PERSIAN GULF

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81B00401R002500160002-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 15, 2016
• Document Release Date: December 18, 2003
• Sequence Number: 2
• Publication Date: April 5, 1977
• Content Type: REPORT

Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET
April 5, 1977
Persian Gulf
I. Each of the major oil-producing powers of the Persian
Gulf--Iran, Iraq, Saudi Arabia--has a unique view of
its role in regional affairs.
A. The Shah is seeking to extend Iranian influellpe
throughout the Gulf, in order to gain recognition
that Iran is the dominant power.
1. Over the past several years, particularly
since the British withdrawal from the Gulf
in 1971, the Shah has been using his ,growing
military and economic powe to assert Iran's
interests in the region.
2. Among the primary goals of his foreign
and defense policies is to prevent radical
governments from coming to power in the
area. He also wants to diminish the
in-
fluence of external powers, especially
the Soviet Union.
B. Despite Iran's intention to play a leadership
role in the Gulf and to secure the oil lanes,
it confronts many restraints-
_
SECRET/
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
. ?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET,
1. The population of the southern shores of
the Gulf is Arab; this means that unilateral
Iranian military action there would draw an
angry response from the Arab world and in-
vite violent reaction from Iraq.
2. The Shah would also have to worry about
a Soviet response if Iran made a unilateral
move against one of its neighbors.
3. The Shah recognizes his own petroleum
industry is highly vulnerable to counter-
attack, and he is uncertain about the
battle worthiness of his army, untested
in multi-brigade operations.
The radical Arab regime in Baghdad has its
of how the Gulf should develop politically, one that
own view
feeds the suspicions of the Shah and the conservative
Arabs about Iraqi intentions.
A. The revolutionary Baathist--Arab Socialist--
regime, whose key figures are President Bakr
and strongman Saddam Husayn, in recent years
has tried to break out of its diplomatic
isolation.
SECRET
-2-
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
. ?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET/
B. But Baghdad's close ties with Moscow and its
thinly disguised contempt for monarchical
regimes leaves the Shah and the conservative
Arabs under no illusions about Iraq's political
orientation.
C. The Iran-Iraq agreement of March 1975 was
intended to resolve long-standing border
differences that had produced a number of
clashes during the previous year.
1. In return for ending its support of Iraqi
Kurdish rebels, Iran got its way over the
disputed boundary between the two countries.
2. Despite the facade of good will, however,
the attitude of each country toward the
other is marked by distrust and competi-
tion. Iran and Iraq are natural competitors
in the Gulf.
a. They are the most populous states;
each is rich in natural resources
and has a large well-equipped army;
and both governments aspire to
regional leadership.
-3-
SECRET,
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
. ?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET/
Saudi Arabia, dwarfed militarily by Iran and Iraq,
is determined to preserve__ itsaphere_of_ influen.ce
on the Arab side of the Persian Gulf.
A. The Saudis would come to the aid of one of
the smaller Gulf states if it were threatened
by a coup attempt staged by local radicals,
or even one sponsored by Iraq.
B. Non-Arab Iran is Saudi Arabia's natural
competitor in the Gulf, but relations are in
reasonably good shape at present.
1. The Shah considers Saudi Arabia's present
leaders, King Khalid and Prince Fahd,
more modern, pragmatic and flexible than
King Faysal, who was assassinated in 1975.
Both Iran and Saudi Arabia want stability
in the Gulf, and both want to curb the
mischief-making potential of Iraq and
South Yemen.
2. But the Saudis have lingering Aoubts about
Ixanian goals-in the Gulc--particularly
after the Shah leaves the scene.
-4-
SECRET,
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
. ?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET/
IV. The other five states--Kuwait, Bahrain Qatar, the
. ,
,
United Arab Emirates, and pman--
25X6
A. Saudi leadership of the Gulf Arabs is generally
acknowledged by the countries involved,
B. The smaller Gulf Arab states see political and
economic advantage in exploiting the rivalry
of their more powerful neighbors.
V. Although the ambitions of the major littoral states
often bring them into conflict, there are several
factors which argue for tolerance, if not total
cooperation.
A. Each is economically dependent on one resource,
oil. pia revenues accounted for 99 percent of
Saudi Arabia's. total export revenuer, 98 per-
cent of Iraq's, and 97 percent of Iran's in
1976.
B. Each regime is using oil revenues to finance
ambitious development programs, aimed in part
at preventing future social dissidence.
SECRET,
Approved
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25X6
25X6
25
25
25
? ?
Approved For Release 2004/01r ? CIA-RI-PRI R110401R002500160002-9
SECRET 25
C. To each, the Persian Gulf is thetrapsportation
,route--for oil, principally--to and from world
markets. Attempts to restrict navigation
through the Strait of Hormuz could strangle the
economy of the entire region.
D. Iran, Saudi Arabia, and the smaller Gulf states
all advocate a policy of limiting foreign mili-
tary presence.
1. The Shah believes Moscow has long-range
plans to extend Soviet naval power in
the Indian Ocean to the Persian Gulf.
Both the Iranian and the Saudi policies
ILLEGIB
opposing the presence of military forces
from outside the Gulf are 4med primarily,
at Moscow. ?
a. Riyadh's stand is in line with the
Kingdom's traditional antipathy for
Communism, which it sees as the enemy
of Islam.
2. The reluctance of Bahrain to renew the
US Navy Navy Middle East Force stationing
agreement--scheduled to expire in June--
-6-
SECRETA
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
? -
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET/
illustrates local sensitivity to the
foreign military presence issue.
25X6
E. Iraq has a more tolerant view of foreign mili-
tary presence in the area, at least with respect
to the Soviet Union.
1. Iraq continues to rely on Soviet military
advisers and technicians?an estimated
?1?1Q0n-to train and equip its armed
forces. The Soviets do not have baqe
rights inIra but Baghdad provides
limited use of its port facilities to
Soviet naval units.
SECRET,
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
X1
. ?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET,
VI. Sources of conflict--some new, some rooted in tradition--
surface from time to time, placing strains on political
relations among the major Gulf powers.
A. Saudi Arabia on the one hand and Iraq and Iran
on the other--all members of OPEC--are pursuing
divergent objectives in setting the price of oil.
1. Riyadh has long been the leader_ in calling
for price moderation. The Saudis, unlike
most other OPEC members, have enough oil
wealth--in their coffers and under their
sands--to regard their oil more in political
than in economic terms.
2. Iran and Iraq are pushing for higher prices
to finance their ambitious development
programs.
B. On several occasions, the Saudis have used quiet
pressure to maintain a price freeze or to moderate
price increases.
-8-
Approved For Release52pahOpir.-e0401R002500160002-9
25
25
Approved For Release 2004/01120 : CIA RDP81600401R002500160002-9
SECRET 25
C. The clash of interests on oil pricing could
spill over into political relations between
Iran and Saudi Arabia.
1. The Saudis ignore criticism of their oil
price stand from the Iraqis, with whom
Riyadh shares few political interests,
but they attach some weight to criticism
from the Shah, with whom they have a
common concern for stability in the Gulf.
2. The Shah's censure of the Saudi attempt to
hold down the price of petroleum has been
aimed at Oil Minister Yamani, but the
quarrel could become much sharper if the
Shah began to direct his attacks toward
Prince Fahd or King Khalid.
a. The Shah feels deceived by Fahd, whom
he has regarded as the driving force
in strengthening relations between
Tehran and Riyadh.
-9-
SECRET/
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25X
25
Approved For Release 2004/0100 ? CIA-RI-PRI 10401 R002500160002-9
SECRET/ 25
25X
3. %Iran has adjusted to the oil price split;
to date its revenues have not been cut as
much as expected, although it has been
forced to cut back on some programs, in-
cluding military.
4. The dispute between the two opposing OPEC
factions on the price issue could flare up
-
again at the OPEC meeting in July.
a. If the Saudis again insist on a price
freeze or a minimal increase, the
Shah may see this as a threat to
Iran's national interests.
b. The Shah's reaction and the degree
of strain on Saudi-Iranian relations
would to a great extent depend on the
level of Iran's oil revenues and the
world demand for oil at mid-year.
SECRET
-10-
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
. ?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET,
VII. Iran's sizable arms purchases and ongoing military
programs fuel Arab distrust of the Persians.
A. The Iranian buildup was prompted by the depar-
ture of British forces in 1971.
1. Between 1970 and 1976,, Iran increased the
number of personnel in the military by_
one-third, doubled the size of its tank
force, and more than doubled its inventory
of fighter aircraft.
B. The expansion of Iran's arsenal has been a major
stimulus to the military buildup in Iraq.
1. A series of border clashes with Iran in
1974 and 1975, and Iranian support for the
Kurdish rebels, added urgency to Baghdad's
efforts to modernize its forces.
2. Iraq purchased $1.6 billion worth of mili-
tary equipment--about half from the Soviet
Union and Eastern Europe--to continue ex-
panding its armed forces.
3. We expect military competition between the
two countries to continue regardless of
improved relations since the end of
Kurdish fighting in 1975.
-11 -
SECRET,'
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
20 : CIA-RDP81B0
Approved For Release?pffpli
0401R002500160002-9 25
C. At present, Iraql_s,armer-1.f orces- compare- favorably
with Irans, although the Shah's military establishment
has received more publicity.
1. While the Iranian ground forces are larger, both
countries have nearly equal numbers of men and
tanks in combat units.
2. The IKAg_i___army-i-s----more---mob?-1-e, while the Iranian
artillery force_is_larger.
3. The size of the air forces is about equal, but
Iran has a clear edge -manpower, training, and
-
qq,a).ity_Qf_PC1141Pment.
4. Iraq's navy is no match for that of,Iran,, which has
become the major naval for in the area,since the
withdrawal of the British in 1971.
D. Saudi Arabia also has begun a more modest program to
modernize its armed forces, but the Saudis are motivated
more by the Arab-Israeli dispute than by their rivalry
with Iran.
E. The Shah has demonstrated a willingness to intervene
unilaterally on the Arab side of the Gulf in pursuit
of Iranian interests.
1. In 1971, immediately after the 3ritish
withdrawal from the Gulf, Iranian forces
seized three islands near the Stait of
Hormuz held by the Gulf sheikdoms in order
-12-
SECRET/
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
Approved For Release 2004/01n ? CIA-R11PRIF100401R002500160002-9
SECRET 25
to deny the islands to terrorists who might
want to operate against Iranian shipping.
2. The Shah also has sent troops to Oman, on
the other side of the Strait of Hormuz, to
assist the Sultan in quelling a decade-long
rebellion.
a. At the request of the Sultan, a small
Iranian special forces unit was sent
to Dhofar Province in 1972 to fight
leftist rebels supported by South
Yemen. Iranian troop strength in Oman
peaked at about 3,800 in 1975, and
dropped to about 1,000 in January
this year.
b. Iranian military presence on the
Arab peninsula has been a source of
friction between Iran and the Arab
states.
25X6
-13-
SECRET/
25X1
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
? ?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET
VIII. The Shah's aborted effort to gain support for a
,- -
regional security pact underlines the fact that the
objectives of the three major powers are irreconcilable.
_ ? _. _ _ _
A. The Shah has been virtually the only advocate of
a comprehensive, multilateral security pact for
the Gulf region.
B. The presence of Iraq at last November's Persian
Gulf foreign ministers' meeting on regional
security assured its failure.
1. Iraqi diplomacy is aimed at blocking any
regional formula that limits the movement
of ships through the Strait of Hormuz.
2. Iraq believes that Iran could ultimately
use such restrictions against Iraq and its
patron, the USSR.
C.
Iran, supported by Oman,
Gulf
tary
1.
takes the position the
is a closed sea from which foreign mill-
,
powers must be excluded.
In Law of the Sea negotiations,
Iran and
Oman support the restrictive principle of
"innocent passage" for the Strait of
Hormuz, while Iraq supports the principle
of "free navigation."
-14-
SECRE1
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
?
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET,
D. The political
accord between Iran and Iraq in
1975 encouraged the Shah to believe progress
on a regional security pact was possible.
1. Subsequent developments have convinced
him that a pact is not now attainable.
Bilateral ties, like those developed be-
tween Iran and Oman, offer an alternative
way of employing Iran's power in the
region.
IX. Iraq, even though it has mended its fences diplomatically
with its neighbors, is still regarded as the principal
threat to regional stability by the area's conserva-
tive regimes.
A. Baghdad has not curtailed its support for local
radical, subversive groups throughout the Gulf.
Its support, mainly financial, is channeled
through Iraqi embassies.
B. For the past four years, Iraq has been pressing
Kuwai unsuccessfully to accept its terms for a
border settlement.
1. Baghdad's main objective is to
of two Kuwaiti islands--Warbah
-15-
SECRET,
25X1
gain control
and Bubiyan--
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
SECRET/
that flank the approaches of Iraq's important
Persian Gulf port of Umm Qasr.
-
C. The Iraqis have staged a number of border
incidents--the most recent, last fall?to
pressure Kuwait into making concessions to
Baghdad on the border issue.
1. Baghdad continues to,occupy a_small strip
of Kuwaiti territory on the border seized
in 1973.
D. The border at present is quiet, and we believe
Baghdad will not take the risks inherent in
openly attacking Kuwait.
1. There is some concern, however, that a
renewal of border incidents staged by
Iraq could trigger a wider conflict,
perhaps with the intervention of Iran
on the side of Kuwait.
2. In such a conflict, Saudi Arabia could do
little militarily, although it would try
to rally Arab opinion against Baghdad.
-1A -
SECRET/
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25
25
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
Adriatic Sea
Bari AI
32
Black Sea
Iraq se
Kuwait
ks control of
islands
iflop
S sun
nto
cur
Batumi
Nasiriyah
rabzon Kars.
eninakan
Yerevan
So.S.R. 0,a1d2500
Abada
C:3
Shatt
aIAtab
.0
PI
arta
Kayseri
Ydin Denizli
al ya
Diy
Tabriz
Astara
Caspian
Sea
? URUS
Mers"
Silifk
Iraq.
Saudi Arabia
Neutral Zo e
Kuwait
Saudi Arabia
AI
BANGHAzi
Darnah
Tobruk
50 Kilometers
ake
rmia
Rasht
Iskenderu
Antioc
Lataki
Famagusta
Al Has
Ar Ra
MT5
Kirkuk
Hamadan
55
Tripor
Leba
BEIRUT
Sido
Tyr
Haifa
Isra
Tel Aviv-Yafo
Hirns Syria
D
Qom
Kaanan
KAN-,
Ast-IT
BIT ianci
DAMASCUS
AGHDA
Esfahan
Karbala'
Al Hillah
Ad Divra I
a1r0h
Alexandri
Bandar
'Abbas
Al Jagh
Al Jizah
MMAN
d Se
rdan
an
AhvAz
AN NAFCJD
An Nasiriy
See inset At Ba*ra
Treh-Y
Hengam
Wan)
Gloat Quoin I. Little\\I
/
12 nautical / (Oman)... Quoin 1.
LiMit?..:1,44torsarffail%1 \
/
mpusenanindsajei \
Oeshm
(Iran)
otizoirr e o
Qeshm
Jazireh-ye,ri
Larak f \
(Iran)
/
Strait/ of \I
?
61-6? imo1\
Al 'Irq
Rat ha'
SINAI
'Abbas
See inset
Kuhesta
?
WESTERN
Al Bawiti
Al Minya
-4:-.?.:;? A Ghurdaq
Sharm
rash Shayk
MID
Dhahra
A
DESERT
Buraydah
. palkha
Gulf Of Oman
1151
Al Kharijah
Al Jawf
liarad
n A
imah Gulf 1?
I of
/ Oman
alive
Scale 1 2,500,000
o 15 aOMila
Aswan brig
Lake
Nasser
Juddah
Dunqunab
As Sulaysili
Karmah
NUBIAN
Abe Hamad
Dunqulah
Middle East
DESERT
Road Railroad
Albarah
4-`
Area of Rebel Activity;
et since December 1975.
Al Masrirati
Salatah
Populated places
O Over 1,000,000
@ 500,000 to 1,000,000
o 100,000 to 500,000
? Under 100,000
National capitals shown in capital letters
SCALE 114200,000
100 200 300 400
Statute Miles
100 200 300 400
Kilometers
Shandf
AMA UT
Kassal
RTUM
RTOUM)
Keren
Agordat
Tessenei
Yemen
SAWA
($a `51
Asmera
Al Iludaydah
AI Mukalla
Mocha
Adi rat
Al Fashir
dd
Al Ubayyid
annar
Nyala
Lake
Tana
Gonder
Names and boundary representation
are not necessarily authoritative
B ' Dar Dose.
572613 4-77
pprove or
e ease
Ahwar
DEN i Oi
all
$ the Bender
n d II OSUaTs1 C 5
l
41.4 Hordio
A Zeila Ma 56
Spellings of Filace names are those approved
Berber lt by the U.S. Board on Geo raphic Names.
81 0401R002500160002-9
25X1 Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
Next 2 Page(s) In Document Exempt
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
Estimated Life of Petroleum Reserves
at 1976 Level of Production
Years
Country
Kuwait '
89
Saudi Arabia
54
Iraq
46
Oman
45
U.A.E.
44
Qatar
34
Iran
29
Bahrain
14
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
25X1 Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9
Next 1 Page(s) In Document Exempt
Approved For Release 2004/01/20 : CIA-RDP81600401R002500160002-9