RESTRICTED FLOW OF IRANIAN OIL TO SYRIA IS LATEST SIGN OF TENSION BETWEEN ALLIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000403060002-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: February 9, 2012
• Sequence Number: 2
• Publication Date: May 23, 1986
• Content Type: OPEN SOURCE

STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/02/09: CIA-RDP90-00965R000403060002-0
ARTICLE APPEARED 23 May 1986
ON PAGE 9d
INTERNATIONAL
Restricted Flow of Iranian Oil to Syria
Is Latest Sign of Tension Between Allies
By Youss&F M. IBRAHIM
Staff Reporter of THE WALL STREET JOURNAL
Iran has stopped most of its deliveries
of cheap oil to Syria in the past few weeks,
a sign of growing tensions that threaten to
split the most radical and anti-Western co-
alition in the Mideast.
Differences between the two countries
over the activities of Iran n anon,
Syria's warmer relations with Jordan, and
intellieence contacts between Iraq and
are awin at the four- ear old alli-
ance according to Arab and estern gov-
ernment officials. While the erences
aren't likely to cause Syria to shift sides in
the almost six-year-old Iran-Iraq war, they
have clearly impaired the relationship.
"There are many reasons to think the
alliance isn't in such a good shape," says
Ghassan Salameh, a political-science pro-
fessor at the American University in Bei-
rut. "They are diverging on political strat-
egies in Lebanon and in the Gulf re-
gion."
Oil Deliveries Curtailed
The most glaring sign of change in di-
rection is Iran's action on the oil deliver-
ies. Its supply of cheap oil to President Ha-
fez al-Assad's regime was a pillar of the
March 1982 economic accord that ce-
mented political relations between the two
countries. That led to a wider political and
strategic pact, including Iran's May 1984
agreement to defer payment of $1 billion
owed by Syria for previous oil deliveries.
The cutoff comes as Syria is in a severe
economic downturn. Despite a $700 million
cash infusion from Saudi Arabia earlier
this year, Syria's hard-currency reserves
are down to "not more than $50 million,"
according to David Mizrahi, editor of Mid-
East Report, a New York-based financial
newsletter. Syria, Mr. Mizrahi says, has
also accumulated foreign debt of $3.5 bil-
lion, while its occupation army in Lebanon
costs it $300,000 a day.
As a result, Syria is scrambling for
much of the 120,000 barrels of oil it used to
get each day on concessionary terms from
Iran. It is reported by the Middle East
Economic Survey, an oil-trade newsletter,
to have approached Saudi Arabia and Ku-
wait for "assistance to compensate for the
reduction in deliveries from Iran."
James Placke, a Washington-based in-
ternational-affairs consultant and former
deputy assistant secretary of state for Per-
sian Gulf affairs, calls the oil cutoff "a sig-
policies in Lebanon. They are expected to
voice their views to a Syrian delegation
due in Tehran soon.
Although Iranian oil-export facilities
have been battered by Iraqi war planes in
the past year, industry sources say the
country has kept its oil production steady
at about 1.8 million barrels a day. Thus,
analysts say, the overwhelming motivation
for the Iranian oil cutoff is political arm-
twisting meant to dissuade President As-
sad from flirting with new allies.
Experts say part of Syria's change of
attitude has to do with its new focus on im-
proving relations with Jordan. Also, sev-
eral secretive negotiations this year at the
Syria-Iraq border between representatives
of both countries have annoyed the Iran-
ians, sources say.
' In those talks, Iraqi diplomats say, Iraq
told Syria that it wasn't interested in bar-
gaining over the reopening of the Kirkuk-
Banias pipeline that once carried Iraqi
crude exports through Syrian territory to a
Lebanese Mediterranean port. The April
1982 closure of that pipeline was the Syrian
quid pro quo to Iran for its bargain-price
oil supplies. The Iraqis don't need the pipe-
line any more; they have built or ex-
panded pipelines via Saudi Arabia and
Turkey, thus removing an important Syr-
ian negotiating card.
Experts say all this doesn't add up to a
rupture of relations between Iran and
Syria, but as Mr. Placke, the foreign-af-
fairs consultant, notes, "it certainly consti-
tutes a change" in the tone of what was
once a warm relationship.
nificant change in Iranian-Syrian rela-
tions." He says it reflects wider differ-
ences between the two countries, particu-
larly over policy in Lebanon. "They have
been on a collision course there," he
says.
Iran is meeting with increasing Syrian
resistance to its continuing attempts to ex-
pand its influence among the substantial
Shiite Moslem minority in Lebanon and to
direct its own Lebanese militia and the
Party of God (Hezbollah) adherents in the
Bekaa Valley. "The Syrian army (which
occupies the Bekaa) is now restraining
their influence physically," says Prof. Sa-
lameh. That has caused deep resentment
in Iran, which previously could move men
freely in the valley.
Other differences over Lebanon include
Iran's advocacy of an Islamic state in Leb-
anon and a more-confrontational attitude
toward Israel by Shiite militias in southern
Lebanon.
Diplomatic sources say Syria fears such
policies will increase the danger of war
with Israel and further weaken its control
over Lebanon.
Arab government sources also say
Syria was deeply annoyed at the successful
assault mounted by Iranian troops against
Iraq's Fao peninsula earlier this year. The
occupation of the port city of Fao, near the
Kuwait border, followed assurances ex-
tended by Syria to Saudi Arabia and Ku-
wait that Iran wouldn't threaten the Per-
sian Gulf region. "Now the Kuwaitis can
stay up at night listening to Iranian guns
on their borders," notes one Arab oil min-
ister.
Damascus Policies Criticized
Battered by falling oil prices, Iran, for
its part, is eager to recoup the money it
is owed by Syria. Iranian parliament depu-
ties, who must approve any resumption of
oil supplies, have been critical of Syrian
Declassified in Part - Sanitized Copy Approved for Release 2012/02/09: CIA-RDP90-00965R000403060002-0