Created: 10/13/1983

OCR scan of the original document, errors are possible

Iran-Iraq Wan Increased Threat to Persian Gulf Oil Exports

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THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS. ThttK-gmnt* crvxx+iohom pattktpohtdin mt prtpanthof el tht tthmore

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Int'i Iraq/.

Iraq'aIn Stopping IranianItmI Attach

Iran'i nraeOon



AtUcfti oo Gulf Oil




Western Europe ind

Economic Impact al Calf Sapph'

Impact cat uWmameJ

Implicatioea lor the Uaated

Impact on the



This Special National Int^lixencr Estimateo the cxnlook fur an abrupt disruption of Persian Gait oil etpoatt dun to eacalatlon ot the Iran-Irao. *vai in the neit year It eta ml net Iraq's motives andfor attacking Iran's nil raport. and Iran's likely response-The impact on work! oil supplies is examined and the Implicatauis for the United States and the USSR This Estimate was reqiir-rted bv th* Department of Energy For more information on Iran, tee. /ran. Outlook for the Islamic Republic.. for infotmatioii on Iraq, sen, Prospect- for Iran,or information on Soviet military rapabllitles In the Persian Coif region, see forthcomingovttt Force, und Oioibiliiiet In (A> Southern Theater of Operation..


Th* seemirigiy endless war wtth Iran and Iraq'i worsening finan-cial problems are forcing Baghdad lo coeuidcr elastic military sncasures-The French sale of five Super Etendard aircraft lo Iraq increases the possibility of an escalation of the Iran-Iraq war that could disrupt Persian Gull oil exports vital to the West Iraq lint will seek to exploit the 'hreat 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 Likelyeries of intermediate escalatory steps to increase the military pressure on Iran

Iraq mightilitary strike if its renewed dtscussJom with Syria on reopening the Iraq-Syria pipeline prove wcecssftjiove would gain Baghdad some financial relief.

We are una hie to conlirmreport' 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-readyonth. France believes the survival of the Iraqi regime is critical to Gulf stability and thatf the aircraft may preeipttaie events lo Iran*s> aaadaasg the war Piaasee's eefceMhwyilitarylso al slake.

next vear France

will deliverq newircraft configured to carry the Ex-ocet missile.esult, even if delivery of ihe Super Etendards is canceled. Iraq probably will gain the same capability to hit tanker Iraffic byinally. Iraq already has Super Freton Micopters armed with Exocet missiles which could be used In desperation to attack tankers, ahhcajgh 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 warmakinst capacity by denying it revenues, to encouragergm negnttonum* to end the war. or. tailing that, to force the West to intervene in the Gulf. If Iran retaliated against other Gulf oil exporters, Baghdad would hope the Western potters would intervene to ensure the safety of all oil exports from the Gulf, including those from Iraq.

Iraq may Intend initially lo use the Super Etendardsefensive deterrent to shieldwould take sixits damaged oil export installations in tho Cutf. 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 oo Tehran for further escalation of the war In theBaghdad 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 byeries of less drastic measures Such actions would be likely to include renewed public warnings to Iran and neutral shipping, bombing raids against Iranian oilKharkincreased attacks agaimt Iranian cities, naval units, and shipping In the Cult. We do not brliese such attacks on Iran would encourage it to nestotlate for peace.

Once Baghdad began using the Super Etendards against oil tankers, we believe itwisdWl sarmal attacks-uJ (lic-ii imwc tu assess Ira-nan and international reaction. Iraq would have difficulty stopping Iranian oil exports for an extended period unless it Is prepared to conduct repeated attains against tanker tiaffic. International oil tankers would stay away from Khark Island initially, hut would he likely loloading at Khark if Itoghdad were unableustain its attacks Moreover. Iran is likely lo reduce its oil prices to offset increased insurance and chartering rates in hopes of eiscoiiraaing shipowners tu continue serving Khark.

We cariaevr Iraq would uaiansaiy its attacks on umkta if the initial

strikes with the Super Etendards did not result in movement either to end the war or lo alleviate Iraq's financial difficulties. Should the Iraqis seriously damage orumber of tankers, they would virtusih shut down Iranian oil exports from Khark Island Repeated Iraqi attacks would make it impussibsV for Iran to entice even cash-starved shipping firms to send their ships to Khark despite substantial price discountsanil.

Given our lack of information on Iranian plans and theprocess in Tehran, we cannot be confident about the nature of Iran's likely military response. Ayatollafa Khomeini has warned pubiicli that Iran will retaliate agaimt all oil shipping In the Gulf il its own oil nririrts are disrupted

We believe lhat Iran will not strike lower Gulf oil target* or close the Strait to oil escorts exceptast resort, and that it probably will take measuredcornm<-nturate with Iraq's phased escabtmn-



Iran has sufficient foreign exchange assets tohort cutoff of oil exports. Moreover, by showing restraint. Tehran would place1 on Iraq the onus of threatening internalinnjl oil shipping. In addition, (ran probably would want to avoid provoking Western militarypart because il has limited capability to defend itselfikely Western military react ion.

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 Culf and destroy the Iranian flevolu-Itvu. Ke might therefore feel oUrgalcd to rapidly escalate Ihe conflict through attacks on Arab oil producers-espttviaJly Saudian attempt lo close shipping, re^rdless of the rxospect of military defeat at the hands of the West.

Notvetheless. we expect some Iranian military response Should Iran retaliate directly against |iaq> j, might try lo bomb lite aiibasehere the Super Etendards were stationed or attack the Iraq-Turkey nil pipcliite. Sliuuld Iran decide to retaliate in lite Cull il wuld choose from several options. Givenapabilities, these are the most likely:

Attack Kuwaiti oil facilities.

Harass shipping in the Culfor the Strait of Horniu*.

Strike the oil .acil'lies of Saudi Arabia.ited Arab Emir-ales. Qatar, or Bahrain.

Ihe Strait of llormtu by mining or blockade.

Iran has some capability to initiale anythese actions andeu MmAsH-chosen targets could do cuiisiderable damage U> Culf oil facilities. However. Iran has little capability lo sustain coercive measures In the Culf or in the Strait in ibe face of Western military op-positkm.

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 Hormu* to allIrani Now is rundkapped by numerous problems, bul il has Ihe capability to close Ihe Culf by mining or blockading as long as Ihe action is not contested by Western navies.

Enouihoil production capacity exists outside the Persian Cutf to absorb the lost of Iranian oil exports and the eflecl of naaleiule damage lo oil facilities in ibe southern Culf Severe damage lo ihe main Saudi facilities or closure of ihe Strait of Hormug.orldwide oil shortage and push up oil prices substantially. The

Impact on oil markets and the extent of damage to the world economy would depend on Ihe 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 Statesarge stake in the crmttnuod flow of oil from the Persian Culf in spite of the fact that US oil imports from the Gulf are small (onlyercent of US oil com amp!ulf oil constitutes aboutercent of oil demand in the non-Communist work)hole,ercent in Western Europe, andercent in Japanof all or most of the source of supplyubstantial period of lime wouldorldwide oil shortfall much greater than that35 The United States could not insulate Itself from lite disruption of the world oil market. In addition, tbe Untied States under the Inleimlional Energy Agency agreement is obligated under certain circumstances to share the burdenupply shortfall. The longer tern Impact would depend on how tbc Persian Culf political am) military ill-mtii-'ii was finatly worked mil.

An Iranian blockade or mining of the Strait of Hormui would impact directly on Oman, whose territory is involved. Oman probably would appeal for Western support, and the other Culf states would nol impedeove. Direct Iranian air, naval, or oomrnarrdo attacks on tho Culf states would produce varyingappeals to Iran for forbearance to requests for Western militaryon the Instsllatton attacked and the number and intensity of tbeSyria and Libya as allies of Iran would be expected to provide in-

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Escalation of military activity in the Gulf would have serious implications lor the United States. We believe the Iranians would attack Western naval ships attempting to break an Iranian blockade or to clear mines from tbe Strait of Hormuz Although Iran knows it could not halt Western intervention, it would feel its credibilityevolutionary slate wat al slake and that, in any case, thewould not invade Iran

The Khomeinio it likely to view even lessei forms of US military interventionhreat to Its interests. We believe, however. Ihat Iran would not call for Soviet assistance, even if the United States directly intervened In the Culf. If the oonfrontition in the Gulf were prorV-'iiged, Iran's altitude toward Sovirl aid would be less certain. Sovitt pressure on Smith Yemeni and Ethiopian leaden to grant base facilities lo counter Ihe United Stales wruld be likely to of US mililary intervention.


The Soviet* would welcome any disruption of Western economies, however short lived, caused by tn interruption of Persian CuH oil exports. They abu could acquire additional hard currency from oil sales. The USSR would try lo capitalizeestern-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 iii the Persian Culf. Moscow would incressje its inldliaence-ttatherinsi efforts in the region as tensions mounted and Soviet naval forces in the area probably also would be augmented- If Western airpower Id [he region were increased, some Sovietair and air defense units in the southernprobably be placed on alert.

Limited Western strikes against Iranian airfields or ports are likely to prompt tbe 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 theyestern threat to invade Iranerging.'

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Iraqi Inability rathert irrSQusrTehran Id nejttulf bu (onhashdad to conaldtr nceWlEi* ihtwith Iran TI* Iii,hav*ahauMad thansatte octioat, hul that an art Bptlnualk these wiltIran rnmiill.nW wia-lr*all tieaien mm that aoatdtad Maan ihe IVraauCarlBe bad at)


1 ferncted haa la* raaluue eaakur. caaaam tor rrr^'x ttr war Dnraar airipreKeUi

ivnm ilv IffM tittv tare* ihra*

coadoptka* wWd dectirvet)rsaiira. Soersdir thranian renncrau tartrfc bivr not pjaafd ibr Ir amain cleanntlr-mcat. and tha curat*at'idlon iboai aa tar of enrilne:irlhtriit Saddam undoubtcdli lean that ih*of attiitknnunreal andlaa Internal problem!raqi drtnaf atliai UritHi rcinrltd uieol mi tfaid aaxnt In ihr var and Hivcrtlrs eaalnst Iranian tit tea


Iwo of taqilhelWnilmmtm ktarlffH

rduclna annual revenue byrt

TVaatSal bit* "ar-reratadt may

reach II bellica tee mmt.S . lhal Iraqi

[oceanenrnri -illVt bUhoa bv th* rad at IfttWIUat bee* leered to dele.It

ed llaM mlorpian MJpphen Iraq; (am* mrnnmm iWk* tka warreact) uniiail

ed US Ita aaaaaUiaaeopaa* ha* lawn tutsaaMiaaV eateid anaoeeti haw beta vharprv reduted

4 Tbe eaatar ol Iraqi lananrial baaal la it* irauffi-rtpney nl "ll ripwi memr* The kmo Feiiim CiiH oil noon termtraihhe hntinntfis ol the -it

Fam-vl-iin ml Utill WMIIItn Kiw Iran3

and rh* cloture ol lha ptpebne anoti Syria ta April IOTIeduced Iraqi olleiport 'kpuittahtuat SO perca-nt Iraq now has onl( one all eiportipeline acnes Tufbrv thaturrenl ihim nfiuui olarrels per lay Ibv'tlT

i On* praneile loiarcr of O'liumie* Iraqi

nieaaiptM al* eapaett ihrouqa Ih* IraqW ISBa*dad and Daaaaara*eum BW laa* Hi lai>ic

I nr*>

bi Slit*.lua SUPPdrvd Iran for' af liar aar SwhaiaMial addilvma) oil ianane aoahl rpduct ihrraq to IMeanfv the In ilienH' ih* Syrianof tbe plpehine *ere opened -there a.pu tadim in Tripoli. Ufa-noB--lraqrarninaa could be intnaml li>GO percent from Ihel ofillion |anuaB>


6 Iraqi objective ll to end the war and kevrvrIt currentlyIn *lo iaiurrM upon the tat>malioui}ibe UhelihooJ af nulitan eacalatlon if ihtaaal Iraqi aoanaaair prattk-aataaI brd CiahilvfprwuleirirliiUi lo lace*awHtMbea to Iraqale* Iraqi Ml Mpehnainoai

itanvqnumii trm*rd foeraralntea Iraqtinpeama iohe Cull* Paarhdad bi mim

rhimi i" drmilnanie liar tjul! Ln iblpniia lo'l llatrvJi.-i|

iiiaau>*tKn< which Traeanmeet Baatidan wanti the Wrti lo end ihr How cf Western areas lo

ban, to Stop our tha una- lnun at .nd lo nrrniire

Iran to I

raq aould prefer to actnmpbh in eoab without milllan ticalalion But. ifnd ihreal fail, we brtirve Iraq will use the Sonar Elenelard nrn.fl aaainat sanaers tnllUHj at Khark Island. Ihe IrminaJ ihrouah which im prrcenl of Irani oil eiports flowurrently aritinq forth ihrooah Its dwlomari


the mic lucfc attack) We eiDrrl (hetoie pceMedIraq mem cron* lo military ewem

S BechoVdi pnmen MnraM forabtwai ehtr cooikcle the French Saper DrmaW fa*Wr eBicrafta* trebleSaddam! rtuatary ad-Bara reconrurarnded thaamet lhal he me the Sooer Flrnderda lo attack oil

khark ' '

They Biaued that altarb on oil tanhon would incrcaje Ihe IhiealWrlr of Ml from the Gulf ihat eventuiUiforce Ihe ueral iiowrry inrfedtns; the Urarmd Saalaa lo laaarven* mihlanly Iraq Iron lhal the Weaker, powen then weaald Jrvn.Uar.arfeae haeieal oeaatt Ik- ihaawahartwaa

9 We ar* aaable to eoafinn pre* matt ttit Franc* haa rfeww-rd theSaiperlead* id airrrafl tohut we hrlleve thai nea if the aircraft haw iwi rel brew ileWveied Iraq eventually will receive

tbem The French have ma to*in

rW-tad own Para vane I! Ulllrat-aadcb Tlardrchoare ole over. Franc* larhrvci theof tk* IracnIi intiral a* Cuff Btabtftcy aad thai tha Mwn el the aircraft mar precipOale event* to Iraqi acrtanune France! rrwafclhtrihtaryho at rtahra

orniKi. even tf ihe Super Eumlard ileal i>

Fl alter all .onlijureJ lo carry

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II. TheSaaaceUU,mr cornealaaoaah ol laew Birtaal TV Into! -heramed or 'he aeerafrFrance

una ofrat paleta After arrt-el In Iran, (he

aircraft ail! be checked mil and final minimi mtaaotu -JI be floor, before the fun operaiiMal mliaten u


lter tIan hacamc CffieralMul Iim mold ewroar In eat ihe rnrcraflWaeai to tbarid rrpaara aa Ii item Band aal eapnet iwOifclaa the Caff Iraq BrataabtV eaaU not rename eatnaa lh* Unit aonarr thanonlha fnmi ihe uulataon cd inuari Iran eouM ua* military anion lo dram*ar inumptlon of oil eiporti bul Iraq ouald then araue thai llwaiuttlflei Iraqi ua* ol the Etendardj aaalnat Iranian oil riporU

rWMarltiit. arlaeluaai braineran of IrraSub acOora coaaH iBchadr renewedto Ira* aad aeatral ahiKin. breatwngIranian oil imtalletioae. and aacn*aed atticai

aaaiaal IranianidiD and ihaniin* in Ihe Calf

Ira*a* the Super Etertaarria to hit.-ml at the Iranian port olchorneynl Such altaeki wuuld providei mmhar eanntanorie Super Klrndardiidini tha Interna tloaal repercmaoni olnker traffic

are wvnal rranarv. wh> the Iiboiia raradaal aireoach their dBaracBrearatthe Beaawrdi and then?atmiili iha* aai hailli aaliml Iof iDwrrina nBirLatioB etieni and ihn deair*ncrldorraallc aehon Webelieve Mih iliacki on Iran willeace

Iroq'l Opltom lor Slcrppinci Iruriionporli

can arlke in ibree wayi at IraadanIm* Khark iilaad

aaaaawa, ptaatinayenricae ftatmn* oa

Daatrovnki. ptprlixri.loadrem prrantj on Khark

Attach tanker) tryvM to load al Khark.

raginion mainlandir hkelt lo be tneifeetli* CravUi -nuld keen the oil 'Wine; al rati wnB aboverrent

portl *fI The eahr mainland

UrrjrCaovid deflruy to mineram Khart aaaaaliranali wowU be ihead iheyhme Ba he rtrvck frpeeWdK brreaaarm euly rttaatwi

IT. AllackMa Khark Uiuidnoptaon Ie* ihe Iraoii beeaaae ol lh* rMaalaalair.tail loom and ihe complr iit> ofiihathe lequued Khark ub. HAWK nil faceanti-

aircraft guna To dale, I'M ha*ir force tactics to avoid tosses Commando attach* roiildhlv effective agitna Khark or asarjciitcdlerisittes. but (hn would be ntfcv and would he out of character lor the lr*qtt However, attack) on Khark ibeH would have the [ropjunda value of deraonu ruling to world cmUloo that, before artackirui raoieei. Iraq had eilumted all other military optiott!

IB. The Iraqis have th* capabilitylack tank en carthm at Khark bland even without the Super Eten-darrk Super Frekm hdieopten armed with EaocetjIn the Irani Inventory have th* ranee- to teach Khark Island, but Ihe Iraqij reportedly beweve their do* ipeed makes them too vulnerable The hrlicop-reri have been uard againo merchant shipping clean to the Iraqi mainland Smtained. Interoeraid) hy Irani aircraft could h* effective In kcrptnj tankera away from Khark. but would be out of eharatler for thelnmla.

IA The tlmpticatr and rebtrrery low it* of uain* the Super Eirrrdtrd make rt the mart h'kety weapon the Iraqis would useut Iranian oil etpn-rt To eniurr that only ihiia cwlltii* al Khirk are Brock. Iraq would hive to hat them al or near the island To mtnimiie the lisk of eratourMlitri Iranian air defemes or lighter aircraft. Iraq peoeobry would at tempi first

lo Sink tankers near khark but not at the island itselfanfcii or ard ok cot slueOaJine. joint at Khark might be more eJleetlve because il could

Elrmdard could eaeeai* web attacka from outude the rarer* o( Khark Mind'i HAWK mission

r.rci ol Iraqi Attacks

nce RaikdUd brum uarng the Super Den-dardt agatrut nil linkers, ar brlleue il will conduct wveral attacks and then pauar to anesi Iranian and international reaction Iraq would have difficulty ccmpletely Hopping lurjn oilor an eitend-td period uole*repared to conduct repealed attacks against tanker traffic. Several reliable louices tuggevl that Ira-ertvtlhmal oil tankrn would stay away from Khark Uhod iwislh But rnenr- Unkers are likely In reuame kudiaa at Khark unlet. iSaabdad announce* itdeteimtraed tr> Hop banian oil esporta aad continues Ihe attach Moreover. Iran is likely to reduce ill oil pnen to cdliet increurd insurance and

<ttarterial rate* in hooe* of encouraatnato continue serving Khark

aafsdadikely lo marmily in al tacksll the initial strike) with the Supernut result to. movement either to end ihe war orHi Irrmncavl daffieullie. Stabaeuuenllikely to be supported by other airhould the IraqSS coatinue damerrlnrclinkers, they would virloill. ahut downtanker traffic to and from Kharkthat repeated Iraqi attacks,

coupledblv- announcement by Bag "dadrttrnded to stop oil eaporti from Khark Island, would make it inipeaufclentice even cash-starved sMpctng lirms to 'end Heir ihip. lo Khark deuriteprice discounts oa Iranian cel.

Iron'i Reaction

iven our lack of information oo Iranian olio* and on ihe dreisinnmilire prareu in Tehran.cirmo! be oonfidrrr! ibms the nature of Iran's likely military levoony Since the Irani-French Super Eten-dard dealte osnne. iriuor Iranian oMtcals. Including AyatoDah Krwmveim. have warred repeatedly thai Tehran -ouarj close Use Cilf if Iranian cd eiporti were Unporrerl The Itaiaani abo have informedull cdMiddle FaUern imero-memi. that Tehran would Utack Wevlrro oilin ihe Culf and block ihe Strait of Hoi mm aa


everal farton sutsrest however, that (ratirrnporu. rnore lately would be graduated and depend on the rifectlrenesa uf the Iraqiillion in foreum eichinaeeduces ihe ecu-norolc need for Tehran to retaliate uuicklv Bvivsttainl. Tehran .vwkl ariur that Iraq is the real threat lo latemallonal nilhereby attempting toift brt-rert Iran and a. Westernabraibc Irarann remome lo Iraqi attackarare the potsvtMhtyestern militarygalrot which Iran cook) not adequately defend Furthermore, am Iranian closure of the Culf could Ircpardire Irani own seaborne eaporls and imports

f anlernational tankers Uor-oed servina Khark Iiland. Iran alio mtshl be able to continue eipeelin*


ercent erf lit inrrrnt level of rapt-It To achieve ihit II loolcl loadhapi at Khark and

ram on Iron) ihrrrrn at anchor

Bam ihr rout been and til. oatncV the rata* of ttr Super Dandard Iran dad that le th*ata af ihr -ar aaadaha* a* mmp at -aat.i aaaaV lenlett .oald br rai-nmok- aa attack la iddnaii. latafaaa trttniaath at Srfrl aaa) La*aa Maada at tan ootrt aaaat of ikr rarajr nf iW Super Meadaed lac ca*hw


Sonmiatfary -ii

rror Ut oprralioaa aaalnalt-ti in

the Middle Eaitille |riHt|rt wCporlrd hy Iran

hate threatened publicly to carry ool iwh attack) if the Super Randardi are delivered

bcaaon Mill I. ,

Striking Iroe,

l to Uanb ihe airhaar abrrr ihr Suoe*

E'r-iia-d. air ala'yaaal at attach th* hao-Tuahra

tanebne The Super kiradardi are likely to br bated at axnathrra bag*aain ranar of

an.'allrhe hnm: Airri haa bara awtTectrv*atlarllt oa

Irani aMoaarv andbelieve baabe unable le. Jeorm the Suuet EtrnaUrJi on tS- mwad

Zt Atucktonlhr lurklih pipeline could be carded

Iranian comniandia.ramaii al retail All known ubctigr lo Ih* pipeline duaUia ihe air rau occurred

la Tiiihry Bui am allaakit ban wuuld

harm Iranian TurlluSn or hkrlt lo deter Tehran II Iranian tupuly linn ib-mia* Ihe Cultthreatened Turkey would become even mof* napor-laat to Irantanaai point Ire tur-*et Al twe believert Iranian attack on the pipelineliaa> Daaaaan la Ihr pipeline ibeff -oafd raineeanpaeanlo Iraqiona bet-ate weal type*daw-wcoalJ heepaired Oaaaaqri!enodidwaetam the nu- memalK are-ell defended

Should Iran deodr i.f.i aretkrty

Attack Ku-atti oil faclliliei

Haran ihipi tervirni Iraqi Calf alHet

Sink* oil fa> itm ol Bahrain, the ttuted Arabatar. or Saudi Arabia

CW the Strait of Hikriui by minina o* blockade

he lardliaeti In Tehran probably woulda miliary trtponie ol tone kind, retard Im ot whether Iraq wai able loIranian oil eiport) Irani choke and llmlnttetaliatory option aould br Inllueortd by Iraqi mtcet* ia ditruptina Iranian Oilwn miliiary tipatuliiy. and iti percept ion of the likely political and economic repet-cusateen Tbe Iranian* will try lo Inflict ihe mailannni (iamair on Iraq while unna the illtaticn to -taken the lopport of Ihr Cull Arab* for Baahdid Iran abo will try to avoidihrretrit to intetvrne in ihe CuH. Tehran would feat thatreated Wcttern :Miliary pretencehe Cuff tunld become pernunerri ind matbt directlybr nyiOW whileIrani domltiancehr- Cullnult. ae would eipect Irani initial miBlary tewnrue to be at ihr lower end of the etcelatctycumple. an attachr Torkiihtiil* on

Kuwait "ll 'aelllrlH.arnrrnlkt

.'Ml On tin other band,anoot fully rub mienonte br Iran lo rawdly and folly inlate ihe Cub* conjhet through iHacb on

cloture ol the CaU. Kbonveini hai Item believed lhal Iraq otUinaiy attacked Iranool ofirebrnf in lintriiy lire iianian flevnlinion He may weD believe thatffort io draw ihe Weat into tbe Gulf it ihr lofieal lokninatioA nfa Wetlern ilraleay aad lhat tbe ulluute conirooiilion vHlh WeHera "imperUlttrn- in th* CoK auuH br in*t. Khon-Snl may UUeve thii. although Iran woold

iry naval anqaateom in ihe Cult, ihe

Iranian ftrvt*jt.on mull br upheld and Irani poalkm in ddradinj Ihe bfamic world frotnf unborn will in the lone run be vrndicaled.


an hat the tapabilitt to hirin ihipi wrvine ihe Calfnd lha Cult cotantriet -ould be rehictanl to chaUenre Iran Iranian alrcralt and thin*


already monitor tiiipping ihroegh lha Cult IhcNavy unild board thlpi or force (farm lo go lobbai for March or detent icei of IheI ft alrcrafl ilalloned alhfcai would provide enver lor Iranian naval ahlpt openlma there and abo could haiaaa ihiyjirtg However, n* thU activity too* place In Cmanjhe Otnano night

obliged to lake sicnr act in to counter It.

Ptrorlrnt Khamenei in latelo "reatrirl" dripping In the Cult IfGulf ttaiaa continued lo allow their porta tofor tbe delivery ca* anna to Iran Theo the only country deliver Inato Gulf porta, aad Kuwait It theHretrve liartan bkxhade.could multoviet*Iranian confronlarion

Attoekl on rtuveoit

on Ku-aitdemonarateto retaliate and directly involve IraqiEarly in the war limitedKuwait with little mlcrMlwnal react mo Theon Ku.-Unot afire- oil cipurtiArabiahe VAf ar. lone ai th* mllHarvuiuikety to ipreadull. Tehranbetievri that the great pmn would not rnteivene

*ho would hope lhat other Cufblame Baghdad for mil ing militaryIhreateoed their iccurUy.


Attocki onocilihei

f Iraa were abb lo reduce the flow of oil Irom Khark lubvtantially. ban would be lorced io brain draoing down fmenn eicfaraieo meet rurtrot leveii of impuruv' ftrntoe-Urationi in irtajor Iranian ritiei thii rummer, partly over poor rcouoaiicuggnl thai major Import reduction* would be politically ruiy. Iran tint rad aught conitdtr more dint* retaliatoryuth ai attacking oil facili-tie* in tht*leans the Strut of llorznur

H attack ere another or-tton Even Saudi Arabia, -hkh bu lb* target* Ur force of any ArabHate imrr table It MuU nrl rod Ut time lotorn* Iranian (arbtn-boiruSm from attacking criticaltreiaft probablycony out there atlacb ath-ode. tttttii bovnba ote nuntlea. Into, bower, could not xntain an air ratnpthtn aaal rat Saudi Arabla't ertttea) oil lutein once the element ofone

CW. ol tho

Iran hai ibe ent-tttlityhe Cull by mining or bfeefcade ast rti aolicirinot conlmted by Wmtirn natter. Wc doubt thai ibt CtaV Malm would engag" Ira* on their oan. oerot perbap> (hurt, through whine water* two mainrh pan Oman dori have Jaguar atrcrall with Brituh [dot* and wtne nuittle boati within range of the Strut of Hramur. bat probabiv could mt ttop Iran lium du^iw the Strait

Iran could attempt to interdict or eiociaur tar Strait tone It* three dMrovcn, lour (nutlet and ID rmailr patrol boalt- hlanv ol the wr-poio onlilpt are notI. bul they could tntirnidatr unarmed tanam and the navVri of the Other Co" itaiet Inn abo hai lighter aircraft at two rmrby alrbaan to backlockade. Long naval and air facet lo clot* the Golf uould allow Iran to continue iu own trobornn tWiimentv at leatt tf mpora.'lly.

n Iranian de>claiathin lhat the Strait hador not ihit werebe sufficient to deter rneot oil ahippinairanot al leastime. Iran hatIn Id inventory and. although it does notcipntUc tonphutkatod minefield, itof brie* mine* randomly Iran mat havemanyavd mint* from NorthIran wobabl> abo hat

tcm* World War ll-rrnlage Brtiiiri contact mine* and reportedlye*viagoan Lrbyu

he Strait of llormui it difficult to onne beejiur ol itt depth, utdih and itroose Mlaule. however, that only IS minat lead rovertly In lie mua thlpptr* channel probably would dunagc al kail one trap tun**Ing the channel within the lintoaii.indred mine*ould be rroinred to nunc the enlir* aavteaMe width of the Strait effeetivery. We lore Iranian miiwiavins capa-tnllnet are urocphii^faird- Minn probably aculd be Laidimlmlely.

ft Wot emm :aoold be required to clear the Strait France ia wudering redepioimenttae-

T.Ok I

PeraM Calf Air aad Nana! Order of Bank



' forte Id ihe area. Saudi Arabia and Iraq have mtnej-eepm but their ciewi arc poorly turned. Th*f lime required lo iweeej th* Strait depewt* on the Ivp* of miner laid, ihe tire of the areanupecSrd of bring mioed.ariety ofctors but -reha could be required to iwrepairow channel through the cenlral portion of the Stiall.

Irn^erverScmol flrreKtien Arob Oulf Stole*

he Gulf Anba, In our lurtgnteat. are unlikely

-.ilirrej. tun crrcept when directly attacked.ihe Gulf liatm wouldrtreoooudvkniiliriei ind look to the Wetl tohey oil nrccamlte that Iran Hraottra, them lout term security prcWerm anditrondy prefer lo avoid idiom ihat mishtlunararaure fur leturc iWaiUiion

to. fceci Iraciaa aa. nival, or commando ittacki o* the CulfwruM produce varying renr-riaw from apprabraa lee frxhearaaee lo requests fee Western militaryoa the country and inv.allaiion attacked and tke number and

mienutv ol arlarki Th*ah Mala* daftrr in

their> io ecu per ale militarily with IbeStale* If under attack, these Hates, wilh the cnuitlr oeeptKm of Kuwaat. would allow US forces acves lo iheirklt ar purli Oiron acoeriplUeallv ml pratneally removed from the Arab-liiaell dlusute.

th* tinned Slain Kuwait, hostarge rewdent PaleS in tan population andould be ihe mon reluctant lo ccarperate militarily wilh the United Stales.

our lucigmrnt. Saudi At.bie-Ihe- ait reaoureo mailer rnoal lo ihe Unitedimmr-JiateN- reek US mililaryIf iti

or territory were attacked by Iranattacked, we brbevr Saudi Arabia. Oman,would be wiBirur, to alow the Unitedin their faeilitin and In permit USto be launched from their territoryIranian threat

Weateeo Europe ond Jopo-

iarope vould lo-ik to the lolledlake the lead In any military imcvaaeryof Culf oil eiportj. Only France aridated Kinidcan couldgmf leant cc*Urtbulion to Western military opcraiioru in ihe am. aitbouah both aoald prefer that the Allies head off eacaaWtou of ihe Iran-Iraq war through dipSornatlc efforU Both are himoreover, by other current out-of-arraudtrta support idsorce Bi Lebonon Th* French Navy In rjawtrcular probably would find rt difficult to deploy nrtalanlial force) to the Indua Ocean now.

f the Unimd Stale* took direct military action, the French probably would loin but would inilil on tnainUmlrm tootoan US Policy and reader-Alp French forces In theground and air uniu in Dsvbowti ai well as navalat rvurnul peacetime level*


C S t

heuifiMiincludim Tmkey. would trad ikru rupport to US 4iaaurraaUc rfloru to molvr ihe (ran Howm*.brhev* lhal. thorlan* mJrtaii thenar ta than own veracity tha Turk* would be careened to tka aat of ibru (aribron by US aaoafi taaaaad ta Prmea Caff oea^eirom Tnrkseh aaaaannnutility onn rf tba cat updoa Irani Ing nrrta dtarcttv attached b* Irrta.

M If the United StaM uWlded to aaa tore* to rrepeii the Strati. Tokyo Mold tuabobfv efter tt kraal tacit weeurt Stronaj public hack inn by Japan woakj of lik rly to depend on whether Saadi Arafat and Oman uiupnrltd US rnalllary Intervention and US

ictwrj weir the mlntmii rmruiv eopen ibe

Snail. Ibli rondtikm wouM br teraourd by the facl Ikala faced witb Iba Iota of atiitou Iwo-tkardt of Hi oil attime nfcna tk* world oil market aoald be rapidly tirdneni-a

Ecm-toaik Unrpocl of CuH Supply

SS The xwpait of any darapton of Cuif cal ownthr aear leaaa wnwh* dreead moa importantlyp**ur>o* af ike etaaalwai andtade uf Ike linruplaa In IrMa'in ike inaract aoald depend of cautnr. aa me artaal dwraHn of II* drnpran.nd petro-fcmn uukpdn The cur rem ianbin*IMn of <urphn puduct..eandd allorift indct-tritliaed eountriei CQIUldenble proterlion aaaimt a

wiplui capaoly lhal could ulftelluppli

Hindi alulltonbat onlyf tlatuUtd*iu? Car- "See Ubfe I)

St) II onhere dlarwplrd. th*

ik pad would br minimal lot mar (owunm Vnplu*

Jahirtt naffieval ta *banrb thr lor* nf

Iranian rtporta can*MirI Uhud

Spt pnaei Mndd braan i* rar. hawnet. if hwieranciter ^iiaJata at ihr coolhct Al a

rwrraiiii uf Iran uuuld Ie lonrd to line

lternativeT erect Somb. and flary rety

on Iraraun all foral It prn-ni1 needy

and Irani"aatOanli forrrcrm il lapanrve cal

ST If Kharkand were rirul down, the Iraqi pipeline Ihrouah Turkey wvrtei) and Kunaill viporti

Table Z





Gall lUm



Toai .




Tipsir 11

en' off.illion Vd of errierMbe fcat.

ellrninillns tncal rtrapha capacity In the currentand teaoil-unportina couMriesigh ink situation Aith-niah ollur Per urn Culf produeeri alOne could replace these knt wppliri b) increailna produe-trin. tin- n c* length ol a

^^afyff&^fJ^s* ^tA^ V^

certaliyly cauie an mcreaie In ipot oil prket Amcnit major iraportinartiil and Turkey rely on linpom tromd Kuwait for more lhanf their oil tapplaea. Whether price Iracreaiei linabkr would depend lartrty on market perceptlom and the krmlh and imerily of the


he liiiled Suln lunaaige Hale in the continued flow of ml from ihe Persian Culf In spate cd tht fact thai US oil Unporli Irern ihe Culf are lanaDerctnt of US oil conwmptlool CuM oil coruiiiuin abouterceni ol the non-fJommuniu uorld'iLail year abuulcrivat of Western Earope'i andercent of lapaoi oil needs came from Fenian CuH countriei Denial of all or most ct the wurceolvumtaolial cericdc miuJIetUwide oil uVrtaae much onki than9 Price* would tht in-hn The teonomlc recovery

c 5


the developed countrir* would be interrupted. Oil imported among the leaouniriei ibo wuuld be hurt. irdbility to tit'icr ferritin debt girallv red nerd. The Uniled State* could not insulate itself (men Ihe ditr option el tbe world oil Battel, itobligated under ihr Intrrnalional Energy Agency acrertneot under certain eircurostioer> to thare In the burden of an* lupply sholfrdl. The lonfler teen unpact would depend on how ihe reman CuV poun-eel and military wtoalion waa finally worked oa*.

Irnpoct on th* International FlnneKrOIe believe that riling prioniior

prolorigrd inlrrrupllon ol pemin Culf oil cipoeti

would Kate leverr rrpe reunion! on lie trrlrrnilVtetalem. which already I* ttratnrd bv the paymenti problein* of the lev developed rrinMrlrl The Initial od price ihocfc would br denrbilutrat. particularly for that* banking cenirn aad count tin with hadi expojor io LDCi tbit do not eiprc* as! TbeInduMriiliied count "en would be faced with the Draper, of lull lledBtd recetiioni IMF tunrjj would be ir jdnjiiate to handle ilie new larje loan reouciK

on-Gulf OPEC member, and noa-OPEC oil orodueeri wouM benefit nvM from the Major Of ECteh ai VenciurJi and i

would move from large foreign retrrvet drfioili tn

Iraq and Oman could eipert-eoce. financialfrom the cfesure of the Strati ai kaai a* Iheir overland pipeliota coorinoed to funcuon The otheriT eiporten couM aJuorb tcssei over the short

* behave many non-oil-produrlt* LOO would face im-irnau.-itable finaltclil ptobJrml Banks would be reluctant to grant loam and ridk nmtpavoenl of debit Some ofGt would be likely to turn to Ihc Untied State* for funding' and Iradertbip io hand ling iheir enm

Implkatiom for tho United StOtM

wakmonof mibtnryave arriooi tmpllcalioiit for ihe United State*ini on the teverily of the threat lo od eiporti. the Culfesternnd fapan are likely to Pfeu Waahimiion lo inletvene mihtarily or through diplomacy to were the problem The United Statu hai liltle diplomatic leverage? met Iran and nonr over

Iran US military intervention, it required, aold push any hope of US-Iranian reJaifant far into Ihe fu

63believe Iran would attach Wntcm naval drip* attempting lo break aa Iranian navalblock*dec* lo dear ml on from the Strait of Hotrautous it cannot itsh Wetlern intervention but wouldits credibilityevoluliorairy state was at nakc and that, in any rue. the Writ would not invade Iran

he Khomeiniikely lo view even fcraaer (orran of US miliiaiy intervrntkairect threat to iti intemii The regime probably wdl try to further unite tbe popuLilKin agaimt the United Stain and to mcreave iu invective agalnil ihr Wen. We believe, hrnrover. thai Iran aould not rat!Soviet utrtlanee. even If th* United State* directly inter-venrd in the Culf. At knit initially the regime would depend on at own metre and perception of Itielf at

God-protected If Ih* mafnatation were rnraWgrd

iiiluuV toward Soviet aaJ avufd be Staa cirlaUli.

Tehtas prcbiWy will chore*k* at tkw United State* through increased terroriun The Irani-ant might mount more operations agaimt ihe US Marine* or other target; in Lebanonho could

be etfetedaider allotting I'S

airhoet worklwirle

n the poutlve nde. evalilKm would tendtetnJoror- IS cflortl todefenw planning bet-wen the United Sate* and the Arab CuH Bale*S aaaawvavadaataaattataat mmila

Ihc threat. US Handing among the Arabi thole hrnrile io revdatkrnary Iran would he rnliincad

6T- US Itwerventlon would alto have negativecoionitience* In ihe region Soviet prcuurc on South Tenvrri and Ethiopiin leaden In grant base facilrtiei to ronntrf the United Stale* would be likely to Inornate, la addition, if the Culf Main price, .ed US rnlnvrntion a* dni^ipiniurqitrv in-dealing piopecuS-Sovirt cortfioraUtkin in the Peruan Cull, ihe* would br reluctant lo purine cfcor atiociaiion -Mh US defrnte pUnniug

ver ihe long run.i call lo od cipoitietult of the air will uarnofy pfforti by CuH oillo develop plant fm allrraule nil eapiiet roulet lhal biiuvi the Strati of Horrnar. For Iran ihrt nwam ptpelinei to tbe Cull of Oman, for Arab rxeducert



lii liidn*in ihr IM Sea. or


Import on tho USSJt

t* Soviet! wJd wrtroawdrwurXton offlua Kowrvtv irwtraurd by id iMrcraption el Imu Culf cd tivorb. ll would crateaa in! Mm lh* Wm and rI. Thard Wortf ar tr*r

hr thr rnn'mfi nil rinhMi itr

rnaitrt Ib roe/raff.liuaea, and Sonet ilkaCanape i'aid ba safey inchcutoff Tri* Smwti mid acquire additional hud currency lima al uln al iMcrwr pticB and could ondannwalaim toetiabfe cneiTV iu&oUm ami ihr rooduty ouoorralion

TO till . Iht SovMti aoald welcome time

lnnrCiU. UWtixt^Mlbli faaffrll end to

any escalation ol IwatiMtea Hi lh* <M.he fiabtinalo leod ii anUS prnrna Thr Soryrtaaflrdad la Ihr ban bag -araa craaUd fdcUan mmarea* tain la beta br&arfrori sad

hwlng haatl mtttH Kadna Arafc waaai

-ralebat -Mbd Stater, Tk Smteti might hr tt ranted io try rnrdirlwl. Ihr Iran eonfhelbnrdnU would prahabtvany rtfort lo end lh* war. hulouhJ probably rtjerl Soviet mediaflM loAt mo tiemtwyntlktna at lh* L'niml Stain wat nol Deceived ai (ba main lnuhci

Tl The Sovird wuukl leekirinlate Iran's pee

diramml Rilo lai mardInflurnir In Tehran

Hitt*orahlf would nlfrt lo trtl Tehran more araii and ptthapa rnn oiler lo augment Iranian awut iuch (Aim ara unilkrly Io nnrninSoviet-Iranian dilirrrncra Mcacow would rrv lohe advene effect ihn wmild have on Id rrnlioray- ihat Hi aidaa In mpaaa*S threat

hr USSH would Inaanatlypeaunda about tht US and Western thnral to iha Cul Motcow taMhl wr3 rriToat Breahnrvi caQ lor aa iraemalkirialoa CuM tarunty TV USSR would caattooViralem altacki la an allmca lo lake nrrk

la ORwaliaa H'nirm atlacki oa Iranian lerrCory.

Ti Thr USSRbr co-rwrwdVtoeyaa uV tmrntm CJfvonhi avriajr allatrvrwwWaa irraaona iBumrd. and Sowan aaaal> lh. araa rnvbabf. ahn would be

aanl II Mawain awpurrr in ihr it%*ai warerrrwi^ily aad aw

drlrerv uraU In hSa anuthMn USSH-would be phjeed oa im '

Tl LaUtadKiikn aaa>ml Iraaun air-firidi ot porb are Itkafr lo paornpl Mcacmr bah lo

Ihrami ihr WrM lo inn

ibetr attack) and lo warnini oiaadiro;BreihaHv dad In Noxmbcr ISTS The SavieU probabh would alto- -IbrWnilieuuu and raoynd luim in military dmrkii borilenrny ihivirl irrft+rtri wifMrweaim ihrral lo Invadr Iran rmnml

r itvramVmiwMn-

Original document.

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