IMPLICATIONS OF IRAN'S VICTORY OVER IRAQ

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00176R001100130001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 20, 2016
• Document Release Date: May 14, 2007
• Sequence Number: 1
• Publication Date: June 8, 1982
• Content Type: SNIE

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Q
STAT
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Director F A/ Secret
Intelligence
Implications of Iran's
Victory Over Iraq
Special National Intelligence Estimate
Secret
SNIE 34/36.2-82
8 June 1982
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SNIE 34/36.2-82
IMPLICATIONS OF IRAN'S
VICTORY OVER IRAQ
Information available as of 8 June 1982 was
used in the preparation of this Estimate.
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS,
EXCEPT AS NOTED IN THE TEXT.
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
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SCOPE NOTE
The Intelligence Community in a variety of recent interagency and
departmental publications predicted Iraq's defeat and suggested a
number of consequences that might flow from it. The rapidity of Iran's
recent successes, continuing Iraqi ineptitude, and growing concern
among the moderate Arabs, however, underscore the need for both a
more topical treatment of the implications of the situation likely to
evolve over the next six months and a reassessment of some of our
m nts
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CONTENTS
SCOPE NOTE ............................................................................................................ iii
KEY JUDGMENTS .................................................................................................... vii
DISCUSSION .............................................................................................................. 1
Introduction ............................................................................................................. 1
The Challenges to Saddam Hussein ...................................................................... 1
Iranian Strategy for Toppling Saddam Hussein ................................................... 3
Increased Agitation and Limited Military Action ............................................ 3
Major Ground Offensive .................................................................................... 5
Iranian Internal Situation and Regional Aspirations ............................................ 5
Effect of Iranian Actions on Regional States ........................................................ 8
Saudi Arabia and Other Gulf States .................................................................. 10
Jordan .................................................................................................................. 10
Egypt ................................................................................................................... 10
Syria ..................................................................................................................... 10
Libya .................................................................................................................... 10
Israel .................................................................................................................... 11
Nonaligned Movement ....................................................................................... 11
Impact on World Oil Market ................................................................................. 11
Moscow's Attitudes and Options ............................................................................ 13
Probable Soviet Reaction if Iran Invades Iraq ..................................................... 13
Implications for US Interests .................................................................................. 14
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KEY JUDGMENTS
Iraq has essentially lost the war with Iran. Baghdad's main concern
now is to prevent an Iranian invasion. There is little the Iraqis can do,
alone or in combination with other Arabs, to reverse the military
situation.
The regime of Iraqi President Saddam Hussein has been severely
hurt. Given Saddam's track record as a survivor, however, his overthrow
is not necessarily imminent.
Althrnivh Iran has not launched maior around operations into Iraq,
ehran is now in an advantageous position to implement several
options:
- Increase agitation among Iraq's Shias and Kurds and support
incursions by Iraqi exile forces.
- Conduct air and artillery strikes across the border and launch
limited incursions by Iranian regular forces.
- Launch a major military attack into Iraq either to spark a
general insurrection or to cripple the Iraqi Army.
Pursuit of the first two options would increase the likelihood of a
"palace coup" against Saddam but is unlikely to lead to a rapid
overthrow of Ba'thist-Sunni rule in Baghdad. Tehran could continue to
pressure Baghdad economically and militarily for months or years
without resorting to an invasion. The Iranians might even succeed in ob-
taining "reparations" from the Gulf Arabs during this prolonged period
of tension.
If these options appear to be insufficient to bring down Saddam, or
Iraqi provocations continue, Tehran may become impatient and launch
a major ground attack into Iraq. If the Iraqi Army were severely
crippled, or Al Basrah occupied, the Ba'thist regime itself would be
badly shaken and Saddam's chances for survival would be minimal.
The lack of an apparent successor to Saddam points to a period of
collective rule-dominated by key military and security figures from
the current ruling clique-without major foreign policy changes.
Collegial rule would eventually break down as its leading figures,
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schooled in the politics of conspiracy and intrigue, sought preeminence.
Under these circumstances Iraq probably would again become more
radical in its outlook and seek better relations with the Steadfastness
Front.
I I The clerical regime in Iran-firmly in power for the
foreseeable future even after Ayatollah Khomeini dies-sees itself as a
leader of peoples "oppressed by imperialism," especially by the United
States. The war has fostered an Iranian-Syrian-Libyan alignment, but
this marriage of convenience is unlikely to last if Saddam is removed.
Syrian President Assad is likely to continue his support for Iran, al-
though he would probably disassociate himself from an Iranian occupa-
tion of Iraq. Assad fears a Shia fundamentalist regime in Baghdad that
might increase Iraqi support for Syrian Sunni fundamentalists opposed
to Assad's secular Alawite-dominated regime.
Nonetheless, we doubt that even a major Iranian invasion of Iraq
would trigger a general Arab-Persian war. None of the moderate Arab
states except Egypt has the military capability to make a large-scale
contribution to the fighting. Cairo, however, probably would not risk
heavy involvement in a potentially costly and protracted struggle with
uncertain outcome that at best would have only modest internal
support. The Gulf states, moreover, are already exploring ways to
appease Iran, most notably by offering to pay war reparations to
Tehran, if it would negotiate an end to the war.
The current situation in the war has so far had little impact on
OPEC and the world oil market. A cease-fire would renew slight
downward pressures on oil prices, while an Iranian invasion of Iraq or
attacks on oil facilities in Iraq or Iran might create a psychology of
shortage in the spot oil market despite little tangible effect on the
availability of supplies. The worst case would be Iranian attacks on Gulf
oil facilities that could substantially reduce exports for several months.
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To date, the Iran-Iraq war has had both positive and negative
effects on the Soviet position in the region. On the positive side-from
Moscow's point of view-it has:
- Created the possibility of greater turmoil and the eventual
replacement of some conservative regimes by anti-Western,
fundamentalist ones in a region whose stability is more impor-
tant to the West than the USSR.
- Helped to expand the Soviet-Iranian arms relationship, one
which may grow in the future because of Iran's increasing use of
Soviet arms.
- Significantly weakened the position of Saddam Hussein.
On the negative side of Moscow's perspective, the war has:
- Made a US military presence in the Persian Gulf less objection-
able to the moderate Gulf states, most of which lump together
the threat to them from Iran and the USSR.
- Further diluted Arab unity against Israel.
- Engendered dissatisfaction in both Iran and Iraq, because
Moscow's supply of arms to both sides has satisfied neither and
irritated both.
Although the war has complicated Soviet relations with both Iran
and Iraq, the Soviets will continue efforts to maintain influence in each
country. Primary Soviet efforts, however, will continue to focus on Iran;
it is the greater geostrategic prize.
The Soviets are eager to maintain an entree to the Khomeini
regime and have emphasized state-to-state relations)
The Soviets may hope that, if Iran invades Iraq, this will lead to
Saddam's replacement by a leader more sympathetic to the USSR. Short
of a Soviet invasion of Iran, however, Moscow's leverage over Tehran is
limited, and the Soviets are unlikely to take major steps to prevent an
Iranian invasion of Iraq, even if they perceived that it would result in
installation of a fundamentalist regime in Baghdad.
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A major problem for the United States in responding to the current
situation in the Iran-Iraq war is the search for ways to mitigate Iran's ef-
forts to export its revolution and to prevent Tehran from drifting
toward the Soviets.
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DISCUSSION
Introduction
1. Iraq has essentially lost the war with Iran:
- Iran has recovered most of its territory formerly
held by Iraq.
- The Iranian leadership believes its principles and
policies have been justified and its rule
strengthened.
- Iran's relative strength has been magnified by its
victories.
- The regime of Iraqi President Saddam Hussein
has been severely hurt.
2. Iraq remains desperate for negotiations and is
willing to make concessions, but Iran has shown little
interest in negotiating as long as Saddam remains in
power (see table 1). Even complete public vindication
of its position and substantial reparations-the Ira-
nians have reportedly used figures of $20-150 billion-
may not now be enough to entice Iran into negotia-
tions. Tehran's major considerations at the moment are
its choice of strategy for bringing down Saddam and
the effect of its military success on the Iranian domes-
tic political equation and on Iranian external policies.
The Challenges to Saddam Hussein
3. Saddam Hussein's total identification with the
costly and unpopular war points toward increased
challenges to his rule even without Iranian moves
against him. Saddam's decision to go to war with Iran
has been a disastrous mistake. His static battlefield
strategy has placed Iraqi forces in a difficult situation,
and damage to Iraq's economic and foreign policy
goals grows daily.
4. Two years ago Iraq aspired to leadership of the
Arab world, and sought to exploit expanding oil
exports to achieve this end. Today Iraqi human and
material treasure is being wasted in a war it is losing,
its Gulf ports are closed to trade, its oil exports and
domestic economic expansion program have been
reduced, and its international prestige and military
image are diminished.
5. The goal of reducing dependence on the USSR
for military equipment is now more distant because
Iraq must maintain delivery of needed Soviet arms.
Plans to host the nonaligned summit in Baghdad this
September, kicking off Iraq's leadership of the move-
ment for the next three years, are threatened. Iraq
today is more supplicant than leader, and its depend-
ence on moderate Arab neighbors, especially Saudi
Arabia, Egypt, Kuwait, and Jordan, for financial,
logistic, and political support is increasing.
6. Syria, Iraq's enemy on its western flank, has
become a more active adversary as the Damascus-
Tehran alliance has thickened. Syria, most likely with
Soviet approval, has increased its arms aid to Iran and
closed Iraq's oil pipeline across Syria to the Mediterra-
nean, reducing oil exports and depriving Baghdad of
about $6 billion annually in oil revenues. Syria also
closed its land border with Iraq, a move that has
delayed needed imports. Syrian support of Iraqi dissi-
dent groups has increased.
be increased plotting against Saddam~
Success for any would-be plotters is uncertain because
of Saddam's command of extensive levers of repres-
sion-most run by trusted family or tribal brothers-
and his record of striking first. (See inset on page 3.)
8. The most serious threat-barring assassination-
is likely to come from civilian and military leaders
who have so far suppressed their dissatisfaction with
Saddam's policies. These officials might attempt to
replace Saddam before his problems jeopardize contin-
ued rule by the Sunni Arab minority (only 20 percent
of the population)
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Iraqi and Iranian Negotiating Positions in the War
Desperate to get a negotiated settlement. Has
privately indicated that most issues are negotiable.
The central issue for Iraq. Iraq insists on Iraqi
sovereignty, with shared use. Has proposed a
settlement possibly based on the 1938 agreement,
providing Iraqi sovereignty but Iranian control of
waters around Khorramshahr and Abadan. May
accept 1975 Algiers Accord as basis for
negotiation.
Will agree to immediate, total withdrawal of
troops, if provided a cease-fire and Iranian com-
mitment to negotiate.
Has agreed to establishment of independent Orga-
nization of the Islamic Conference peace commis-
sion to determine culpability.
Reparations Insists negotiations to determine the aggressor
must take place first.
Recent statements by government officials more
hardline. Iran's objectives are: withdrawal, identifica-
tion of Iraq as aggressor, payment of reparations, and
removal of Saddam Hussein.
Iran cannot cede sovereignty. Has cited 1975 Algiers
Accord-giving Iran sovereignty over the eastern half
of the waterway-as possible basis for negotiation.
Algeria reportedly shares this view.
Insists on unconditional withdrawal before making
any commitments to negotiate.
Demands payment of substantial reparations by Iraq.
Payment must be agreed to before cease-fire. Amount
is reportedly negotiable and would be based on the
peace commission's determination of just payment for
actual damages.
Iran reportedly insists on return to Iraq of those
thousands of Iraqis expelled since the Iranian
revolution.
Would welcome mediation by any party likely to Might be amenable to Islamic or Algerian mediation
be successful. after Iraqis are out of Iran, but currently uninterested
in negotiations.
9. A takeover by the military acting alone appears
unlikely. The officer corps will be preoccupied with
long-term border tension or fighting with Iran. The
Ba'th Party is entrenched at all levels, including within
the Army, and, under Saddam, has made considerable
progress toward reducing the military's involvement in
politics.
10. The lack of an apparent successor to Saddam
points to a period of collective rule dominated by key
military and security figures from the current ruling
clique. A collegial leadership probably would not
make major foreign policy changes-it still wou"be
dependent on the Gulf Arabs for financial support,
would trade heavily with the West for civilian and
military goods, and continue to rely on the USSR as
Iraq's major source of arms.
11. Collegial rule would eventually break down as
its leading figures, schooled in the politics of conspir-
acy and intrigue, sought preeminence. A succession of
coups might ensue, bringing in new leaders from lower
ranks in the Army and the party. A power struggle
risks a return to a pattern of rule similar to early
periods, when Ba'thist ideologues preoccupied with
internal problems dominated Iraqi politics. Under
these circumstances Iraq probably would again be-
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Saddam's Response to Failure
Saddam possesses a strong drive for power and
an exaggerated view of his own capabilities which
disposes him to assess optimistically his chances of
success in any venture. Failure is a major blow to
his self-esteem, which places Saddam under sub-
stantial emotional stress, and inflicts a wound that
demands repair. Despite his grandiose self-image,
Saddam is fundamentally a pragmatic man in
touch with political reality. He has rebounded
from setbacks in the past and will probably react
to his current situation by seeking a course of
action designed to minimize his political losses,
find others to blame for the Iraqi defeat, regain
his sense of psychological and political control,
and repair his self-esteem.
necessarily imminent. Although Iran has not launched
major ground operations into Iraq, 25X
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Tehran is now in an a vantageous positio
implement several options. The Khomeini government
could opt for one of, or a combination of, the following
forms of military or paramilitary action:
- Increase agitation among Iraq's Shias and Kurds
and support incursions by Iraqi exile forces.
- Conduct air and artillery strikes across the border
and launch limited incursions by Iranian regular
forces.
- Launch a major military attack into Iraq either
to spark a general insurrection or to cripple the
Iraqi Army.
15. Iranian forces will probably clear the border
areas of some of the remaining pockets of Iraqi forces
before mounting a major push into Iraq. Iraqi forces
still occupy territory west of Dezful and in the central
border region. Military defeats in that area wofrit
bring the war closer to Baghdad 25X1
come more radical in its outlook and seek better
relations with the Steadfastness Front.
12.1 a popular uprising
against the regime appears the least likely prospect in
the near term. Appeals from Iran's Ayatollah Kho-
meini to Iraq's majority Shia Muslim community (see
figure 1 on next page) to revolt so far have been largely
ignored. Rebellious Sunni Kurds continue to be more
of an irritant than a threat to government survival.
Opposition forces seem incapable of fomenting open
revolt unless they overcome serious personality, reli-
gious, ethnic, and political divisions.
13. Nonetheless, if the removal of Saddam were
followed by a prolonged period of instability (includ-
ing a series of coups and countercoups) and particular-
ly if it were coupled with the unraveling of the Army,
prospects would improve for an Iranian-supported
Islamic fundamentalist government in Baghdad, domi-
nated by Iraq's majority Shias through such groups as
the Dawa Party. The collapse of the Army would
remove a principal means of Ba'thist and Sunni Arab
control and enhance the impact of Iranian efforts to
foment a Shia uprising. A Shia revolt in southern Iraq
probably would coincide with a surge of Kurdish
guerrilla activity in the north, providing a broad front
against continued Sunni control in Baghdad.
Iranian Strategy for Toppling Saddam Hussein
14. As suggested above, and given Saddam Hus-
sein's track record as a survivor, his overthrow is not
16. Whatever option Iran chooses, it is also likely to
continue its economic pressure on Iraq by denying
Baghdad the use of its Gulf ports and by encouraging
Syria to maintain its closure of the oil pipeline to the
Mediterranean. This pressure promotes Iraq's contin-
ued dependence on Gulf financial aid, on transporta-
tion links through Jordan, and on the vulnerable oil
pipeline through Turkey. Iran will continue its pres-
sure on the Gulf States to curtail their assistance to
Iraq.
Increased Agitation and Limited Military Action
17. We do not believe that the first option is likely
to lead to the overthrow of the Ba'thist government in
Baghdad, although increased Shia and Kurdish unrest
might increase the likelihood of a "palace coup"
against Hussein. Unlike their Iranian coreligionists,
Iraqi Shias are not well organized and seem less
influenced by their religious leaders, and are unwilling
to risk opposition to the regime for fear of punishment.
Economic and political inducements provided by the
regime promote the loyalty of other Shias. Because of
interfactional squabbling, Kurdish guerrilla leaders
have been unable to take meaningful advantage of
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Figure 1
Oilfields and Shia/Sunni Muslims in Iraq
Predominantly Shia Muslim
Shia and Sunni Muslims
0 300
Kilometers
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Al
Bagr Khorramshahr
Bo ndary;representation is
n t neceaearily aetfioritative.
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increased aid from Tehran and Syria and the near-
total drawdown of military forces in the north.
18. The Ba'th also has skillfully exploited ancient-
but still lively-Arab-Persian animosity to counter
Khomeini's appeal. The Ba'thist propaganda machine
has made sure that Tehran's mistreatment of its Shia
Arab minority and the economic and social upheaval
in Iran have not escaped the notice of Iraqi Shias.
19. Limited military moves by Iran might increase
the chances of success for local uprisings. These moves
in themselves could also erode the control of the
Baghdad government. The Iranians are providing
military training to some of the estimated 50,000
Iraqis expelled from Iraq during the past three years.
Iran has also publicized its support for an expatriate
force composed of Iraqi prisoners of war. Such "volun-
teers" could be introduced into Iraq if heavily sup-
ported by regular Iranian forces.
20. Iranian forces could also launch air attacks and
commando raids against strategic targets in Iraq,
particularly economic targets, and initiate small-scale
ground force incursions. These measures would fur-
ther increase the economic costs of the war for Iraq.
Military moves in the central region would bring the
ground war closer to Baghdad. The Iranian Army is
also well within artillery range of important economic
and military targets in the Al Basrah area
Major Ground Offensive
21. We believe that Tehran more likely will adopt
the first two options in attempting to topple Saddam
Hussein. If these options appear to be insufficient to
bring him down, or Iraqi provocations continue, Teh-
ran may become impatient and launch a major ground
attack. A number of considerations would militate
against such an attack. Tehran knows firsthand how a
foreign invasion can generate nationalism and popular
backing, and it might fear that an invasion would
spark fierce Iraqi resistance and galvanize internal and
international support for Saddam Hussein. The war
has also been costly for Iran, and this may discourage
the Khomeini regime from assuming the risks of
invading Iraq.
22. Tehran's statements about invading Iraq have
been ambiguous, and the Iranians no doubt hope that
threats to do so will be enough to achieve their ends
without their actually having to carry them through.
Saddam personally, rather than the regime generally,
has been the main target of Iranian propaganda. His
departure from the scene might be sufficient for
Tehran to begin peace negotiations. But if Saddam
holds on or if Tehran decides to push for a new regime
in Baghdad, the current military situation offers op-
portunities for Iran.
23. Al Basrah, Iraq's second-largest city, is the most
likely target of any major Iranian push into Iraq
during the next six months. The city is only about 20
kilometers from the border, within reach of Iranian
forces. Iranian forces could attempt to push to the
bank of the Shatt al Arab east of the city, hoping to
spark an insurrection
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24. A key to Iraq's defense of its territory will be
the morale of its troops. Most Iraqi regular forces have
fought hard despite recent defeats and probably would
resist any Iranian thrust into Iraq. The political leader-
ship would be less constrained by the fear of losing
troops and equipment and withdrawals could no
longer be justified. 2571-
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Moreover, the incompetence of
senior Iraqi commanders makes it possible that the
Iraqis would again squander their advantages in weap-
ons and defensive positions and suffer a major defeat
on their own territory. If the Iraqi Army were severely
crippled, or Al Basrah occupied, the Ba'thist regime
itself would be badly shaken and Saddam's chances for
survival would be minimal.
Iranian Internal Situation and Regional
Aspirations
25. The Iranian regime, under siege in the summer
of 1981, has been gradually consolidating its control.
The Iranian revolution was not just a change of elites
but a fundamental social upheaval that is reshaping
Iran. The ruling clerics, firmly in power for the
foreseeable future even after Ayatollah Khomeini dies,
are factionalized, but they agree on the principle of
clerical dominance. They intend to eradicate all West-
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ern influences from Iran, govern by strict Islamic law,
and promote economic self-sufficiency. They differ on
Iran's role in exporting the revolution.
26. The government has held together on the
strength of the Ayatollah Khomeini's support among
the clerical infrastructure, the Revolutionary Guard,
and the lower classes and of the regime's campaign of
repression. Its control is far from complete, but the
clerics are making effective use of a religious structure
that reaches to the village level. Mosques are used as
propaganda centers and food distribution points. In
addition, attendance is mandatory at Friday prayer
sermons, which have become a forum for political
indoctrination. Furthermore, the war with Iraq con-
tinues to divert attention from internal problems.
27. Success in the war with Iraq has at least tempo-
rarily halted the decline in the status of the regular
military. Repeated and extensive purges have re-
shaped the professional services and leading clerics
now publicly proclaim the Army an integral part of
the Islamic Republic.
28. The loyalty of the professional military, howev-
er, remains suspect, and many in the regime continue
to urge vigilance. After the war ends, debate on the
structure and size of, and even the need for, a regular
military will probably arise again. This is especially
likely if some leaders attempt to manipulate ties with
the military or if military leaders attempt to play a
political role. The clerics, including Khomeini himself,
have tried to forestall such activity by infiltrating
networks of loyalists at all levels of the armed forces
and by repeatedly and publicly ordering all those in
the military to avoid partisan politics.
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30. The Khomeini regime is likely to keep much of
the military along the western border after active
hostilities with Iraq end. The regime will want to
prevent demobilized troops from returning to civilian
society-and most likely unemployment-by co-opt-
ing them into reconstruction efforts in the war area or
other rural development projects. Some active units
will be stationed in Kurdistan, where Tehran has
problems with dissident minorities and in controlling
its borders.
31. The present Iranian regime's view of its mili-
tary needs are far more modest than were the Shah's.
To the degree that Iran decides to resupply, numerous
foreign sources will be cultivated to avoid dependence
on any bloc for arms.
32. The Khomeini regime sees itself as a leader of
peoples "oppressed by imperialism," especially by the
United States. Iran's anti-US hostility most directly
affects US interests in the Persian Gulf, where Iran's
stunning defeat of Iraq will establish the Khomeini
regime as the predominant power. This, coupled with
the clerics' religious zeal and traditional Iranian aspi-
rations, impel the regime to seek regional dominance.
In the clerics' eyes, the revolution was not intended for
Shia Iran alone, but for all "oppressed" Muslims.
33. Iran seeks to redirect the other Arab regimes in
the Gulf away from cooperation with the United
States and toward accommodation with Iran. Tehran
has announced that the Gulf states must end their
support for Iraq because their "future will be deter-
mined" by their relations with Iran. The Khomeini
regime will use a variety of options in pursuing its
objectives: subversion, threats, diplomacy, and possibly
military action. Iran, by virtue of its population,
resources, and historical ambitions, can be expected to
turn its attention increasingly to the Gulf after the war
to assert its dominance there.
34. How much Iran's internal problems will act as a
constraint on its actions in the Persian Gulf region is
uncertain. But the temptation to champion the cause
of revolution in the Gulf-whether out of convi5JX1
or political expediency-probably will prove irresisti-
ble to the Iranian clerics. Tehran is likely to rely on
conventional diplomacy (backed by veiled threats) and
subversion rather than military force in the pursuit of
its objectives. The Iranians have already made one
effort to overthrow Bahrain's government-last De-
cember, using Shia dissidents. They will continue to
train, arm, and finance other Gulf revolutionaries
sympathetic to Iran's fundamentalist ideology.
35. Although many Muslims find aspects of an
Islamic revolution appealing, Iran faces major hur-
dles-Shia factionalism, historical Shia-Sunni differ-
ences, and the hostility between Arabs and Persians.
Most Gulf states' Sunni Arab majorities may prove to
be a natural barrier to the spread of Iran's Shia
revolution. (See figure 3.) Still, the Iranians probably
are convinced they can exploit the same popular
grievances against corruption and the spread of West-
ern, secular influences in the Gulf that led to the
downfall of the Shah.
Effect of Iranian Actions on Regional States
36. Iranian efforts have focused heavily on the Gulf
Shias. They have made little effort to make common
cause with local leftist dissidents or Sunni Muslirh
fundamentalist groups, such as the Muslim Brother-
hood. In Bahrain, Shia fundamentalists have actually
worked against leftist groups.
37. In the short run the most serious dangers to
internal security in the Gulf states probably are spo-
radic outbreaks of Shia violence sparked by further
Iranian military victories against Iraq or Iranian-
inspired terrorist attacks. These could trigger harsh
government reprisals against Shia dissidents, which
could in turn sharpen Sunni-Shia communal tensions
25X1
25X1
38. Kuwait is the only nonbelligerent state Iran has
attacked and its continuing importance as a key supply
route for Iraqi war materiel makes it a candidate for
direct Iranian attacks. On the other hand, Iran's ability
to foment unrest in Kuwait over the short run appears
slight.
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25X1
Figure 3
Shia Muslim Population as Percentage of Total Population
Boundary representation is
not necessarily authoritative.
Romania
Yugoslavia
vi et
Bulgaria
Albania 131ack oo
Caspian Greece's
Turkey
5%
e ~~ L
er~at,~rranear'i~ea cps us S r i a
r y
Lebanon 16% Afghanistan
30io r a n
Israel r a 93 %
55%
i1jordan
Pakistan
Ku ail
haq St.df A1 a 17%
E g y p t h ~l zoeo /Frsh)t?
Gulf j ~
Bahrain
C 65% it., ~40% Gull of Oman
United Arab
/\ Emirates
Saudi Arabia
0 18%
5/0
Oman V
2%
Rod
tea
South
North
Yemen
S u d a n 50% 5r rabian
Sccotre
Djibouti Gulf of Aden
(S. Yemen)
Somalia
Ethiopia / 25 1
/ i 0 500
d
*Syrian percentage includes members of the Alawite sect Kilometers
631967 6-82
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39. An Iranian invasion of Iraq would strain the
fragile cohesion of the Saudi-dominated Gulf Coopera-
tion Council and possibly further weaken the moder-
ate Arabs' confidence in the United States. Iranian
subversion of Iraq, if successful, would have a similar
impact, but over a longer time frame.
defeat becomes more real. The King will continue to
encourage the United States to become involved in
trying to end the war.
Egypt
45. Cairo, although alarmed at the prospect of an
Iranian military victory, is constrained by a lack of
popular or military support for a potentially costly and
protracted confrontation with Tehran. To help contain
40. The Gulf states will do whatever is within their
limited power to retain a sympathetic Iraqi regime.
However much Iraqi forces have been discredited by
the war, the Gulf states still believe that only Iraq
stands between them and the spread of Iranian and
radical Arab influence in the Gulf.
41. If Iran stops its advance at the border and
initiates either a war of attrition or protracted negotia-
tions designed to undermine Saddam, the Gulf states
will continue to provide logistic and financial support
to prevent Iraq's position from deteriorating further.
They also will encourage Jordan and probably Egypt
to help bolster Baghdad in whatever way they can. At
the same time, they have renewed Gulf offers to Iran
to help pay war damages in the hope of inducing
Iran's leaders to accept a compromise with Baghdad.
42. The Gulf states will not commit military forces
to the fighting. They know this would have no impact
on the outcome and would only increase the risk of
Iranian retaliation. Rather, if Iran were to invade Iraq
in force or to open supply lines to Shia and Kurdish
rebels inside Iraq, the Saudis and others-besides
looking more anxiously to the United States-probably
would cast about for some way to involve the Arab
League or the United Nations to shore up Saddam
Hussein or a like-minded Baghdad regime.
44. Jordan has increased its efforts to galvanize
Iran, Egypt wil
25X1
allow Iraq to recruit additional volunteers from the
large Egyptian work force in Iraq.
46. Cairo also could offer to send military advisers
to the Gulf states and appeal to the United States to
increase its security assistance to these states. An
Iranian military advance into Iraq that appeared to
threaten Kuwait or Saudi Arabia might cause Cairo to
send pilots to these states to bolster their air defenses,
or dispatch a token force.
47. President Mubarak also probably would again
ask the United States to provide discreet aid to Iraq, or
request that Washington give Egypt the means to
increase its own military assistance effort. Egypt is
unlikely to commit large numbers of ground forces to
the fray, and in any case lacks the capability rapidly to
move a significant force to Iraq.
Syria
48. Syria's President Assad will try to exploit the
Gulf states' growing fears of the Iranian-Syrian tactical
alliance for his own ends. Fear of Damascus-inspired
subversion has already stalled Saudi efforts to gain
support from the Gulf Cooperation Council for action
against Syria for supporting Iran. In fact, the Saudis
recently made a Baghdad subsidy payment to
Damascus.
rundamentalists opposed to Assad's secular Alawite-
ominated regime.
hat might increase Iraqi support for Syrian Sunni
~e likely to disassociate himself from such action.
ssad fears a Shia fundamentalist regime in Baghdad
49. Assad is likely to continue his support for,Ir~aj1
although he opposes an occupation of Iraq and would
Libya
50. Libyan leader Qadhafi will continue to provide
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Tehran continues to keep economic and military
pressure on Iraq. An Iranian invasion of Iraq, particu-
larly one using Iraqi dissidents as surrogates, is unlikely
to upset the Libyans. At the same time, Qadhafi-to
help his international credentials-might be interested
in acting as an intermediary in peace negotiations in
the event of a cease-fire.
The Arab forces
that could be arrayed against Israel will be sharply
reduced as long as tensions remain high around the
Persian Gulf
Nonaligned Movement
52. With their scheduled summit in Baghdad only a
few months away, most members of the nonaligned
movement (NAM) would regard an Iranian invasion of
Iraq as an embarrassment. NAM moderates-notably
India, Algeria, and Yugoslavia-want the war to end
as soon as possible to prevent more damage to their
fractured organization. An invasion could prompt the
NAM to launch another collective attempt at media-
tion in hopes of bringing about a political settlement,
but such ventures probably would not work any better
than they have in the past.
53. Meanwhile, NAM radicals-led by Cuba, which
currently chairs the NAM, and including North Korea
and Vietnam-would use an invasion as another ex-
cuse to seek postponement of the Baghdad summit and
allow Havana to extend its chairmanship. The moder-
ates, although anxious to hold the summit-and to
transfer the chairmanship-on schedule, would prob-
ably go along with postponement if the war were
carried into Iraq.
54. The radicals generally are pleased to see Tehran
gain the ascendancy in the war; most moderates-a
majority of the NAM-favor Iraq. If, instead of
invading Iraq, the Iranians tried to subvert the Iraqi
Government, the moderates could, and would, do little
more than express their disapproval.
Impact on World Oil Market
55. The war has so far had little impact on OPEC
and the world oil market. A cease-fire, an Iranian
invasion of Iraq, or attacks on oil facilities would have
varying effects on the psychology of the marketaa 1
the availability of supplies. 25X1
56. The Iraqi oil industry would benefit the most
from a cease-fire as long as Tehran did not attem,15tx11
prevent an increase in Iraqi crude exports: 25X1
- If Damascus allowed Iraq to resume pumping oil
through the Iraq-Syria pipeline system, Baghdad
could immediately increase exports from the
current level of about 650,000 barrels per day (all
of which moves through the pipeline across
Turkey) to about 1.5 million barrels per day. This
would be above Baghdad's OPEC production
quota of 1.2 million barrels per day.
- As before the war, however, Baghdad probably
would not rely on the Syrian pipeline because of
its political vulnerability, and instead prefer to
ship most of its oil from its Gulf terminals. Iraq
probably could resume crude exports from the
Gulf within four to six months, because most of
the equipment needed to repair Iraq's offshore
terminals already is stockpiled in Bahrain. With-
in another two to six months, Iraq's total oil
exports probably could be restored to prewar
levels of more than 2 million barrels per day-
mostly from the Gulf terminals.
57. An Iraqi attempt to increase exports to 2 million
barrels per day, however, would renew downward
price pressures in the world oil market. Defense of the
$34 OPEC benchmark price would require the con-
tinuation of an effective OPEC production allocation
scheme, with Saudi Arabia willing to continue to
produce at relatively low levels. In this situation, Saudi
Arabia probably would press Iraq to stay within its
OPEC production quota. Iraq might be willing to
phase in production more slowly than capacity would
allow in exchange for a continuation of loans from
other OPEC members.
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58. A cease-fire would have only a small impact on
Tehran's ability to produce and export crude. The war
has not imposed any significant constraints on Iran's
export capabilities. A reduction in war-risk insurance
on tankers calling at its Khark Island terminal, howev-
er, would further improve the price competitiveness of
Iranian oil and make it easier for Tehran to increase
exports.
59. An Iranian military move into southern Iraq
would have no immediate effect on current Iraqi
crude oil exports. All Iraqi crude oil production and
processing now takes place in the north, with exports
limited to the Iraq-Turkey pipeline. Military action in
the south, however, could jeopardize oilfields contain-
ing over half of Iraq's productive capacity and threat-
en the largest refinery in the country:
- All of Iraq's major southern oilfields-with a
total capacity of about 2 million barrels per
day-are within about 75 kilometers of the
border.
- The Al Basrah oil refinery-accounting for about
45 percent of Iraqi refining capacity-is located
on the west bank of the Shatt al Arab, about 20
kilometers from the border. It is not operating.
60. As long as the Iranians occupied the area,
Baghdad would be unable to produce or export crude
oil from its southern fields. Moreover, Tehran might
order the destruction or removal of oil equipment
from occupied areas in retaliation for similar Iraqi
actions, significantly reducing Baghdad's ability to
restore its oil industry quickly to prewar conditions.
Major market reaction would be unlikely unless there
was evidence that the war was expanding beyond Iraq
and Iran.
61. Iraq retains its capability to strike at economic
targets in Iran. The Iraqis have conducted airstrikes
against Iran's principal oil export facility at Khark
Island, but they have been ineffective. As the war
continues to go poorly for Baghdad, the Iraqis might
intensify air attacks against Iranian oil installations.
Even simultaneous attacks by both countries against
each other's oil facilities, however, would be likely to
have limited impact on their present level of oil
exports.
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63. A major Iranian military attack on one or more
of the Gulf states appears remote. Nevertheless, Gulf
leaders are increasingly worried about Iranian military
intentions as a result of Iran's latest gains against Iraq.
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Moscow's Attitudes and Options
66. To date, the Iran-Iraq war has had both positive
and negative effects on the Soviet position in the
region. On the positive side-from Moscow's point of
view-it has:
- Created the possibility of greater turmoil and the
eventual replacement of some conservative re-
gimes by anti-Western, fundamentalist ones in a
region whose stability is more important to the
West than the USSR.
- Helped to expand the Soviet-Iranian arms rela-
tionship, one which may grow in the future
because of Iran's increasing use of Soviet arms.
- Significantly weakened the position of Saddam
Hussein.
On the negative side of Moscow's perspective, the war
has:
- Made a US military presence in the Persian Gulf
less objectionable to the moderate Gulf states,
most of which lump together the threat to them
from Iran and the USSR.
- Further diluted Arab unity against Israel.
- Engendered dissatisfaction in both Iran and Iraq,
because Moscow's supply of arms to both sides
has satisfied neither and irritated both.
67. Despite antagonisms, the Soviets will continue
to attempt to maintain influence in both Baghdad and
Tehran. Since it resumed arms deliveries in the spring
of 1981, the USSR has been responsive to Iraqi
military needs. Political relations have also rebounded
somewhat. Since March, the Soviets have hosted visits
by Iraqi officials while Baghdad has received a num-
ber of ranking East Europeans and a high-level Soviet
Foreign Ministry official. These positive Soviet mili-
tary and political gestures toward Baghdad reflect
Moscow's interest in maintaining relations with Iraq.
Despite Soviet dissatisfaction with Saddam's drift to-
ward the West and conservative Arabs, Iraq, in Mos-
cow's view, remains a friendship treaty partner, a
traditional opponent of US policies in the Middle East,
a source of hard currency, and potentially a rich
market for arms to replace those lost in the war.
68. Nonetheless, the Soviets clearly recognize Iran
as the greater geostrategic prize and are eager to
25X1
25X1
69. Bilateral trade with Iran increased to a record
of $1.1 billion in 1981, exceeding prerevolution aver-
ages and more than double the abnormally low $515
million for 1980. There are now at least 2,000 Soviet
advisers in Iran engaged in a wide variety of economic
and technical projects and some military assistance
programs. This is about the same number of advisers
as there were under the Shah but a substantial increase
over the number present in the early days of the
revolution. Both sides appear interested in expanding
joint industrial projects in Iran.
71. Despite this convergence of interest in the
economic field and the slight increase in political
contacts in recent months, sharp differences remain
over specific issues-such as the USSR's provision of
weapons to Iraq and the Soviet military presence in
Afghanistan. These factors, coupled with the Iranian
leaders' suspicion of the USSR, are likely to preclude
any significant improvement in relations between the
two countries in the short term.
Probable Soviet Reaction if Iran Invades Iraq
72. The Soviets are unlikely to take major steps to
prevent an Iranian invasion. Moscow claims it has al-
ready conveyed to Tehran its objections to an Iranian
invasion of Iraq. Moscow might seek to dissuade Iran
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by referring to the Soviet-Iraqi friendship treaty or by
trying to employ the Syrians-who share Soviet inter-
est in blocking the establishment of a fundamentalist
regime in Baghdad-to lobby with the Iranians to halt
any drive in Iraq. But the Soviets would probably be
unwilling to slow an Iranian advance by delaying the
delivery of additional war materiel from the USSR or
other countries to avoid antagonizing Iran.
73. The Soviets could also propose a negotiated
settlement and seek to orchestrate such an effort by
Third World states. Although they will not attempt to
block efforts by other parties to arrange a settlement,
they would try to forestall any attempts by the United
States to improve its position in the area through
mediation.
74. Should Iran continue its offensive into Iraq, the
Soviets may hope that it could ultimately redound to
their benefit. Moscow may believe the invasion would
ultimately fail from some of the same problems that
caused the Iraqi invasion of Iran to falter: initial
successes would be faced by stiffened resistance of
Iraqi troops fighting on their own soil, and the Iranians
would have difficulties in supplying an offensive and
maintaining the motivation of the troops who would
be dying on foreign soil. Moreover, the invasion could
bring about the fall of Saddam and the installation of
new leaders who would turn to the Soviets for help.
75. If, however, Tehran's drive succeeded and re-
sulted in the installation of a fundamentalist, Shia
regime in Baghdad, the Soviets are likely to believe
that an Iranian victory would strengthen clerical rule
in Tehran and make Iran even less susceptible to
Soviet inroads. Increased Iranian self-confidence from
a defeat of Iraq could also embolden the Khomeini
regime to demonstrate its strength by turning against
Iran's Tudeh (Communist) party and possibly increas-
ing support to the Afghan insurgents. Over time, the
Soviets would be likely to use their arms relationship
with Iraq in an attempt to preserve influence in
Baghdad, and would hope that a more friendly regime
would appear in time.
Implications for US Interests
76. US interests generally would be adversely af-
fected by Iran's carrying the fight to Iraqi territory:
- Tehran's success in the war would threaten the
stability of the Gulf regimes.
- The United States would continue to be criticized
by Arab moderates for not doing more to restrain
Iran.
- The war could easily escalate, particularly if the
moderate Arabs intervened on the side of Iraq.
77. There are US interests that would be served by
a cease-fire:
- It would provide opportunities for the West to
gain influence in Iran.
- The danger that an Islamic fundamentalist or a
radical leftist regime would come to power in
Baghdad in the near term would lessen.
- Iraq would turn to rebuilding its economy.
78. On the other hand, a protracted, small-scale,
border conflict, even accompanied by Iranian subver-
sion attempts, could advance some US interests pro-
vided that the conflict remained limited and did not
escalate:
- Egypt's aid to Iraq is facilitating its return to the
Arab world. A cease-fire, however, would reduce
the need for Egypt as the protector of moderate
Arabs against the Iranian threat.
According to an alternative view, there is no assurance
that a protracted conflict between Iran and Iraq would
not escalate. The holder of this view believes, there-
fore, that such a conflict would be a source of
instability in the Gulf region and that continuing
conflict would enhance Soviet opportunities to influ-
ence both Iran and Iraq.'
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79. A major problem for the United States in ally with those of the more radical members of the
nonaligned movement. In the Middle East, it has
responding to the current situation in the Iran-Iraq
sought to associate itself with the Arab rejectionist
war is the search for ways to mitigate Iran's efforts to
export its revolution and to prevent Tehran from front composed of Libya, Algeria, Syria, South Yemen,
drifting toward the Soviets. and the PLO. Elsewhere in the Third World, Tehran's
expansion of economic relations has focused on nearby
80. But the United States and the West in general countries such as Pakistan, Turkey, and India-all of
are confronted with a dilemma in dealing with Iran: which have substantial Muslim, and to some extent
- On the one hand, the West has an interest in the receptive, populations.
continuing free flow of oil and in preventing any 83. A number of factors will serve to check Iran's
growth of Soviet influence in Tehran. These influence, however. As noted earlier, there are signifi-
interests argue for expansion of political and cant strains between Iran and the Arab rejectionists, as
economic ties with Iran where possiblel well as the Soviets, that would ameliorate the danX1
of the radical axis that the Arab moderates so gre2g(l
fear. An effort by Iran to export its own brand of
- On the other hand, to the extent that the Gulf Islamic fundamentalism by force would run up against
Arab states perceive the West to be courting a potentially more powerful movement in Arab na-
Iran-their greatest current threat-their own tionalism. While the future emergence of a charis-
sense of insecurity and isolation will grow. These matic, Pan-Islamic leader might prove to be an
irresistible trend in the region, Khomeini-despite his
states are likely to turn to the West for security
appeal in many countries-is too Shia, too Persian, and
assistance-but Western help to these states
would be viewed in Tehran as hostile and direct- too reactionary to forge an effective regional revolu-
tion against the Sunni establishment and Western
ed against Iran and might spur efforts to replace
influence.
their governments with regimes more properly
Islamic. 84. Moreover, if regional states and the West main-
81. The West-and the United States in particu- tain a low profile in their security arrangements and in
lar-has little leverage to affect the course of events in their response to Iran's successes in the war with Iraq,
the Iranian clerics will begin to lose the specter of an
Iran or to advance Western regional interests with external threat that has proved important in maintain-
Tehran. Indeed, the clerical regime will be unwilling ing their hold on power. In time, economic and
to resume normal relations with the United States for
the foreseeable future. Even though Iran is willing to political pressures in Iran may give rise to a Thermi-
deal period in which the United States might find
deal with some Western nations, it will continue to more attractive options for influencing Iranian policy.
oppose the West and particularly the United States.
This is a longer term hope, however, and in the
82. Because of its antagonism toward the United meantime US interests in the Persian Gulf will con-
States, Tehran's foreign policy positions accord gener- tinue to come under assault.
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1. This document was disseminated by the Directorate of Intelligence. This copy is for the
information and use of the recipient and of persons under his or her jurisdiction on a need-to-
know basis. Additional essential dissemination may be authorized by the following officials
within their respective departments:
a. Director, Bureau of Intelligence and Research, for the Department of State
b. Director, Defense Intelligence Agency, for the Office of the Secretary of Defense
and the organization of the Joint Chiefs of Staff
c. Assistant Chief of Staff for Intelligence, for the Department of the Army
d. Director of Naval Intelligence, for the Department of the Navy
e. Assistant Chief of Staff, Intelligence, for the Department of the Air Force
f. Director of Intelligence, for Headquarters, Marine Corps
g. Deputy Assistant Secretary for International Intelligence Analysis, for the Depart-
ment of Energy
h. Assistant Director, FBI, for the Federal Bureau of Investigation
i. Director of NSA, for the National Security Agency
j. Special Assistant to the Secretary for National Security, for the Department of the
Treasury
k. The Deputy Director for Intelligence for any other Department or Agency
2. This document may be retained, or destroyed in accordance with applicable security
regulations, or returned to the Directorate of Intelligence.
4. The title of this document when used separately from the text is unclassified.
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