NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031300060002-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: April 5, 2004
• Sequence Number: 2
• Publication Date: April 7, 1979
• Content Type: REPORT

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Intelligence
#9-
National Intelligence Daily
Saturday
7 April 1979
State Dept. review completed
Top Secret
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Briefs and Comments
Iran: Oil Exports and Prices. . . . . . . . . . 2
USSR-Afghanistan: Soviet Military Delegation.
Special Analysis
Egypt: Arab Economic Sanctions. . . . . . . . . 14
Overnight Reports . . . . . . . . . . . . . . . . . . 17
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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BRIEFS AND COMMENTS
IRAN: Oil Exports and Prices
Iranian crude oil exports have picked up sharpol-
Zowing the short lull observed earlier in the week.?-
The US Embassy reports that Japanese companies--and
probably others--are lifting Iranian crude without a firm
price. Contracts for exports beginning in this quarter
were negotiated with upper limits of $17 per barrel for
Iranian light and $16.50 for Iranian heavy crude. Iranian
oil officials agreed in Geneva to a surcharge of $1.20
per barrel above the official Organization of Petroleum
Exporting Countries benchmark price, which would imply
prices of $15.85 per barrel for light crude and $15.45
for heavy. The Japanese believe the Iranians will in-
crease the surcharge to about $1.80 per barrel.
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The National Iranian Oil Company announced on
Thursday that Iranian output has reached 3 million bar-
rels per day--only a slight increase over late March
levels. The National Iranian Oil Company still needs to 25X1
raise output another half million barrels per day to
meet its current ex Dort co
requirements.
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USSR-AFGHANISTAN: Soviet Military Delegation
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The arrival in Afghanistan on Thursday of General
Yepishev, the ranking political-military general in the
USSR, indicates that Moscow wants a close reading of the
reliability and capability of the Afghan armed forces be-
fore deciding on what to do next in supporting the gov-
ernment of President Taraki. Yepishev is accompanied by
an imposing delegation, including five other "political"
generals. Over the past 10 years, he has rarely traveled
outside of Warsaw Pact countries.
Yepishev's journey suggests increased concern for
the well-being of Soviet advisers in Afghanistan, in
view of Afghan Army defections to the opposition and of
Soviet casualties in Afghanistan.
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Soviet advisers were e principa tar-
get or enrage mobs in Herat last month and as many as
20 may have been killed. The Soviets are aware that
they have long been the least popular foreigners in Af-
ghanistan. One constraint on more visible Soviet mili-
tary support for Taraki in the cities is the popular
reaction it might provoke.
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EGYPT: Arab Economic Sanctions
moment, Egypt's foreign payments situation appears strong
enouah to do without the Arab balance-of-payments support
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The sanctions against Egypt adopted at the recent
Arab League meeting in Baghdad clearly apply to new ex-
tensions of aid, but the language of the resolutions
leaves some room for differing interpretations on the
permissibility of fulfilling past commitments. For the 25X1
that has been crucial in past years.
More than half of Egypt's economic aid from Arab
states between 1974 and 1978 came from consortia with
Saudi Arabia, Kuwait, the United Arab Emirates, and
Qatar shouldering almost all of the burden. Economic
aid totaling about $1.2 billion annually between 1974
and 1978 was for general balance-of-payments support,
while an average of $550 million a year in the same per- 25X1
iod was provided to finance Egyptian military purchases.
Less than 5 percent of Arab aid flows during these years
was used for project assistance.
Egypt After the Baghdad Meeting
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Any cutoff of economic aid would come at a time
when outstanding Arab commitments to Egypt are at a low 25X1
point and Egypt's need for untied balance-of-payments
der-I ined to -the 1 the 1973
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The favorable trend in Egypt's foreign payments
situation probably will continue this year. Projections
made before the recent oil price hike indicate Egypt
needed only $450 million in special balance-of-payments
financing. The recent oil price hike should add at least
$100 million in earnings, bringing Egyptian needs down
to $350 million, which is manageable. 25X1
Worker remittances will not be affected directly by
the sanctions. The Arab states pointedly aimed their ac-25X1
t
d
no
tions at the government of President Sadat an
against the Egyptian people. The Arab states placed no
ir earnings.
th
e
restrictions on Egyptian workers or
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While the Arab states did not take any sanctions
against travel to Egypt, the number of Arab tourists
going to Egypt is likely to fall. Any decline in Arab
tourism, however, will at least partially be made up by
increased numbers of European, American, and Israeli
tourists.
Arab pique over future Egyptian oil sales to Israel
apparently prompted the call for an Arab oil embargo on
Egypt. These countries, however, do not sell crude oil
or products to Egypt. 25X1
The trade sanctions against Egypt are limited to
Egyptian firms that deal with Israel. This will make
Egyptian firms chary of establishing business ties with
Israel; in any event, they were expected to move slowly
until the durability of the peace agreements became
clear.
If the Arab states should fail to provide aid flows,
Cairo would be forced to examine how it would handle any
future foreign payments difficulties. Egypt's practice
has been to maintain minimal official foreign exchange
reserves--currently equal to about one month of imports--
because oil-rich neighbors were expected to rescue Egypt
if problems developed. Without the Arab financial back-
stop,-Cairo may want to increase its reserve holdings.
Such a move would come at a time when the Egyptian Gov-
ernment would like to increase imports of basic consumer
products to meet long-held Egyptian expectations that
peace will lead to an improved standard of living. Faced
with the political risk associated with cutting imports,
Cairo is likely to look to the US and other non-Arab aid
donors for additional help if future foreign payments
difficulties arise.
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OVERNIGHT REPORTS
(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.)
Nigeria
According to a Western press service, the chief
economist for the Nigerian National Petroleum Corpora-
tion said recently that Nigerian oil production prob-
ably will fall later this year some 50,000 to 200,000
ll-time record of
barrels per day from its current a
about 2.5 million barrels per day.
--continued
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USSR-China
A Pravda article today by I. Aleksandrov--whose name
has in the past signaled high-level approval of state-
ments on China--that deals with China's abrogation of
the Sino-Soviet friendship treaty reasserts the rejection
of Beijing's action made in the official Kremlin response
on 4 April. In an effort to gain propaganda mileage,
Aleksandrov reviews the assistance Moscow gave the Chi-
nese from the signing of the treaty in 1950 until the
"incredible turn" in Chinese policy in the late 1950s.
Aleksandrov puts all the blame for the current poor state
of bilateral relations on Beijing's shoulders.
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Top Secret
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