KUWAIT-IRAN: ON A COLLISION COURSE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T00114R000700340001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 27, 2016
• Document Release Date: March 28, 2012
• Sequence Number: 1
• Publication Date: June 5, 1987
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/05/09: CIA-RDP90T00114R000700340001-4
DATE
DOC NO/61f} ~/~~/
OIR
P & PD
Central Intdligencc Agency
DIRECTORATE OF INTELLIGENCE
5 June 1987
Kuwait-Iran: On a Collision Course
Summary
Iran has apparently concluded that Kuwait's request for
US and Soviet protection of its ships and its continued
support for Iraq pose serious threats to Iranian interests.
Iran has directed its attacks in the Gulf largely against
Kuwaiti shipping, undertaken a campaign of subversion and
sabotage in Kuwait, and increased its hostile rhetoric
against Kuwaiti leaders. Kuwait's main line of defense
against Iranian aggression traditionally has been to avoid
confrontation, but a growing perception that Tehran is
threatening its sovereignty has led to a hardening of
Kuwait's position. Under current circumstances, Kuwait will
continue to seek areas of agreement with Iran, but will
steadfastly refuse to forego its support for Iraq and will
maintain its tough stand on terrorism. If Kuwait remains
defiant, Tehran may increase its pressure on Kuwait with more
ship attacks, increased terrorist activities, and possibly
even an air strike against Kuwaiti oil facilities. Kuwait
This paper was prepared by the Peninsula
Branch, Persian Gulf Division, Office of Near Eastern and South Asian
Analysis. Comments and queries are welcome and may be directed to the
Chief, Persian Gulf Division, NES
NESA M 87-20061
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might be compelled to renounce its tanker protection
arrangements with the US and the USSR if Iran undertook a
sustained campaign of terrorism and airstrikes against
Kuwaiti ships and its oil facilities.
Relations between Kuwait and Iran have deteriorated sharply over the
past year due to increased Iranian attacks on Kuwaiti-bound ships and
Iranian-sponsored subversion in Kuwait brought on, in part, by continued
Kuwaiti support for Iraq. Kuwait's request for Soviet and US protection
for its shipping, the issue of Shia prisoners, and Kuwait's cheating on oil
production quotas have also fueled Tehran's anger.
Sources of Antagonism
As Iraq's militarily weak but generous financial backer, Kuwait has
been singled out as a primary target of Iranian antagonism since the
outbreak of the Iran-Iraq war. Since the start of the war, Kuwait has
provided at least $10 billion in financial assistance to Baghdad and has
allowed massive amounts of military and civilian goods bound for Iraq to
transit Kuwaiti territory. Kuwait's tacit permission to allow Iraqi combat
aircraft to overfly Kuwaiti territory en route to attacks on Iranian ships
and oil targets has infuriated Tehran as well. Kuwait has also given
diplomatic support to Iraq in the United Nations, the Arab League, the
Nonaligned Movement, and the Islamic Conference Organization. Moreover,
Tehran has been irritated by Kuwait's treatment of its Shia population and
its refusal to release Shia prisoners implicated in terrorism. Kuwait's
refusal to grant refuge to Khomeini following his expulsion from Iraq in
1978 has contributed to Tehran's contempt of Kuwaiti leaders.
Iranian aggression toward Kuwait has been demonstrated in several areas
over the past several years.
--Iran has directed the preponderance of more than 200 attacks in the
Gulf against commercial vessels serving Kuwaiti ports, including at
least 60 tankers since it began targeting Persian Gulf shipping in
1984.
--Iran has sponsored numerous terrorist acts by local Shia supporters
intended to destabilize the Kuwaiti government.
Iranian-backed terrorists were responsible for the
bombings of the US and French Embassies in 1983, the car-bomb attack
on the Amir's motorcade in 1985, and a series of explosions at oil
facilities and commercial offices this year.
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--Iran embarked on a heavy-handed, but unsuccessful campaign to disrupt
this year's Islamic Conference held in Kuwait by threatening reprisals
against visiting Arab dignitaries and launching two missiles from Al
Faw at Kuwait. Iran probably also was behind several explosions in
the city of Kuwait and neighboring oilfields shortly after the
conference opened.
--Most recently, Iran has stepped up its public rhetoric against
Kuwait's efforts to seek US and Soviet protection for its shipping and
has warned of retaliation if Kuwait draws the superpowers into the
Gulf.
Kuwait and Iran have long held opposing views on oil production and
pricing policy in OPEC. Iran has traditionally advocated higher prices at
any cost, while Kuwait has held the more moderate position of lower and
more sustainable prices. Although the two camps joined forces at last
year's OPEC meeting, diverging Iranian and Kuwaiti views have resurfaced in
recent months. Iran's efforts to increase oil prices could be an irritant
at this year's OPEC meeting scheduled for June and in bilateral tensions
with Kuwait.
Longstanding mercantile interests between Kuwait and Iran have ensured
that trade between the two countries has remained fairly stable over the
years, despite stormy political relations. Although Kuwaiti exports to
Iran declined from a peak of $260 million in 1980 to only $68 million in
1982, they rose again in 1985 to $204 million. We estimate that trade
levels with Iran remained at about the same level last year. According to
the US Embassy, local exporters of oil and related equipment have found
ways to circumvent the war's disruption of trade by shipping products
through Dubai. In return, Iran has continued its exports of
foodstuffs--primarily pistachios, caviar and dates--to Kuwait.
Handling Tehran's Aggression
Kuwait's main line of defense against Iran has been to avoid
confrontation. In an effort to limit Iranian harassment, Kuwaiti leaders
and the press have generally ignored Tehran's hostile rhetoric. Kuwait has
maintained strict public silence over its support for Iraq and its role as
a transhipment point for Soviet military supplies to Iraq. Kuwait has
vehemently denied Iranian allegations of Kuwaiti collusion in Iraq's
military activities. Although Kuwait has made little effort to stop Iraqi
overflights and has permitted emergency refueling of Iraqi planes, Kuwaiti
leaders probably believe that denials deprive Tehran of an internationally
sanctioned justification for attacking Kuwait.
In contrast to the traditional image of Kuwait as fence-straddling or
capitulationist, the country has hardened its stand against Iran as a
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result of a heightened perception that Tehran is threatening its
sovereignty. The ruling family's legitimacy is largely based on the
country's mercantile tradition rather than ideological positions, fostering
the lack-of-commitment image. To maintain popular support, the royal
family first and foremost must preserve Kuwait's economic integrity.
Kuwaiti leaders have viewed the sustained attacks on Kuwait's vital oil
shipments, the attempted assassination of the Amir in 1985, and Tehran's
public condemnation of Kuwaiti leaders as direct threats to Kuwait's
political and financial survivability. Kuwaiti leaders also are under
considerable Iraqi pressure and believe that any reduction of support to
Baghdad, which continues to maintain territorial claims over Kuwait, would
risk alienating Iraqi leaders.
Kuwait's request for Soviet and US protection of its ships traveling in
the Gulf was an uncharacteristically bold move in defiance of Iran.
Kuwaiti leaders were concerned about increased Iranian attacks on Kuwaiti
shipping and apparently calculated that a more active superpower presence
in the Gulf would deter Tehran from further escalating its attacks. The
Kuwaiti request and US agreement, however, has only increased Iranian
threats that now include warnings of direct Iranian retaliation. Recent
statements by Iranian leaders and media commentary have focused almost
exclusively on the threat to regional security posed by increased
superpower presence in the Gulf and on Kuwait's responsibility for
heightening tensions.
Kuwaiti leaders realize that the country's military forces are no match
for Iran's military strength, and, for the most part, Kuwait has refrained
from responding militarily to Iranian attacks. Nevertheless, Kuwait's
liberal rules of engagement, which allow pilots and air defense commanders
to fire on unidentified aircraft without higher authority, indicate that
Kuwait is prepared to engage Iranian aircraft. Kuwait's military has on at
least two occasions fired missiles on what were believed to be Iranian
aircraft. Kuwait, however, can do little on its own against Iranian ship
attacks.
Domestically, Kuwait's tough response to Iranian-sponsored terrorism
has increased sectarian tensions, posing serious problems for the
government. The US Embassy reports that tensions between Sunnis and Shias
sharpened noticeably following the arrests of 12 Kuwaiti Shias for oilfield
bombings in June 1986 and January 1987. Some local Shias demonstrated
against alleged government torture of the detainees and the confiscation of
cash and ewelr from their families.
_~_We -believe Tehran's repeated warnings to Kuwait about its
treatment of local Shias and Iranian expatriates probably include an
implied threat to exploit these tensions.
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Kuwait has refrained from publicizing Iran's involvement in subversive
activities to help preserve bilateral relations. For example, Kuwaiti
authorities appear to have allowed the four Kuwaiti Shias who sought refuge
in the Iranian Embassy shortly after being charged with the oil field
explosions in January to leave the country, according to the US Embassy.
Kuwaiti leaders probably believed that an assault on the Iranian Embassy or
public exposure of Iran's role in the affair would only exacerbate tensions
and perhaps spark sectarian violence in Kuwait.
The Kuwaiti government has kept diplomatic channels open and active,
despite having recalled its ambassador in Tehran early in the war. Kuwaiti
leaders believe a dialogue is essential to mitigate Iran's hostility, gauge
Iranian intentions in the war, and discuss OPEC oil policy. Kuwait, as
chairman of the Islamic Conference for the next three years, views itself
as a possible mediator in the Iran-Iraq war and hopes to encourage Iranian
responsiveness to peace efforts.
Prospects
Relations between Kuwait and Tehran are likely to remain tense for some
time. Iran will probably attempt to intensify its attacks on Kuwaiti
shipping, increase its support for Shia dissidents in Kuwait, and sponsor
more terrorism against Kuwait. If terrorism fails to change Kuwait's
policies, Tehran probably is prepared to implement existing contingency
plans for limited air attacks against Kuwait, last undertaken in 1981.
Iran may calculate such attacks would not provoke US or Soviet retaliation.
Kuwaiti leaders can ill afford to appease Iran by going easy on
Kuwait's Shia community. Faced with the possibility of increased
Iranian-sponsored subversive activities, Kuwait has little choice but to
continue tough security measures such as deporting Iranian and Shia workers
and removing local Kuwaiti Shias from Jobs in the oilfields, military, and
government institutions
Kuwaiti leaders probably believe Iraq is its only defense against
Iranian expansionism and hope that support from the superpowers will help
deter Iranian attacks. Nonetheless, Kuwait probably realizes it would get
little tangible international support against a more aggressive Iran or
following an Iranian attack. Kuwaiti leaders, therefore, will maintain
their support for Iraq while attempting to avoid further antagonizing Iran.
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--Kuwait will probably play down the trials of Shia terrorists and the
reflagging of Kuwaiti ships.
--Kuwait will continue to project the reflagging venture as a defensive
move and downplay the prospects of increased superpower involvement in
the Persian Gulf.
--Kuwait is unlikely to urge the Gulf Cooperation Council to take a
stronger public stand against Iran or to support superpower
involvement in the Persian Gulf.
Kuwait is unlikely to completely cut off support to Iraq. Kuwaiti
leaders might be compelled to rethink the extent of their support to Iraq,
however, and their turn to the superpowers if Iran undertakes a sustained
and effective campaign of terrorism and subversion coupled with periodic
military strikes that threaten to shut down Kuwait's oil production. In
that event, Kuwait might place conditions on or even restrict Iraqi use of
Kuwaiti airspace. Kuwait could also limit the number of convoys
transporting arms to Iraq through Kuwaiti territory and insist more
shipments be routed through the Saudi port of Yanbu.
Kuwait's mercantile mentality will restrain Kuwaiti leaders from
undertaking actions that might damage long-term commercial relations.
Kuwait almost certainly will try to keep relations healthy enough to profit
from post-war activities. Kuwait recognizes that Iran is a major regional
power that will have considerable political and economic influence in the
region regardless of the war's outcome. Moreover, Kuwait's merchant elite,
an important source of support for the ruling family, relies partly on
trade with Iran, and their support could wane if their business ventures
are frustrated by government. Regardless of who wins the war, Kuwait
would quickly look for ways to exploit the new-found peace, hoping to
benefit economically from post-war recontruction efforts in Iran as well as
Iraq. Kuwaitis probably believe, however, that no significant improvement
in bilateral ties is likely until the current Iranian leadership changes or
the war is over.
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SUBJECT: Kuwait-Iran: On a Collision Course
NESA M 87-20061
Distribution:
1 - Robert B. Oakley, NSC
1 - Edward P. Djerejian, State
1 - Marion V. Creekmore, Jr., State
1 - George S. Harris, State
1 - John Craig, State
1 - Peter Burleigh, State
1 - Edward W. Gnehm, Jr., ISA
1 - Lt. Col. Donald Dubay, JCS, DOD
1 - Roger Pajak, Treasury
1 - DIA
1 - DIR/DCI/DDCI/Exec Staff
1 - DDI
1 - NIO/NESA
1 - NIO/CT
1 - C/PES
1 - C/NID
1 - C/PDB
6 - CPAS/IMC/CB
1 - D/NESA
1 - DD/NESA
1 - C/PPS/NESA
2 - NESA/PPS
1 - C/MESA/SO
1 - C/NESA/IA
1 - C/NESA/AI
8 - NESA/PG
DI/NESA/PG/Pj (3June87)
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