republi-
can Peoples Party in the elections last Sunday.
(Page 8)
Notes on Arab dollar holdings
Cub
appear on Page
Soviet
and Soviet
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The Egyptian Front
?32
Alexandria
?30
312
314 Tel Aviv-Yafo
Mediterranean Sea ISRAEL
BaIti
atariyah
0,0
IsraeIi air strikes
P?11 and frogmen activity
Bay of
Palusiiim
Ismailia
?28
Al Minya
0. 0.
=Red
14f4hada Sea
((
0 MILES 50
Kilometers
28
Strait of
Ti ran
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FOR THE PRESIDENT ONLY
ARAB STATES - ISRAEL
Both Egypt and Israel reported that large-scale
tank battles took place yesterday in the central sec-
tor of the Egyptian front. An Israeli military spokes-
man characterized the armored clashes as the biggest
in Israeli history, and claimed that 90-100 Egyptian
tanks were destroyed.
Concentrated Israeli air strikes on the Port Said
area continued yesterday and the Israelis conducted a
raid by frogmen against the port. Several ships re-
portedly were damaged. The Egyptian Air Force was
more active and on several occasions pursued Israeli
planes back across the canal.
The fate of the small Israeli force that crossed
the canal north of the Great Bitter Lake two days ago
remains uncertain. Cairo claims that the force has
been destroyed, but the Israelis say it is still in-
tact.
There was little movement along the Syrian front
yesterday. Minor ground clashes and artillery ex-
changes took place along the same lines as the pre-
vious day. In the air, the. Israelis reportedly struck
Latakia and Tartus and claim to have downed eight
Syrian aircraft. The Syrians claim five Israeli
aircraft were destroyed. The Saudi Arabian force in
Syria, which has yet to see combat, has been located
just south of Al Harrah.
(continued)
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The Syrian Front
Damascus/
Mezzah
Baniyas
/1
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11
..,....._
Israeli Cease-Firel 1 Tell ech Charr
Line, 10(lune 1967
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HEIGHTS L......?) Saudi force N\ lawn
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Jordan -
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'.Shaykh Miskin
Damascus
Damascus/
International
Marl
Ruhayyll
0 5 10
Kilometers
5 10
15
15
Miles
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FOR THE PRESIDENT ONLY
Israel's Foreign Minister Eban said yesterday
that Tel Aviv is ready to "examine" a cease-fire
proposal, either for a cessation of hostilities
"in place" or along the lines that existed prior to
the current fighting. Eban said he thought Damascus
was "psychologically" ready to accept a cease-fire,
but that Cairo is still "living in a euphoria that
goes beyond the realities of its military situation."
He also took a dim view of the current prospects for
Soviet participation in any peace moves. Eban said
that the need for secure boundaries is now greater
than ever, and that an Israeli withdrawal to pre-June
1967 lines remains out of the question.
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INTERNATIONAL OIL
The Persian Gulf members of the Organization of
Petroleum Exporting Countries have presented Western
oil companies with a "take it or leave it" demand for
a 70-percent increase in crude oil posted prices.
The companies have little leverage in the current
sellers' market and probably will be forced to accept.
OPEC's demands for a price increase, first voiced
last June, probably have been strengthened by the
crisis atmosphere of the current Arab-Israeli hostil-
ities. Negotiations became deadlocked last week when
the producers asked for a 100-percent increase and
the companies offered 12 percent. Persian Gulf oil
prices previously have been set either by the com-
panies alone or through negotiations with the oil-
producing governments. These countries supply about
two thirds of the oil in world trade. The other mem-
bers of OPEC are certain to raise their prices to
reflect the Persian Gulf increases.
If the companies accept, Persian Gulf oil rev-
enues will increase by about $10 billion in 1974;
revenues of the other OPEC members will increase by
about $5 billion. The 1974 oil' revenues of Saudi
Arabia, Abu Dhabi, Qatar, and Kuwait--all of which
have limited abilities to absorb more capital--thus
will approach levels that were only recently being
estimated for 1980.
The increased cost in 1974 will probably be
about $3 billion for the US, nearly $8 billion for
Western Europe, and almost $3 billion for Japan.
Some of the increased cost, however, will return to
the industrialized countries through repatriation of
company profits and through the sale of goods and
services to the producers.
In Kuwait yesterday, Arab oil producers said that
they will reduce production by 5 percent a month until
Arab political demands on Israel are met. "Friendly"
states are not to be affected by the cutback. Such a
reduction would have little immediate effect, but de-
pending on how it is implemented, could cause consid-
erable economic dislocation in Western Europe and
Japan by mid-winter. The US, which had hoped to im-
port as much as 600,000 barrels per day of heating
oil from Europe to offset projected shortages this
winter, could also be affected indirectly.
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SOUTH VIETNAM
The South Vietnamese managed to move some
65,000 tons of rice out of the delta into government
stocks in September, nearly twice the average for
that month, easing fears of a severe shortage later
this year. Saigon's success is primarily the result
of heavy government pressure on delta merchants to
reduce inventories and suppress speculation.,
If delivery rates from the delta do not fall
below normal levels over the next few months, the
government will have enough rice to avert a crisis.
The expected arrival of 25,000 tons of PL-480 rice
in December will also help.
Nevertheless, the rice supply in South Vietnam
will remain tight. There will still be local supply
problems in deficit areas, the black market for rice
will continue, and retail prices are likely to rise
still further. Moreover, if Saigon increases its
already strong controls over distribution and price
levels--which now seems likely--some farmers may cut
back production next year.
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USSR-CAMBODIA
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CHINA
Chinese leaders have agreed on the political
fate of several former military and party leaders,
but not on the more sensitive problem of who should
replace them.
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PAK I STAN-AFGHAN I STAN
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TURKEY
Republican Peoples Party leader Ecevit has led
his left-of-center party to its first nationwide vic-
tory since 1961, winning a plurality of the votes cast
in the elections last Sunday and gaining 184 of the
450 seats in parliament. The previously entrenched
Justice Party suffered a severe setback, gaining only
149 seats. Two right-wing parties running for the
first time cut deeply into Justice's strength and
won 93 seats between them. Twelve seats are scattered
among several minor parties, and the results are not
yet in for a dozen others.
Former prime minister Demirel and other Justice
leaders have already ruled out joining Ecevit in a
coalition. If they persist, the social-democratic
Republicans may attempt to form a Coalition with one
.of the two rightist groups that now hold the balance
of power in parliament.: Such a coalition would be
fragile. Other possibilities are a conservative coa-
lition led by Justice, or a minority government led
by Ecevit.
None of these solutions will produce a stable or
effective government, and new elections may have to
be held. The military, which forced Demirel to resign
two and a half years ago and then gave directions to
interim governments, has thus far kept in the back-
ground. A prolonged political crisis could lead the
military to consider intervening once again.
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NOTES
International Monetary Developments: Arab oil
producers apparently are not selling large amounts
of dollars, despite recurrent rumors. In fact, it
is questionable whether the Arabs would want to dump
large dollar holdings because the transfers would be
expensive. Moreover, the Arabs probably are not
overly worried about a US freeze on their assets,
since most of their dollar holdings are in Western
Europe. In any case, the Arab oil producers have
enough funds that are beyond the reach of oil-
consuming countries to finance normal imports for
many months.
USSR-Cuba:
USSR:
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