Washington Report, May 28, 1984, Page 4

Iran-Iraq War: The Fallout

A Widening of the War

Since shortly after the war began in September, 1980, there has often been spillover beyond the borders of Iran and Iraq. On two occasions, for example, Iran bombed Kuwaiti oil installations, announcing later that the raids were mistakes. In addition, Iraq attacked more than 60 ships, most of them from countries not involved in the war, in the period from May, 1981, to early May of this year, in an effort to cut Iran off from its oil revenues and from its sources of supply.

Beginning on May 13, however, the spillover took on a new and more dangerous dimension.

On that day, Iranian planes struck at shipping for the first time and unlike previous actions by Iraq, the Iranian strike was made well south of the generally recognized Iran-Iraq "war zone," against a Kuwaiti-owned oil tanker just off Bahrain. This was followed by several more Iranian attacks south of the war zone and by a series of new Iraqi raids, as the situation escalated.

Iraq's expressed intention to continue its offensive was challenged by the speaker of Iran's parliament with these words: "Either the gulf will be safe for all, or it will be safe for none."

The Repercussions in Gulf and U.S.

The attacks by Iran drew a quick condemnation from the Arab countries of the Gulf, who indicated that they would move to protect shipping in the waterway. Iran's moves were also denounced by the U.S. Administration, whose officials reiterated the long-standing U.S. position that it would not permit the waterway to be blocked.

The extent to which these views would lead to cooperation between the U.S. and the Gulf countries was unclear, however. The Administration declared its readiness to provide active military help, provided it was requested by the Gulf states but no such request was forthcoming. One reason for the reluctance of the Gulf states is that they believe the current situation is one that they can handle themselves. Another is that they are embarrassed politically at having too close an association with the U.S., which is regarded in the area as having established a more intimate and supportive relationship with Israel than at any time in the past.

Saudi Arabia is regarded by many Western experts as already having the best-equipped airforce in the Gulf, with top-notch pilots trained in the U.S. It has about 175 combat aircraft, including 42 modern, U.S.built F-15s (which can outperform Iran's F-4s), as well as F-5Es and F-5Fs and some British Lightnings, along with four AWACS surveillance planes on loan from the U.S.

The American military presence in the area now consists of a flagship, a guided-missile destroyer and four frigates in the Gulf itself and an aircraft carrier task force just beyond the Gulf in the northern Arabian Sea. The force includes the carrier Kitty Hawk with its battle group of F-14, 6-E and A-7 jets accompanied by two destroyers, two frigates, one cruiser and a supply ship.

Bigger Worries About Oil

About 7.5 million barrels of oil pass through the Gulf each day—nearly 20 percent of the world's supply of imported oil. Although the U.S. depends on this oil for only three percent of its needs, it accounts for 35 percent of France's, 39 percent of Spain's, 46 percent of Italy's, and 64 percent of Japan's.

Most analysts believe that even a total cut-off of this oil would not cause immediate supply problems for these and other countries, because world reserves are high. Japan and Europe have enough oil in storage to last up to four months if they continue to use it at their current rates. The U.S. has 400 million barrels of oil in its strategic petroleum reserve, which the Energy Department has said would be available for drawing down quickly if needed. Saudi Arabia is said to have as much as 70 million barrels of oil afloat in tankers at sea.

In addition to all this, about four million barrels of oil per day could probably be made up by non-Gulf countries which are producing under capacity: such as Mexico, Nigeria, and Libya.

The big danger, however, is that prices could rise as oil-short countries scramble to get oil before extra capacity has been brought into production. Panic could also play a factor, if the crisis lasts too long.

Most scenarios widely published in the past have predicted that an oil cut-off would come as a result of Iran's closing of the Strait of Hormuz. But most experts consider Iran incapable of doing this, and a more likely prospect is a continuation of Iranian and Iraqi harrassment of shipping to the point where the fear of harm to crews and rising insurance rates—which have already tripled during May and may still be going up—would combine to keep shippers out of the Gulf.