IRAN-IRAQ WAR: INCREASED THREAT TO PERSIAN GULF OIL EXPORTS

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 05258569
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 24
• Document Creation Date: March 8, 2023
• Document Release Date: August 2, 2019
• Case Number: F-2019-01318
• Publication Date: October 13, 1983

Approved for Release: 2019/07/26 C05258569
Ge+t, Director of
Central
Intelligence
Iran-Iraq War:
Increased Threat to
Persian Gulf Oil Exports
Special National Intelligence Estimate
SNIE 34/36.243
13 October 1983
Copy 388
(b)(3)
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
Warning Notice
Sensitive Intelligence Sources and Methods Involved
(WNINTEL)
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
DISSEMINATION CONTROL ABBREVIATIONS
NOFORN� Not Releasable to Foreign Nationals
NOCONTRACT� Not Releasable to Contractors or
Contractor/Consultants
PROPIN� Caution�Proprietary Information Involved
NFIBONLY� NFIB Departments Only
ORCON� Dissemination and Extraction of Information
Controlled by Originator
This Information Has Been Authorized for
Release to ...
Foreign Government Information
REL
FGI�
(b)(3)
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
SNIE 34/36.2-83
IRAN-IRAQ WAR:
INCREASED THREAT TO
PERSIAN GULF OIL EXPORTS
Information available as of 13 October 1983 was
used in the preparation of this Estimate.
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
�SteIteir
(b)(3)
THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organizations of the Departments of State, Energy, and
the Treasury.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
�STeltET--
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
CONTENTS
Page
SCOPE NOTE iii
KEY JUDGMENTS 1
DISCUSSION 7
Iraq's Predicament 7
Iraq's Strategy 7
Iraq's Options for Stopping Iranian Oil Exports 8
Effectiveness of Iraqi Attacks 9
Iran's Reaction 9
Iranian Military Reactions 10
Striking Iraq 10
Harassing Shipping 10
Attacks on Kuwait 11
Attacks on Gulf Oil Facilities 11
Closure of the Gulf 12
International Reaction 13
Arab Gulf States 13
Western Europe and Japan 13
Economic Impact of Gulf Supply Disruptions 14
Impact on the International Financial System 15
Implications for the United States 15
Impact on the USSR 16
-seefter-
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
SCOPE NOTE
This Special National Intelligence Estimate examines the outlook
for an abrupt disruption of Persian Gulf oil exports due to escalation of
the Iran-Iraq war in the next year. It examines Iraq's motives and
capabilities for attacking Iran's oil exports and Iran's likely response.
The impact on world oil supplies is examined and the implications for
the United States and the USSR. This Estimate was requested by the
Department of Energy. For more information on Iran, see SNIE 34-83,
Iran: Outlook for the Islamic Republic, 24 May 1983; for information
on Iraq, see SNIE 36.2-83, Prospects for Iraq, 19 July 1983; for
information on Soviet military capabilities in the Persian Gulf region,
see forthcoming NIE 11/39-83, Soviet Forces and Capabilities in the
Southern Theater of Operations.
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
;CCRCT
(b)(3)
KEY JUDGMENTS
The seemingly endless war with Iran and Iraq's worsening finan-
cial problems are forcing Baghdad to consider drastic military measures.
The French sale of five Super Etendard aircraft to Iraq increases the
possibility of an escalation of the Iran-Iraq war that could disrupt
Persian Gulf oil exports vital to the West. Iraq first will seek to exploit
the threat posed by the Super Etendard aircraft through diplomatic
steps both to gain financial relief and to pressure Iran to end the war,
but we believe these moves are likely to fail. We believe Iraq ultimately
will attack oil tankers calling at Iran's Khark Island but most likely after
a series of intermediate escalatory steps to increase the military pressure
on Iran.
Iraq might delay a military strike if its renewed discussions with
Syria on reopening the Iraq-Syria pipeline prove successful. Such a
move would gain Baghdad some financial relief.
We are unable to confirm press reports that France has delivered
the Super Etendards to Iraq, but we believe that, even if the aircraft
have not yet been delivered, Iraq eventually will receive them. Once
delivered, the aircraft probably would be combat-ready within a
month. France believes the survival of the Iraqi regime is critical to
Gulf stability and that delivery of the aircraft may precipitate events to
Iraq's advantage, possibly even ending the war. France's reliability as a
military supplier is also at stake.
Moreover, several sources have indicated that late next year France
will deliver to Iraq new Mirage F-1 aircraft configured to carry the Ex-
ocet missile. As a result, even if delivery of the Super Etendards is
canceled, Iraq probably will gain the same capability to hit tanker
traffic by late 1984. Finally, Iraq already has Super Frelon helicopters
armed with Exocet missiles which could be used in desperation to attack
tankers, although Iraq reportedly believes their slow speed makes them
too vulnerable.
Iraq would have three objectives in attacking Iran's oil lifeline: to
impair Iran's warmaking capacity by denying it revenues, to encourage
Iran to begin negotiations to end the war, or, failing that, to force the West
to intervene in the Gulf. If Iran retaliated against other Gulf oil exporters,
Baghdad would hope the Western powers would intervene to ensure the
safety of all oil exports from the Gulf, including those from Iraq.
-sc-C-RipT-
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
Iraq may intend initially to use the Super Etendards as a defensive
deterrent to shield repairs�which would take six months�on its
damaged oil export installations in the Gulf. Iran at any time could take
military action to prevent Iraq from repairing its facilities or resuming
oil exports from the Gulf, Nonetheless, Iraq then would argue that this
places the onus on Tehran for further escalation of the war in the
Gulf�giving Baghdad greater justification for using the Etendards to
shut down Iran's oil exports.
Baghdad probably would choose to prepare the way for attacks by
the Super Etendards on oil tankers by initiating a series of less drastic
measures. Such actions would be likely to include renewed public
warnings to Iran and neutral shipping, bombing raids against Iranian oil
installations�including Khark Island�and increased attacks against
Iranian cities, naval units, and shipping in the Gulf. We do not believe
such attacks on Iran would encourage it to negotiate for peace.
Once Baghdad began using the Super Etendards against oil tankers,
we believe it would conduct several attacks and then pause to assess Ira-
nian and international reaction. Iraq would have difficulty stopping
Iranian oil exports for an extended period unless it is prepared to
conduct repeated attacks against tanker traffic. International oil tankers
would stay away from Khark Island initially, but would be likely to re-
sume loading at Khark if Baghdad were unable to sustain its attacks.
Moreover, Iran is likely to reduce its oil prices to offset increased
insurance and chartering rates in hopes of encouraging shipowners to
continue serving Khark.
We believe Iraq would intensify its attacks on tankers if the initial
strikes with the Super Etendards did not result in movement either to
end the war or to alleviate Iraq's financial difficulties. Should the Iraqis
seriously damage or sink a number of tankers, they would virtually shut
down Iranian oil exports from Khark Island. Repeated Iraqi attacks
would make it impossible for Iran to entice even cash-starved shipping
firms to send their ships to Khark despite substantial price discounts on
Iranian oil.
Given our lack of information on Iranian plans and the decision-
making process in Tehran, we cannot be confident about the nature of
Iran's likely military response. Ayatollah Khomeini has warned publicly
that Iran will retaliate against all oil shipping in the Gulf if its own oil
exports are disrupted.
We believe that Iran will not strike lower Gulf oil targets or close
the Strait to oil exports except as a last resort, and that it probably will
take measured responses commensurate with Iraq's phased escalation.
2
�64�Efet�T--
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
Iran has sufficient foreign exchange assets to survive a short cutoff of oil
exports. Moreover, by showing restraint, Tehran would place on Iraq
the onus of threatening international oil shipping. In addition, Iran
probably would want to avoid provoking Western military interven-
tion�in part because it has limited capability to defend itself against a
likely Western military reaction.
On the other hand, we cannot rule out the possibility that
Khomeini may view Iraqi strategy as the logical culmination of the
West's desire to intervene in the Gulf and destroy the Iranian Revolu-
tion. He might therefore feel obligated to rapidly escalate the conflict
through attacks on Arab oil producers�especially Saudi Arabia�in an
attempt to close shipping, regardless of the prospect of military defeat
at the hands of the West.
Nonetheless, we expect some Iranian military response. Should Iran
retaliate directly against Iraq, it might try to bomb the airbase where
the Super Etendards were stationed or attack the Iraq-Turkey oil
pipeline. Should Iran decide to retaliate in the Gulf it could choose from
several options. Given Iran's capabilities, these are the most likely:
� Attack Kuwaiti oil facilities.
� Harass shipping in the Gulf or the Strait of Hormuz.
� Strike the oil facilities of Saudi Arabia, the United Arab Emir-
ates, Qatar, or Bahrain.
� Close the Strait of Hormuz by mining or blockade.
Iran has some capability to initiate any of these actions and even a
few attacks against well-chosen targets could do considerable damage to
Gulf oil facilities. However, Iran has little capability to sustain coercive
measures in the Gulf or in the Strait in the face of Western military op-
position.
If Iraq were able substantially to reduce Iranian oil exports, Iran
would consider drastic escalatory reactions, including attacks on oil
facilities in the lower Gulf or closure of the Strait of Hormuz to all ship-
ping. Iran's Navy is handicapped by numerous problems, but it has the
capability to close the Gulf by mining or blockading as long as the
action is not contested by Western navies.
Enough excess oil production capacity exists outside the Persian
Gulf to absorb the loss of Iranian oil exports and the effect of moderate
damage to oil facilities in the southern Gulf. Severe damage to the main
Saudi facilities or closure of the Strait of Hormuz, however, would
create a worldwide oil shortage and push up oil prices substantially. The
3
3ECRET
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
C.ECRET
(b)(3)
impact on oil markets and the extent of damage to the world economy
would depend on the size of the oil supply disruption and how long it
was expected to last. It is impossible to make precise predictions without
specifying the economic, political, or military scenario involved.
The United States has a large stake in the continued flow of oil
from the Persian Gulf in spite of the fact that US oil imports from the
Gulf are small (only about 2 percent of US oil consumption). Gulf oil
constitutes about 30 percent of oil demand in the non-Communist world
as a whole, 40 percent in Western Europe, and 60 percent in Japan. De-
nial of all or most of the source of supply for a substantial period of time
would create a worldwide oil shortfall much greater than that in 1973
or 1979. The United States could not insulate itself from the disruption
of the world oil market. In addition, the United States under the
International Energy Agency agreement is obligated under certain
circumstances to share the burden of a supply shortfall. The longer term
impact would depend on how the Persian Gulf political and military sit-
uation was finally worked out.
An Iranian blockade or mining of the Strait of Hormuz would
impact directly on Oman, whose territory is involved. Oman probably
would appeal for Western support, and the other Gulf states would not
impede such a move. Direct Iranian air, naval,. or commando attacks on
the Gulf states would produce varying reactions�from appeals to Iran
for forbearance to requests for Western military intervention�depend-
ing on the installation attacked and the number and intensity of the at-
tacks. Syria and Libya as allies of Iran would be expected to provide in-
creased political, propaganda, and material support to Iran.
Escalation of military activity in the Gulf would have serious
implications for the United States. We believe the Iranians would attack
Western naval ships attempting to break an Iranian blockade or to clear
mines from the Strait of Hormuz. Although Iran knows it could not halt
Western intervention, it would feel its credibility as a revolutionary
state was at stake and that, in any case, the West would not invade Iran.
The Khomeini regime also is likely to view even lesser forms of US
military intervention as a threat to its interests. We believe, however,
that Iran would not call for Soviet assistance, even if the United States
directly intervened in the Gulf. If the confrontation in the Gulf were
prolonged, Iran's attitude toward Soviet aid would be less certain. Soviet
pressure on South Yemeni and Ethiopian leaders to grant base facilities
to counter the United States would be likely to increase as a conse-
quence of US military intervention.
4
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
�SECRET�
(b)(3)
The Soviets would welcome any disruption of Western economies,
however short lived, caused by an interruption of Persian Gulf oil
exports. They also could acquire additional hard currency from oil sales.
The USSR would try to capitalize on a Western-Iranian confrontation,
probably by offering military aid to increase its influence in Tehran,
but such offers are unlikely to overcome basic Soviet-Iranian frictions.
On the other hand, the USSR would be concerned about any
buildup of Western military forces in the Persian Gulf. Moscow would
increase its intelligence-gathering efforts in the region as tensions
mounted and Soviet naval forces in the area probably also would be
augmented. If Western airpower in the region were increased, some
Soviet forces�particularly air and air defense units in the southern
USSR�would probably be placed on alert.
Limited Western strikes against Iranian airfields or ports are likely
to prompt the Soviets to admonish the West against invading Iran.
Militarily, the Soviets would probably step up air defense activities
within their borders and might alert and mobilize airborne units and
ground forces in military districts bordering Iran. They almost certainly
would do so if they believed a Western threat to invade Iran were
emerging.'
' For more information on Soviet military capabilities to respond to events in the West, see forthcoming
NIE 11/39-83, Soviet Forces and Capabilities in the Southern Theater of Operations.
5
Approved for for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
TURKEY
Iraq-Turkey Pips.
To ilea s..
oil ternSnal
SYRIA
citation of destroyed
Iraqi oil terminals
Iraq Saud( Arab
Neutral Zone
To Red sea oil terminal
SAUDI ARABIA I
re Oilfield
� Selected oil pipeline
voisi Oil terminal
0
Kilometers
\
700279 (545884) 10-83
Boundary representation ie
not nemesia,' authoritative
Ca Spia n
S
TEHRAN
Bandar*
Khomeyni
SOVIET UNION
lazireh-ye Khirk
(Murk Island)
dPectio�s
Az Zara'
(Zirkflh)
04
Jabal s; Zannah
(Jebel Dh nnnnn)
P.O. R. Y.
(E. YEMEN)
aMaximum radix, of Super Dent-lard
carrying two external tuei tare,
and one [coop) n io hi ;mite,
_
*-teo Bandar-e
'Abbas
\Achr in ish,r.ve
tc"
A
I nn
4.0
� c'eT
HAIM al Mubarraz
ne,,ned
6
-SeeRC-T-
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
ealarent--
(b)(3)
DISCUSSION
1. Iraq's inability either to resolve its serious eco-
nomic situation or to persuade Tehran to negotiate has
forced Baghdad to consider escalating the war with
Iran. The Iraqis have not yet exhausted their diplo-
matic options, but they are not optimistic that these
will succeed. Iraq reportedly believes that attacks on
oil tankers serving Iran will set in motion events that
would either end the war or reopen the Persian Gulf to
Iraqi oil exports.
Iraq's Predicament
2. Baghdad has few realistic military options for
ending the war. Despite its overwhelming superiority
in equipment, the Iraqi Army lacks the capability to
conduct a major offensive that would decisively defeat
the Iranians. Sporadic air attacks on Iranian economic
targets have not pushed the Iranians closer to a
settlement, and the current war of attrition shows no
sign of ending. Iraqi President Saddam undoubtedly
fears that the war of attrition will increase unrest and
worsen his internal security problems. One measure of
Iraq's desperation has been its reported use of mustard
agent in the war and its use of surface-to-surface
missiles against Iranian cities.
3. Moreover, the war is straining Iraq's economy.'
Two of Iraq's three prewar oil export routes have been
severed, reducing annual revenue by three-fourths.
The economy must bear war-related costs that may
reach $1 billion per month. We estimate that Iraq's
foreign exchange reserves will fall to $3-4 billion by
the end of 1983, as compared with $35 billion before
the war. Baghdad has been forced to defer some $4
billion owed this year to foreign suppliers. Iraq's
current account deficit this year will reach an estimat-
ed $15 billion, its ambitious development program has
been substantially cut back, and imports have been
sharply reduced.
4. The cause of Iraq's financial bind is the insuffi-
ciency of oil export revenues. The loss of its Persian
Gulf oil export terminals at the beginning of the war
For a more comprehensive treatment of Iraq's economic prob-
lems, see SNIE 36.2-83, Prospects for Iraq, 19 July 1983.
7
and the closure of the pipeline across Syria in April
1982 have reduced Iraqi oil export capacity by almost
80 percent. Iraq now has only one oil export route, a
pipeline across Turkey that has a current throughput
of about 800,000 barrels per day (b/d).
5. One possible source of short-term relief for Iraq's
financial problems is a resumption of exports through
the Iraq-Syria pipeline. Baghdad and Damascus have
recently resumed discussing the issue. Reopening the
pipeline, however, would be a major shift in strategy
by Syria, which has supported Iran for much of the
war. Substantial additional oil income would reduce
the pressures on Iraq to intensify the war in the Gulf.
Even if only the Syrian part of the pipeline were
opened�there is also a spur ending in Tripoli, Leba-
non�Iraq's earnings could be increased by some 50
percent from the current level of $7 billion annually.
Iraq's Strategy
6. Iraq's objective is to end the war and revive its
economy. It currently is engaged in a diplomatic
campaign to impress upon the international communi-
ty the likelihood of military escalation if the war
continues and Iraq's economic predicament is not
resolved. Baghdad probably seeks to persuade its Gulf
Arab benefactors to increase their subsidies to Iraq and
to allow Iraqi oil pipelines across their territory,
thereby relieving Iraq's financial crisis and eliminating
the need for military escalation. Iraq also is attempting
to persuade the Gulf states to join Baghdad in increas-
ing pressure on Tehran to demilitarize the Gulf to
guarantee free shipping to all Gulf states, including
Iraq�a suggestion which Tehran will reject. Baghdad
wants the West to end the flow of Western arms to
Iran, to stop purchasing Iranian oil, and to pressure
Iran to negotiate.
7. Iraq would prefer to accomplish its goals without
military escalation. But, if diplomacy and threat fail,
we believe Iraq will use the Super Etendard aircraft
against tankers calling at Khark Island, the terminal
through which 90 percent of Iran's oil exports flow.
Iraq is currently setting forth through its diplomacy
tremz...
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
(b)(1)
(b)(3)
the justification for such attacks. We expect the warn-
ings to become more pointed as Iraq moves closer to
military escalation.
8. Baghdad's primary instrument for escalating the
conflict will be the French Super Etendard fighter
aircraft armed with Exocet antiship missiles. Saddam's
military advisers recommended this summer that he
use the Super Etendards to attack oil tankers calling at
Khark Island,
They argued that attacks on oil tankers would increase
the threat of a cutoff of oil from the Gulf that
eventually could force the great powers, including the
United States, to intervene militarily. Iraq hopes that
the Western powers then would demilitarize the Gulf,
ensuring that Iraqi oil could flow through it again.
9. We are unable to confirm press reports that
France has delivered the five Super Etendard aircraft
to Iraq, but we believe that, even if the aircraft have
not yet been delivered, Iraq eventually will receive
them. The French have major investments in Iraq�
Baghdad owes Paris some $2 billion�and Iraq is the
largest Third World purchaser of French arms. More-
over, France believes the survival of the Iraqi regime
is critical to Gulf stability and that the delivery of the
aircraft may precipitate events to Iraq's advantage.
France's reliability as a military supplier is also at
stake.
10. Moreover, even if the Super Etendard deal is
canceled, Iraq may gain an enhanced capability
against Gulf shipping by late 1984. Several sources
have indicated that France late next year will deliver
new Mirage F-1 aircraft configured to carry the
Exocet.
11. The Super Etendards probably will be ready for
combat operations within a month of their arrival. The
Iraqi pilots who have trained on the aircraft in France
are some of Iraq's best pilots. After arrival in Iraq, the
aircraft will be checked out and final training missions
will be flown before the first operational mission is
launched.
12. After they became operational, Iraq could
choose to use the aircraft as a deterrent to shield
repairs on its damaged oil export installations in the
Gulf. Iraq probably could not resume oil exports from
the Gulf sooner than six months from the initiation of
repairs. Iran could use military action to disrupt
8
repairs or resumption of oil exports, but Iraq could
then argue that this justifies Iraqi use of the Etendards
against Iranian oil exports.
13. If Baghdad decides to initiate attacks on Iran's
oil exports, it may begin with a series of less drastic
measures. Such actions could include renewed public
warnings to Iran and neutral shipping, bombing raids
against Iranian oil installations, and increased attacks
against Iranian naval units and shipping in the Gulf.
Iraq initially might use the Super Etendards to hit
shipping at the Iranian port of Bandar-e Khomeyni.
Such attacks would provide Iraqi pilots with combat
experience with the Super Etendards while avoiding
the international repercussions of hitting tanker
traffic.
14. There are several reasons why the Iraqis might
take a gradual approach: their characteristic military
caution, the need to test the Etendards and their Iraqi
pilots against targets that are not heavily defended, the
hope of spurring mediation efforts, and the desire to
prepare world opinion for more drastic action. We do
not believe such attacks on Iran will encourage it to
negotiate for peace.
Iraq's Options for Stopping Iranian Oil Exports
15. Iraq can strike in three ways at Iranian oil
exports from Khark Island:
� Bomb pipelines, pumps, or manifold stations on
the mainland that serve Khark.
� Destroy storage tanks, pipelines, or loading points
on Khark.
� Attack tankers trying to load at Khark.
16. Iraqi attacks against mainland facilities serving
Khark are likely to be ineffective. Gravity would keep
the oil flowing at rates well above Khark's current
exports of about 2 million b/d. The only mainland
targets Iraq could destroy to reduce exports from
Khark significantly would be the pipelines, and they
would have to be struck repeatedly because they are
easily repaired.
17. Attacking Khark Island directly is not an attrac-
tive option for the Iraqis because of the potential for
significant aircraft losses and the complexity of the air
campaign that would be required. Khark is heavily
defended by HAWK surface-to-air missiles and anti-
Approved for for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
-5teRC-1--
aircraft guns. To date, Iraq has used conservative air
force tactics to avoid losses. Commando attacks could
be highly effective against Khark or associated main-
land facilities, but they would be risky and would be
out of character for the Iraqis. However, attacks on
Khark itself would have the propaganda value of
demonstrating to world opinion that, before attacking
tankers, Iraq had exhausted all other military options.
18. The Iraqis have the capability to attack tankers
calling at Khark Island even without the Super Eten-
dards. Super FreIon helicopters armed with Exocets
already in the Iraqi inventory have the range to reach
Khark Island, but the Iraqis reportedly believe their
slow speed makes them too vulnerable. The helicop-
ters have been used against merchant shipping close to
the Iraqi mainland. Sustained, intense bombing raids
by Iraqi aircraft could be effective in keeping tankers
away from Khark, but would be out of character for
the Iraqis.
19. The simplicity and relatively low risk of using
the Super Etendard make it the most likely weapon
the Iraqis would use against Iranian oil exports. To
ensure that only ships calling at Khark are struck, Iraq
would have to hit them at or near the island. To
minimize the risk of encountering Iranian air defenses
or fighter aircraft, Iraq probably would attempt first
to sink tankers near Khark but not at the island itself.
Sinking a tanker or setting one afire at a loading point
at Khark might be more effective because it could
render the loading point itself unusable. The Super
Etendard could execute such attacks from outside the
range of Khark Island's HAWK missiles.
Effectiveness of Iraqi Attacks
20. Once Baghdad begins using the Super Eten-
dards against oil tankers, we believe it will conduct
several attacks and then pause to assess Iranian and
international reaction. Iraq would have difficulty
completely stopping Iranian oil exports for an extend-
ed period unless it is prepared to conduct repeated
attacks against tanker traffic. Several reliable sources
suggest that international oil tankers would stay away
from Khark Island initially. But some tankers are
likely to resume loading at Khark unless Baghdad
announces it is determined to stop Iranian oil exports
and continues the attacks. Moreover, Iran is likely to
reduce its oil prices to offset increased insurance and
9
chartering rates in hopes of encouraging shipowners to
continue serving Khark.
21. Baghdad is likely to intensify its attacks on
tankers if the initial strikes with the Super Etendard
do not result in movement either to end the war or to
alleviate its financial difficulties. Subsequent strikes
are likely to be supported by other air and possibly
naval forces. Should the Iraqis continue damaging or
sinking tankers, they would virtually shut down inter-
national tanker traffic to and from Khark Island.
ndicate that repeated Iraqi attacks,
coupled with a public announcement by Baghdad that
it intended to stop oil exports from Khark Island,
would make it impossible to entice even cash-starved
shipping firms to send their ships to Khark despite
substantial price discounts on Iranian oil.
Iran's Reaction
22. Given our lack of information on Iranian plans
and on the decisionmaking process in Tehran, we
cannot be confident about the nature of Iran's likely
military response. Since the Iraqi-French Super Eten-
dard deal became public in late spring, senior Iranian
officials, including Ayatollah Khomeini, have warned
repeatedly that Tehran would close the Gulf if Iranian
oil exports were impaired. The Iranians also have
informed officials of several Middle Eastern govern-
ments that Tehran would attack Western oil installa-
tions in the Gulf and block the Strait of Hormuz as
soon as the Super Etendards attacked Iranian oil
exports.
23. Several factors suggest, however, that Iran's
response more likely would be graduated and depend
on the effectiveness of the Iraqi attacks. Iran's $13
billion in foreign exchange reserves reduces the eco-
nomic need for Tehran to retaliate quickly. By show-
ing restraint, Tehran could argue that Iraq is the real
threat to international oil shipping, thereby attempting
to create a rift between Iraq and its Western and Arab
supporters. A drastic Iranian response to Iraqi attacks
would raise the possibility of a Western military
response against which Iran could not adequately
defend. Furthermore, any Iranian closure of the Gulf
could jeopardize Iran's own seaborne exports and
imports.
24. If international tankers stopped serving Khark
Island, Iran also might be able to continue exporting
(b)(3)
(b)(1)
(b)(3)
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
SECRET
(b)(3)
about 20 percent of its current level of exports. To
achieve this it could load its own ships at Khark and
carry oil from there to international tankers at anchor-
ages near the southern end of the Gulf, outside the
range of the Super Etendard. Iran did this in the early
days of the war and was able to ship at least 200,000
b/d. However, Iranian shuttle tankers would be vul-
nerable to attack. In addition, loading terminals at
Sirri and Lavan Islands, at the outer limit of the range
of the Super Etendard, also can export about 200,000
b/d.
25. Iran also might retaliate in a nonmilitary way
through terrorist operations against French targets in
the Middle East. Iraqi exile groups supported by Iran
have threatened publicly to carry out such attacks if
the Super Etendards are delivered
Iranian Military Reactions
Striking Iraq
26. If Iran were to retaliate against Iraq, it probably
would try to bomb the airbase where the Super
Etendards are stationed or attack the Iraq-Turkey
pipeline. The Super Etendards are likely to be based at
an airfield in southern Iraq well within range of
attacking Iranian aircraft. However, the Iranian Air
Force generally has been ineffective in its attacks on
Iraqi airbases, and we believe Iran would be unable to
destroy the Super Etendards on the ground.
27. Attacks on the Turkish pipeline could be carried
out by Kurdish guerrillas receiving Iranian support, by
Iranian commandos, or by Iranian aircraft. All known
sabotage to the pipeline during the war has occurred
in Turkey. But any attack initiated by Iran would
harm Iranian-Turkish relations, a factor likely to deter
Tehran. If Iranian supply lines through the Gulf were
threatened, Turkey would become even more impor-
tant to Iran as a transit point for supplies. As a 'result,
we believe any overt Iranian attack on the pipeline
will occur inside Iraq. Damage to the pipeline itself
would cause only a temporary disruption to Iraqi oil
exports because most types of damage could be quick-
ly repaired. Damage to pumping stations would cause
longer periods of disruption, but the stations normally
are well defended.
28. Should Iran decide to retaliate in the Gulf, the
following options are the most likely:
� Attack Kuwaiti oil facilities.
� Harass ships serving Iraq's Gulf allies.
� Strike oil facilities of Bahrain, the United Arab
Emirates, Qatar, or Saudi Arabia.
� Close the Strait of Hormuz by mining or
blockade.
29. The hardliners in Tehran probably would re-
quire a military response of some kind, regardless of
whether Iraq was able to slow Iranian oil exports.
Iran's choice and timing of a retaliatory option would
be influenced by Iraq's success in disrupting Iranian
oil exports, Tehran's own military capability, and its
perception of the likely political and economic reper-
cussions. The Iranians will try to inflict the maximum
damage on Iraq while using the situation to weaken
the support of the Gulf Arabs for Baghdad, Iran also
will try to avoid giving the West a pretext to intervene
in the Gulf. Tehran would fear that an increased
Western military presence in the Gulf could become
permanent and might directly threaten the regime
while reducing Iran's dominance in the Gulf. As a
result, we would expect Iran's initial military response
to be at the lower end of the escalatory ladder�for
example, an attack on the Turkish pipeline, a strike on
Kuwaiti oil facilities, or general harassment of Gulf
shipping.
30. On the other hand, we cannot fully rule out a
sharp ideologically based response by Iran to rapidly
and fully escalate the Gulf conflict through attacks on
Arab oil producers�especially Saudi Arabia�and a
closure of the Gulf. Khomeini has long believed that
Iraq originally attacked Iran as a tool of Western
powers seeking to destroy the Iranian Revolution. He
may well believe that Iraq's effort to draw the West
into the Gulf is the logical culmination of such a
Western strategy and that the ultimate confrontation
with Western "imperialism- in the Gulf must be met.
Khomeini may believe that, although Iran would
suffer defeat in any naval engagement in the Gulf, the
Iranian Revolution must be upheld and Iran's position
in defending the Islamic world from Western gunboats
will in the long run be vindicated.
Harassing Shipping
31. Iran has the capability to harass ships serving
the Gulf states, and the Gulf countries would be
reluctant to challenge Iran. Iranian aircraft and ships
10
-seC-R6T-
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
bti-Kt I
(b)(3)
(b)(1)
(b)(3)
already monitor shipping through the Gulf. The Irani-
an Navy could board ships or force them to go to
Bandar-e Abbas for search or detention of the crew.
Iranian fighter aircraft stationed at Bandar-e Abbas
would provide cover for Iranian naval ships operating
there and also could harass shipping. However, if this
activity took place in Omani waters, the Omanis might
feel obliged to take some action to counter it.
32. Iranian President Khamenei in late September
threatened to -restrict- shipping in the Gulf if the
Arab Gulf states continued to allow their ports to be
used for the delivery of arms to Iraq. The USSR
currently is the only country delivering Iraqi-bound
arms to Gulf ports, and Kuwait is the primary trans-
shipment point. A selective Iranian blockade, there-
fore, could result in a Soviet-Iranian confrontation.
Attacks on Kuwait
33. Attacks on Kuwait would demonstrate Iranian
resolve to retaliate and directly involve Iraq's support-
ers. Early in the war Iran made several limited attacks
on Kuwait with little international reaction. The at-
tacks on Kuwait would not affect oil exports from
Saudi Arabia or the UAE as long as the military action
seemed unlikely to spread. As a result, Tehran proba-
bly believes that the great powers would not intervene.
It probably also would hope that other Gulf states
would blame Baghdad for making military decisions
that threatened their security.
34. The most critical economic target in Kuwait is
the Mina al Ahmadi Sea Island tanker loading termi-
nal through which most Kuwaiti oil is exported. The
terminal, some 16 kilometers offshore, is highly vul-
nerable to the kind of seaborne commando assault
Attacks on Gulf Oil Facilities
35. If Iraq were able to reduce the flow of oil from
Khark substantially, Iran would be forced to begin
drawing down foreign exchange reserves to meet
current levels of imports.' Demonstrations in major
Iranian cities this summer, partly over poor economic
conditions, suggest that major import reductions would
be politically risky. Iran instead might consider more
drastic retaliatory options, such as attacking oil facili-
ties in the lower Gulf or closing the Strait of Hormuz.
36. Iran could choose from among a large number
of vulnerable oil facilities on the Arabian Peninsula.
The export terminals at Ras Tanura and Al Ju'aymah
handle most Saudi oil exports and are vulnerable to
commando raids or air attacks by Iranian fighter-
bombers
37.
38.
' Iran currently is producing 2.5 million b/d and is exporting
some 1.9 million b/d. If exports were reduced to about 1.5 million
b/d, Iran would be forced to begin drawing down reserves or cut
imports. We estimate Iran has over $13 billion in foreign assets.
11
CC CRC
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
CRCT
39. Air attacks are another option. Even Saudi
Arabia, which has the largest air force of any Arab
Gulf state (see table 1), could not react in time to
prevent some Iranian fighter-bombers from attacking
critical targets. Iranian F-4 aircraft probably would
carry out these attacks at low altitude, using bombs or
air-to-surface missiles. Iran, however, could not sustain
an air campaign against Saudi Arabia's critical oil
facilities once the element of surprise was gone.
Closure of the Gulf
40. Iran has the capability to close the Gulf by
mining or blockade as long as its action is not contested
by Western navies. We doubt that the Gulf states
would engag- Iran on their own, except perhaps
Oman, through whose waters two main shipping
channels pass. Oman does have Jaguar aircraft with
British pilots and some missile boats within range of
the Strait of Hormuz, but probably could not stop Iran
from closing the Strait.
41. Iran could attempt to interdict or blockade the
Strait using its three destroyers, four frigates, and 10
missile patrol boats. Many of the weapons on these
ships are not operational, but they could intimidate
unarmed tankers and the navies of the other Gulf
states. Iran also has fighter aircraft at two nearby
airbases to back up a blockade. Using naval and air
forces to close the Gulf would allow Iran to continue
its own seaborne shipments, at least temporarily.
42. An Iranian declaration that the Strait had been
mined�whether or not this were true�probably
would be sufficient to deter most oil shipping from
attempting transit at least for a time. Iran has naval
mines in its inventory and, although it does not have
the expertise to lay a sophisticated minefield, is capa-
ble of laying mines randomly. Iran may have received
as many as 300 naval mines from North Korea,
Iran probably also has
some World War H-vintage British contact mines and
reportedly is receiving mines from Libya.
43. The Strait of Hormuz is difficult to mine
because of its depth, width, and strong currents. We
estimate, however, that only 15 mines laid covertly in
the main shipping channel probably would damage at
least one ship transiting the channel within the first 24
hours. Several hundred mines nevertheless would be
required to mine the entire navigable width of the
Strait effectively. We assess Iranian minelaying capa-
bilities are unsophisticated. Mines probably would be
laid indiscriminately.
44. Western navies would be required to clear the
Strait. France is considering redeployment of a mine-
Table 1
Persian Gulf Air and Naval Order of Battle
Iraq
Iran
Saudi
Arabia
Qatar
Kuwait
United
Arab
Emirates
Bahrain
Oman
2,500
30
Air Force
Personnel
30,000
50,000
17,000
300
4,000
3,000
100
0
Fighters
500
260a
170
0
50
30
Attack helicopters
125
100
0
0
23
6
0
0
Surface-to-air
missile launchers
345
300
90
18
27
21
0
24
Navy
100
Personnel
4,500
15,000
5,500
700
600
1,500
1,500
Major combatants
0
7
0
0
0
Missile boats
10
11
6
3
0
6
0
3
Coastal patrol boats
21
34
100
35
40
44
19
24
a Fewer than a third
of these are operational.
This table isrelett4Wakia.
(b)(3)
(b)(1)
(b)(3)
12
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
(b)(3)
sweeper force to the area. Saudi Arabia and Iraq have
minesweepers but their crews are poorly trained. The
length of time required to sweep the Strait depends on
the type of mines laid, the size of the area suspected of
being mined, and a variety of other factors, but weeks
could be required to sweep even a narrow channel
through the central portion of the Strait.
International Reaction
Arab Gulf States
45. The Gulf Arabs, in our judgment, are unlikely
to challenge Iran except when directly attacked. Oth-
erwise the Gulf states would attempt strenuously to
avoid hostilities and look to the West to remove the
Iranian threat. They all recognize that Iran is capable
of causing them long-term security problems and they
would strongly prefer to avoid actions that might give
the Iranians cause for future retaliation.
46. Direct Iranian air, naval, or commando attacks
on the Gulf states would produce varying reactions�
from appeals to Iran for forbearance to requests for
Western military intervention�depending on the
country and installation attacked and the number and
intensity of the attacks. The Gulf Arab states differ in
their willingness to cooperate militarily with the Unit-
ed States. If under attack, these states, with the
possible exception of Kuwait, would allow US forces
access to their airfields or ports. Oman, geographically
and politically removed from the Arab-Israeli dispute,
would be the most willing to provide facilities access to
the United States. Kuwait, host to a large resident
Palestinian population and highly vulnerable to Irani-
an pressure, would be the most reluctant to cooperate
militarily with the United States.
47. In our judgment, Saudi Arabia�the country
whose oil resources matter most to the United States�
would immediately seek US military intervention if its
oil facilities or territory were attacked by Iran. If
directly attacked, we believe Saudi Arabia, Oman, and
Bahrain would be willing to allow the United States
access to their facilities and to permit US combat
operations to be launched from their territory against
the Iranian threat.
Western Europe and Japan
48. Western Europe would look to the United States
to take the lead in any military response to a disrup-
tion of Gulf oil exports. Only France and the United
Kingdom could make a significant contribution to
Western military operations in the area, although both
would prefer that the Allies head off escalation of the
Iran-Iraq war through diplomatic efforts. Both are
handicapped, moreover, by other current out-of-area
requirements, including supporting the Multinational
Force in Lebanon. The French Navy in particular
probably would find it difficult to deploy substantial
forces to the Indian Ocean now.
49. If the United States took direct military action,
the French probably would join but would insist on
maintaining some distance from US policy and leader-
ship. French forces in the region�including ground
and air units in Djibouti as well as naval forces�are at
normal peacetime levels. Paris reportedly is consider-
ing plans to send a small mine-countermeasures force
to the Gulf if it appears the Iranians will mine the
Strait of Hormuz.
50. London would lend direct support for US action
to reopen the Strait of Hormuz or to respond to attacks
on oil facilities. Because of their continuing strong ties
in the area, the British would coordinate their response
with the Arab Gulf states as well as with the United
States and France. The British also might dispatch
some type of defensive armament to the aid of the
Gulf states, such as the Rapier surface-to-air missiles
sent to the UAE last year. A large-scale response would
force the United Kingdom to divert forces assigned to
the Falklands or NATO.
51. The normal British presence in the area�two
frigates and support units�is currently supplemented
by a task force, which includes a light aircraft carrier,
on routine deployment. In addition, a large UK force,
including two light aircraft carriers and amphibious
forces, is participating in NATO exercises in the
eastern Mediterranean.
52. Because West German leaders are highly sensi-
tive to Western Europe's dependence on Middle East-
ern oil, they would view any interruption of Gulf oil
exports with alarm and probably would acquiesce in
the movement of US military equipment through
West German facilities on a case-by-case basis. Given
Italy's vulnerability, Rome might consider providing
minesweeping units if an international effort were
mounted to reopen the Strait of Hormuz with naval
forces.
13
SECRET
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
SECRET
(b)(3)
53. The smaller European states, including Turkey,
would lend their support to US diplomatic efforts to
resolve the crisis. However, we believe that, short of a
direct military threat to their own security, the Turks
would be opposed to the use of their facilities by US
aircraft engaged in Persian Gulf operations. Turkish
military involvement is a possibility only if the oil
pipeline from Iraq were directly attacked by Iran.
54. If the United States decided to use force to
reopen the Strait, Tokyo would probably offer at least
tacit support. Strong public backing by Japan would
be likely to depend on whether Saudi Arabia and
Oman supported US military intervention and US
actions were the minimal necessary to reopen the
Strait. This condition would be tempered by the fact
that Japan would be faced with the loss of almost two-
thirds of its oil at a time when the world oil market
would be rapidly tightening.
Economic Impact of Gulf Supply Disruptions
55. The impact of any disruption of Gulf oil exports
in the near term would depend most importantly on
the market's expectation of the duration and magni-
tude of the disruption. In addition, the impact would
depend, of course, on the actual duration of the
disruption, the availability of non-Gulf oil, and petro-
leum stockpiles. The current combination of surplus
productive capacity and weak demand affords indus-
trialized countries considerable protection against a
short-term oil supply disruption. Current available
surplus capacity that could offset a supply cutback
stands at about 8 million b/d, but only some 3 million
b/d of that surplus is outside the Persian Gulf. (See
table 2.)
56. If only Iranian exports were disrupted, the
impact would be minimal for most consumers. Surplus
available capacity is sufficient to absorb the loss of
Iranian exports, currently averaging 1.9 million b/d.
Spot prices would begin to rise, however, if buyers
anticipated a further spreading of the conflict. At a
minimum, customers of Iran would be forced to line
up alternative supplies. Turkey, Spain, and Italy rely
on Iranian oil for at least 16 percent of import needs,
and Iranian oil accounts for 13 percent of Japanese oil
needs.
57. If Khark Island were shut down, the Iraqi
pipeline through Turkey severed, and Kuwaiti exports
Table 2
Non-Communist Oil Supplies a
Million barrels/day
Available
Capacity
Estimated
August
Production
Surplus
Capacity
Persian Gulf states
17.3
12.3
5.0
Saudi Arabia
8.5
5.5
3.0
Iran
3.2
2.5
0.7
Iraq
1.0 b
1.0
0
Kuwait
1.2
0.8
0.4
UAE
1.6
1.2
0.4
Other
1.8
1.3
0.5
Other states
33.2
29.9
3.3
Total
50.5
42.2
8.3
Net Communist exports
and refinery gain
2.0
2.0
0
Total supply
52.5
44.2
8.3
a Includes natural gas liquids.
b Represents the sum of Iraq-Turkey pipeline throughput and Iraqi
domestic consumption.
This table
cut off, 3.5 million b/d of exports would be lost,
eliminating most surplus capacity in the current mar-
ket and leaving oil-importing countries in a high-risk
situation. Although other Persian Gulf producers alone
could replace these lost supplies by increasing produc-
tion, the uncertainty surrounding the length of a
disruption and the risk to Gulf supplies would almost
certainly cause an increase in spot oil prices. Among
major importing countries, Brazil and Turkey rely on
imports from Iraq and Kuwait for more than 20
percent of their oil supplies. Whether price increases
were sustainable would depend largely on market
perceptions and the length and severity of the
disruption.
58. The United States has a large stake in the
continued flow of oil from the Persian Gulf in spite of
the fact that US oil imports from the Gulf are small (2
percent of US oil consumption). Gulf oil constitutes
about 30 percent of the non-Communist world's sup-
ply. Last year about 40 percent of Western Europe's
and 60 percent of Japan's oil needs came from Persian
Gulf countries. Denial of all or most of the source of
supply for a substantial period of time would create a
worldwide oil shortage much greater than in 1973 and
1979. Prices would skyrocket. The economic recovery
14
-Steer-
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
Seertia-
(b)(3)
in the developed countries would be interrupted. Oil
importers among the less developed countries also
would be hurt, and their ability to service foreign debt
greatly reduced. The United States could not insulate
itself from the disruption of the world oil market; it is
obligated under the International Energy Agency
agreement under certain circumstances to share in the
burden of any supply shortfall. The longer term
impact would depend on how the Persian Gulf politi-
cal and military situation was finally worked out.
Impact on the International Financial System
59. We believe that rising prices following a major
prolonged interruption of Persian Gulf oil exports
would have severe repercussions on the international
financial system, which already is strained by the
payments problems of the less developed countries.
The initial oil price shock would be destabilizing,
particularly for those banking centers and countries
with high exposure to LDCs that do not export oil. The
major industrialized countries would be faced with the
prospect of full-fledged recessions. IMF funds would
be inadequate to handle the new large loan requests.
60. Non-Gulf OPEC members and non-OPEC oil
producers would benefit most from the disruption.
Major OPEC debtors, such as Venezuela and Nigeria,
would move from large foreign reserves deficits to
surpluses. Iraq and Oman could experience financial
gains from the closure of the Strait as long as their
overland pipelines continued to function. The other
Gulf oil exporters could absorb losses over the short
term.
61. We believe many non-oil-producing LDCs
would face insurmountable financial problems. Banks
would be reluctant to grant loans and risk nonpayment
of debts. Some of these LDCs would be likely to turn
to the United States for funding and leadership in
handling their crises.
Implications for the United States
62. Escalation of military activity in the Gulf would
have serious implications for the United States. De-
pending on the severity of the threat to oil exports, the
Gulf Arabs, Western Europe, and Japan are likely to
press Washington to intervene militarily or through
diplomacy to solve the problem. The United States has
little diplomatic leverage over Iraq and none over
Iran. US military intervention, if required, would push
any hope of normalizing US-Iranian relations far into
the future.
63. We believe Iran would attack Western naval
ships attempting to break an Iranian naval blockade or
to clear mines from the Strait of Hormuz. Iran knows
it cannot halt Western intervention but would believe
its credibility as a revolutionary state was at stake and
that, in any case, the West would not invade Iran.
64. The Khomeini regime also is likely to view even
lesser forms of US military intervention as a direct
threat to its interests. The regime probably will try to
further unite the population against the United States
and to increase its invective against the West. We
believe, however, that Iran would not call for Soviet
assistance, even if the United States directly inter-
vened in the Gulf. At least initially the regime would
depend on its own resolve and perception of itself as
God-protected. If the confrontation were prolonged,
Iran's attitude toward Soviet aid would be less certain.
65. Tehran probably will choose to strike at the
United States through increased terrorism. The Irani-
ans might mount more operations against the US
Marines or other targets in Lebanon. They also could
be expected to consider attacking US embassies or
airlines worldwide.
66. On the positive side, escalation would tend to
reinforce US efforts to promote defense planning
between the United States and the Arab Gulf states. If
US intervention were effective and proportionate to
the threat, US standing among the Arab moderates,
particularly those hostile to revolutionary Iran, would
be enhanced.
67. US intervention would also have negative politi-
cal consequences in the region. Soviet pressure on
South Yemeni and Ethiopian leaders to grant base
facilities to counter the United States would be likely
to increase. In addition, if the Gulf states perceived US
intervention as disproportionate and needlessly in-
creasing propects for a US-Soviet confrontation in the
Persian Gulf, they would be reluctant to pursue close
association with US defense planning.
68. Over the long run, the threats to oil exports as a
result of the war will intensify efforts by Gulf oil states
to develop plans for alternate oil export routes that
bypass the Strait of Hormuz. For Iran this means
pipelines to the Gulf of Oman; for Arab producers,
15
-6EC-Rer
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
-seeRer-
(b)(3)
including Iraq, it means pipelines to the Red Sea, or
possibly the Indian Ocean.
Impact on the USSR
69. The Soviets would welcome any disruption of
Western economies, however short lived, caused by an
interruption of Persian Gulf oil exports. It would
create problems in the West and Japan and engender
strains between the West and the Third World as they
competed for the remaining oil available on the world
market. In contrast, Cuba, Vietnam, and Soviet allies
in Eastern Europe would be only slightly affected by
such a cutoff. The Soviets also could acquire additional
hard currency from oil sales at higher prices and could
underscore Moscow's claims to be a reliable energy
supplier and the need for Soviet-West European
energy cooperation.
70. Although the Soviets would welcome these
benefits, they would probably favor an early end to
any escalation of hostilities in the Gulf, especially if
the fighting threatened to lead to an increased US
presence. The Soviets consistently have called for an
end to the Iran-Iraq war because it has created
frictions over Soviet arms sales to both belligerents and
because Iraq has moved closer to moderate Arab states
while improving ties with the United States. The
Soviets might be tempted to try mediating the Iran-
Iraq conflict themselves. Baghdad would probably
welcome any effort to end the war, but Iran would
probably reject Soviet mediation. In addition, the
Soviets would not hamper efforts to mediate a Gulf
conflict, so long as the United States was not perceived
as the main broker.
71. The Soviets would seek to translate Iran's pre-
dicament into increased Soviet influence in Tehran.
16
The Soviets probably would offer to sell Tehran more
arms and perhaps even offer to augment Iranian air
defenses, but such offers are unlikely to overcome
basic Soviet-Iranian differences. Moscow would try to
minimize the adverse effect this would have on its
relations with Baghdad by emphasizing that its aid to
Iran was in response to a US threat.
72. The USSR would intensify its propaganda about
the US and Western threat to the Gulf. Moscow might
well refloat Brezhnev's call for an international confer-
ence on Gulf security. The USSR would caution
against Western attacks in an attempt to take credit
for preventing Western attacks on Iranian territory.
73. The USSR would be concerned about any
buildup of Western military forces in the Persian Gulf.
Moscow would increase its intelligence-gathering ef-
forts in the region as tensions mounted, and Soviet
naval forces in the area probably also would be
augmented. If Western airpower in the region were
increased, some Soviet forces�particularly air and air
defense units in the southern USSR�would be placed
on alert.'
74. Limited Western strikes against Iranian air-
fields or ports are likely to prompt Moscow both to
admonish the United States and the West to cease
their attacks and to warn them against invading Iran�
as Brezhnev did in November 1978. The Soviets
probably would also step up air defense activity within
their borders and might alert and mobilize airborne
units and ground forces in military districts bordering
Iran. They almost certainly would mobilize these units
if a Western threat to invade Iran emerged.
'For more information on Soviet military capabilities to respond
to events in the West, see forthcoming NIE 11/39-83, Soviet Forces
and Capabilities in the Southern Theater of Operations.
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
DISSEMINATION NOTICE
1. This document was disseminated by the Directorate of Intelligence. Because of the
sensitive nature of some source material reflected herein, this copy is for the exclusive
information and use of the recipient only.
2. This document may be retained, or destroyed by burning in accordance with applicable
security regulations, or returned to the Directorate of Intelligence.
3. When this document is disseminated overseas, the overseas recipients may retain it for a
period not in excess of one year. At the end of this period, the document should be destroyed
or returned to the forwarding agency, or permission should be requested of the forwarding
agency to retain it in accordance with IAC-D-69/2, 22 June 1953.
4. The title of this document when used separately from the text is unclassified.
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569
Approved for Release: 2019/07/26 C05258569