NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031200210002-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 15, 2016
• Document Release Date: April 22, 2004
• Sequence Number: 2
• Publication Date: March 24, 1979
• Content Type: REPORT

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ICI Intelligence
National Intelligence Daily
Saturday
24 March 1979
State Dept. review completed
Top Secret
Top Secret
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Pakistan: Election Set . . . . . . . . . . . . 14
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Special Analyses
OPEC: Price Positions . . . . . . . . . . . . 16
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Overnight Reports . . . . . . . . . . . . . . . . . 21
The Overnight Reports, printed on yellow paper as the
final section of the Daily, will often contain materials
that update the Situation Reports and Briefs and
Comments.
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PAKISTAN: Election Set
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President Zia-ul-Haq's announcement yesterday that 25X1
a national election will be held on 17 November is prob-
ably designed, in part at least, to draw attention away
the execution of former Prime Minister Bhutto
Before the election,
is is expected to insist on amendments to the 1973 con-
stitution that will strengthen the power of the president
in relation to that of the prime minister. Zia may also
want to provide for a permanent constitutional role for
the military in Pakistani politics.
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OPEC: Price Positions
The Organization of Petroleum Exporting Countries
is certain to agree at its special ministerial meeting
in Geneva on Monday to charge higher prices for crude
oil in the second quarter than called for under the
price formula it adopted in December.
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charges in the second quarter cou range rom about
$1.20 per barrel--the amount Kuwait and Iraq have imposed
on first-quarter purchases and Venezuela has already an-
nounced it will apply to second-quarter sales--to $3.70 25X1
per barrel, which Algeria now has under consideration.
If OPEC decides formally to adopt a new pricing structure,
it would have to convert its meeting from a consultative
to an extraordinary conference which requires onZ the
approval of a simple majority.
A surcharge of $1.20 per barrel on top of the pre-
viously scheduled increases would bring the second quar-
ter price of OPEC benchmark crude to $15.04 per barrel--
18.4 percent above last year's price. The scheduled
price increases alone--5 percent in first quarter 1979
and 3.8 percent in the second quarter--would have brought
the benchmark price 9 percent above the price at the end
of 1978.
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Consideration of prices beyond the second quarter
is likely to be put off until the cartel's next regularly
scheduled meeting in June.
The Saudi Position 25X1
The Saudis have made no specific commitments con-
cerning their role in the meeting on Monday. On the eve
of Oil Minister Yamani's departure for Geneva, he told
the US Ambassador that the Saudis would continue to push
for price moderation, but he emphasized the strong pres-
sures the Saudis would face from price hawks. Yamani
has indicated that, given current market conditions, the
Saudis--at a minimum--will have to agree to charge
fourth-quarter 1979 prices in the second quarter. This
would result in a price for benchmark crude 14.5 percent
above the 1978 price. 25X1
An official of the National Iranian Oil Company
recently said that the Iranian delegation to the Geneva
meeting does not have a fixed idea of what the future
price of oil should be. He said the Iranians would make
up their minds after hearing the opinion of the cartel's
other members.
Iran has concluded crude export deals for the second
quarter with a number of oil companies. The price, how-
ever, has been left open, with the understanding that it
will be linked to whatever price decision is made at the
meeting on Monday. Iranian officials have indicated
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that, while they will not insist on spot prices for long-
term contracts, they would regard the official OPEC price
as a floor and reserve the option to charge more if the
market warrants. F77 I
Other Members
The strongest pressure for higher oil prices is 25X1
likely to come from the major African producers--
Nigeria, Libya, and Algeria. These states might insist
on applying their own surcharges during the second quar-
ter regardless of what OPEC decides.
Venezuela has already announced that it will charge
a $1.20-per-barrel premium on top of the previously
scheduled second-quarter increase--a move probably de-
signed to prompt other OPEC members to follow suit. The
Indonesian Energy Minister reportedly said recently that
regardless of what is decided at Geneva, Indonesia will
increase its second quarter price by 10 percent rather
than the 3.8 percent originally planned. The United
Arab Emirates and Qatar are likely to push for continua-
tion of a surcharge.
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(The items in the Overnight Reports section have not
been coordinated within the intelligence community.
They are prepared overnight by the Office of Current
Operations with analyst comment where possible from the
production offices of NFAC.)
Hungary - USSR
Contacts of the US Embassy in Budapest tend to
confirm earlier reporting that economic matters were
the prime topic of conversation during Janos Kadar's
recent trip to Moscow. The Hungarians reportedly asked
for long-term commitments of raw material deliveries,
while the Soviets pressed for CEMA integration and
increased Hungarian investment in CEMA projects. Accord-
ing to the Embassy, any significant personnel changes
in the Hungarian cabinet and the Politburo stemming from
the country's mediocre economic performance last year
will be announced at the spring plenum of the Central
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