Real War (13 page)

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New discoveries of oil in the late 1950s made the supply again seem secure. Oil became so plentiful that in 1960 Exxon cut the price it was willing to pay the oil-producing countries by 14 cents a barrel, an amount that seems minuscule now but was significant then. The oil-producing countries were distraught. Five of them banded together in an organization that got little attention at the time, but has gotten a great deal since: the Organization of Petroleum Exporting Countries.

In its first years OPEC managed to make only a minor impact on prices. At the time of the 1967 Arab-Israeli Six-Day
War OPEC's Arab members declared their first oil embargo against the West. It quickly collapsed, however, when non-Arab producers, led by Iran and Venezuela, filled the gap and those who had attempted the embargo found they were hurting themselves more than anyone else.

But changes were occurring, and the balance soon shifted.

In 1967 the combined oil production of Iran, Iraq, Kuwait, and Saudi Arabia—now the top four producers in OPEC—exceeded that of the United States for the first time. In 1970 U.S. oil production peaked at 11.3 million barrels per day and thereafter began to drop. Europe and Japan were rapidly increasing their oil imports, and U.S. consumption was growing. The buyer's market was turning into a seller's market, and the sellers were getting more wily.

A twenty-seven-year-old firebrand named Muammar el-Qaddafi seized power in Libya in 1969 and began to put pressure on the small oil companies there. He got one producer to break ranks and post a 30-cents-a-barrel price hike. The genie was out of the bottle. The other Libyan producers soon fell in line, and then the other OPEC members matched Qaddafi's price boost and upped the ante in turn. A “leapfrogging” of prices between Libya and the Gulf states had begun.

From World War II until 1970 the price of oil had held fairly constant, rising in 25 years from about $1.45 to $1.80 a barrel. By 1971 the major producers were paying $3.30 for high quality Libyan oil. The OPEC nations were learning to use their muscle, and they enjoyed the exercise.

In the fall of 1973 the West had a stunning, dramatic, and extremely painful lesson in the new realities of the age of oil. Against the backdrop of renewed Arab-Israeli fighting, Arab oil producers in the Middle East declared a selective boycott against consuming countries, including the United States. And OPEC, feeling its strength, decreed a quadrupling in the price of oil. Oil that sold for $3.00 a barrel in September was raised to $5.12 in October, and to $11.65 in December; the same oil
had sold for $1.80 three years earlier. Overnight, the economic structure of the world was turned upside down.

It was made transparently clear that the economies of Western Europe and Japan could be devastated almost as completely by an oil cutoff as they could be by a nuclear attack. It became embarrassingly obvious that the consuming countries had become so dependent on OPEC—and the OPEC governments had assumed so commanding a position in oil decisions—that in the short run, at least, the West was virtually helpless in the face of whatever demands those governments might choose to make. The control over Mideast oil had shifted from the multinational companies to the host countries and statesmanship and restraint on the part of Arab leaders suddenly became the key to Western survival.

Neither the oil companies nor the Western governments could dictate terms to the OPEC countries any longer. The best the Western nations could do was try to persuade the producing nations that their own long-term interests were tied up with those of the West; that if their actions wrecked the Western economies, or destroyed the dollar, or so weakened the West that it could no longer protect their interests as well as its own, then those actions would be ultimately self-defeating.

Some of the leaders of the OPEC nations saw the logic of this argument and were able to restrain their colleagues from taking what might otherwise have been even more drastic measures. But the West had discovered its Achilles' heel. Oil, being so cheap to produce and so versatile to use, had so widely replaced other energy sources that the industrial economies had become dependent on it; and now the sources of oil were no longer secure.

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In the immediate crisis of the 1973 embargo, as factories went dark in Europe, as lines lengthened at gas stations in America, and as prices soared worldwide, most people saw the problem as primarily an economic one. Although the economic impact was serious, however, this was by no means the whole of it. The political and strategic problems the British had referred to twenty years earlier now made themselves evident with a vengeance.

The nations of the Persian Gulf were becoming more powerful—and
enormously rich—but they were also becoming more vulnerable. Britain's withdrawal from “East of Suez” had been announced in 1968 and completed in 1971. When Britain had stated that it could no longer serve as the support for Greece and Turkey, Truman had filled the vacuum thus left in the eastern Mediterranean with U.S. power in order to keep the Soviets out. Now this latest retrenchment threatened to leave another vacuum, which the Soviets would again be only too ready to fill if given the opportunity. In fact, within two months of Britain's January 1968 announcement of its intention to withdraw, the Soviet Union began introducing naval power into the area: a Soviet naval flotilla has been on permanent duty in the Indian Ocean since March 1968.

Unfortunately, this came at a time when outcries against the war in Vietnam raised serious questions about whether the American public would support another major American commitment in a distant trouble spot such as the Persian Gulf.

Rather than replace the British presence with a direct American presence, therefore, the United States chose to rely on local powers, primarily Iran and Saudi Arabia, to provide security for the Gulf, while we assisted by making arms and other supplies available. This “two-pillar policy” worked reasonably well until one of the pillars—Iran—collapsed in 1979.

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In addition to the threat presented by their naval presence, in recent years the Soviets have been converging in a bold pincer movement on the Gulf. They are making two wide flanking movements, trying to sweep in close for the kill, in an attempt to cut the West's oil jugular.

The first pincer came across Africa, up through the Horn, right into the Arabian peninsula. It started in Angola, where the Soviets ferried in more than 15,000 Cubans in order to install the regime of their choice. It continued in Ethiopia, where nearly 20,000 Cubans landed, this time just across the narrow Red Sea from Saudi Arabia. In 1978 the pincer movement swept onto the Arabian peninsula itself as a pro-Soviet group in South Yemen, formerly the British colony of Aden, purged its opponents and soon afterward launched a war on North Yemen, the source of much of Saudi Arabia's labor force and one of its most sensitive national security concerns. In late 1979 terrorist groups, some of them armed and trained in
South Yemen, struck at Saudi Arabia itself when they seized the holiest shrine in Islam, the Grand Mosque at Mecca, in what was apparently an effort to undermine the Saudi regime.

Unopposed in their whirlwind move across Africa and onto the shores of the Arabian peninsula, the Soviets set into motion a second pincer movement from the north. In 1978 a pro-Moscow group seized control of Afghanistan and eagerly accepted Soviet offers of aid. And then, between the pincers, the Shah of Iran was driven from his throne. In the final days of 1979, with the Shah gone, with Pakistan in turmoil and shunned by the United States, the Soviets brazenly moved the Red Army itself into Afghanistan, bringing Russian planes and armor within easy striking range of the narrow entrance to the Persian Gulf.

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Henry Kissinger commented late in 1978 that “one cannot look at what has happened in Afghanistan, Aden, Ethiopia, and Angola and draw a line between these various countries without coming to certain geopolitical conclusions.” A line drawn through these countries passes directly through Saudi Arabia, Iran, the United Arab Emirates, and the Straits of Hormuz, the strategic choke point through which 40 percent of the free world's oil passes—20 million barrels each day, 800,000 barrels every hour. Like a lion stalking its kill, the Soviets are moving closer to their prey. In 1979 Lloyd's of London announced that shipowners sending tankers through the straits would need special war-zone insurance.

The downfall of the Shah was a stunningly ominous event for the remaining monarchs of the Gulf as well as for the countries of the industrial West. After the British withdrew in 1971 Iran had taken their place as the military power that guaranteed stability in the Gulf. On the eve of the British withdrawal Iranian forces occupied the strategically located islands of Abu Musa and Tumbs overlooking the Straits of Hormuz. In 1973 the Shah sent Iranian troops to Oman's Dhofar Province, where Marxist guerrillas supplied by neighboring South Yemen were threatening the Sultan of Oman's regime. The Shah ordered work begun on a naval base at Chah Bahar in Iranian Baluchistan to guard the entrance to the Straits of Hormuz.

In addition to refusing to participate in the Arab oil embargos of 1967 and of 1973, the Shah had continued to recognize Israel, provided oil for our Mediterranean Fleet, and kept Iraq
from playing any significant role in the Yom Kippur War by moving troops to the Iran-Iraq border and by giving covert support to rebellious Kurdish forces, thus tying down the Iraqi Army. During that war his was the only country in the area to prohibit Soviet overflights; he also rushed oil to an American carrier force in the Indian Ocean to keep it in operation. When our allies were asked to send arms to South Vietnam before the Paris accords forbade it, the Shah stripped himself of F-5's to accommodate us.

The Shah provided the muscle that protected the rich but vulnerable Saudis. He settled territorial disputes with Bahrain and Iraq. He encouraged arrangements for regional security with other Gulf states. When the first communist coup in Afghanistan interrupted his efforts, he was wooing that country away from its reliance on the Soviets for military and economic aid.

Now that the Shah's rule is over, all these efforts have ended. And the eventual political direction of that conflict-ridden country—even its continued existence as a unified nation—is uncertain. As former CIA official Cord Meyer put it in early 1979:

 . . . the disintegration of the Iranian army is seen as an accomplished fact that has already caused a seismic shift in the power balance throughout the entire region. For many years, Iran's army served to keep in check Iraqi ambitions against Israel and Kuwait, protected the sultan of Oman against the Dhofar guerrillas armed by South Yemen and reassured Sadat in Egypt and the Saudi princes. A tempting vacuum now yawns where once the Shah's army stood.

When the British left in 1971 only Iran had the trained manpower, the resources, and the will to take over Britain's stabilizing role. With the fall of the Shah, the disintegration of the Iranian Army, massive cutbacks in Iran's military budget, and Iran's descent into chaos, all the forces that the Shah held in check are free to press forward unrestrained. The new Iranian regime has made enemies of its neighbors by pitting Shiite Moslems against Sunni Moslems and reopening territorial disputes the Shah had settled.

The Shah's successors have abandoned work on the Chah
Bahar naval base and canceled most of his billions of dollars of projected arms purchases. Dhofari guerrillas based in South Yemen have vowed to rekindle their attempt to bring down the Sultan of Oman. The Russians have invaded Afghanistan, which they might not have dared do if the Shah were still on his throne, allied with the United States and in control of the once formidable Iranian Army. Pakistan now feels the hot breath of the Russian bear on its own border, and has to expect that the Soviets will soon try to subvert it by encouraging and directing Baluchi and Pushtun rebellions, which could lead to the disintegration of what is left of that country. The whole area is in turmoil and the question on everybody's mind is: Who will replace Iran? Saudi Arabia, with nearly a fourth of the world's known recoverable oil, has a special interest in this question.

Radical Iraq is now the most powerful military force in the Gulf. Its military strength is overwhelming in strictly regional terms. It has 4 armored divisions and 2 mechanized divisions, with over 3,000 Soviet and French tanks and armored fighting vehicles, plus 4 infantry divisions. Even without any further Soviet support, the Iraqis could move with impunity anywhere they decided to: in Kuwait, Saudi Arabia, or Iran.

Iraqi military forces have already been deployed against Kuwait—in 1961 and again in 1973. In the 1961 incident the British and the other Arabs forced the Iraqis to pull their massed troops back from the Kuwait border. In the 1973 incident, however, the Iraqis did not back down, but took some Kuwaiti territory. Iraq has since settled its border differences with Kuwait, but the possibility of future problems remains.

The vast majority of the crude oil reserves in the Persian Gulf are within a few hundred miles of the Iraqi border—in the nearby areas of Iran, Kuwait, Saudi Arabia, and the United Arab Emirates. The payoff for a successful Iraqi move into any one or all of these areas would be an enormous transfer of assets.

Iraq is now making a determined bid for political dominance in the Gulf. Although its leftist authoritarian regime has been anti-American, it does not want to see the Russians establish hegemony in the Gulf, and therefore may become willing to moderate its past stance. We therefore have reason to seek improved relations with Iraq. For their part, the Soviets remain interested in gaining control of Iraq, although the Iraqis have
been vigilant in cutting back the growth of the Iraqi Communist Party. In 1977 and 1978 communist attempts to form party cells in the army were smashed and the organizers executed. Though these attempts failed, the history of faction-ridden Iraq in the last twenty years has included many coups and attempted coups by a variety of groups; the Soviets can be expected to continue trying to increase their influence by any and all means, meanwhile benefiting from Iraq's efforts to pull the rest of the Arab world in a more radical, more anti-Western direction.