Iran-Iraq conflict threatens Gulf's oil-producing areas

The suddenly raging conflict between Iraq and Iran is visible and violent confirmation of the shift in the region's balance of power triggered by the fall of the Shah.

Gone are the days when the once-mighty Iranian land, sea, and air forces could parade as the policemen of the Gulf. The Ayatollah-led revolution has seen to that.

Instead, Iraqi forces, propelled by an explosive mixture of motives, appeared Sept. 23 to be gaining an at least tentative upper hand. Westerners on the spot reported that the Iraqis bombed and shelled the major Iranian oil refinery at Abadan, setting it alight; the Iraqis themselves claimed their ground forces were surrounding Abadan and another major Iranian oil center, Khorramshahr.

But as the Iraqi troops and jets reportedly advanced into Iran's vital oil-producing and refining areas, two wider risks were uppermost in the minds of many Western war- watchers:

* Could the fighting be brought under control before it did serious damage to Western oil supplies, roughly half of which flow from the Gulf out through the Strait of Hormuz?

* If the fighting did not die down soon, how great was the danger that outside states -- other Arabs, the Soviet Union, the United States -- might be drawn in?

Anxious American watchers had another, in some cases very personal, concern: Would the conflict accelerate or slow down the long-hoped-for release of the 52 american hostages in Iran?

Western logic might suggest that the Iranians would do well to release the hostages in an attempt to reverse the American embargo that deprives them of much-needed spare parts for their US-supplied weaponry. But the Iranian's decision Sept. 23 to "freeze" consideration of the hostage issue for the time being suggests that their fear of alleged US-Iraqi collusion has proved an even more potent, if irrational, factor. And the militants were reported by Radio Tehran to have moved the hostages to new, secret hideouts.

For the past year the industrialized world has learned to live without most of what used to be Iran's 5 million barrels per day oil exports. The Western recession has cushioned the blow as the Iranian oil outflow has trickled down to Roughly half a million bpd.

But even with the recession, any reduction or loss of Iraq's 3 million bpd output (should it be seriously damaged by, for instance, Iranian air action) would quickly end the current glut of oil on international markets. Tehran Radio was claiming Sept. 23 that its jets had struck a variety of targets inside Iraq. The Iraqis themselves reported Iranian air attacks on several of their cities including the nation's two largest, Baghdad and Basra.

Worse still would be the result of any spread of the conflict to the Strait of Hormuz. Not only would this imperil virtually all of Saudi Arabia's mammoth 9.5 million bpd output as well as that of other Gulf exporters such as Kuwait and the United Arab Emirates, but it immediately increases the possibility of outside intervention. (Kapan gets 75 percent of its oil from the Gulf, Western Europe more than 25 percent, the United States about 15 percent.)

Iran was reported by Reuter Sept. 23 to have declared its half of the Gulf a war zone, ordering tankers and merchant ships to keep out. It also warned against outside intervention in the conflict, saying that if this occurred Iran would "feel justified" to take appropriate action. Rumors Sept. 23 that the Iranians had moved to close the Hormuz Strait remained unconfirmed at time of writing.

Tehran also ordered all shipping out of the Shatt al Arab estuary, which lies at the head of the Gulf between Iraq and Iran. The present escalation in fighting followed Iraq's abrogation last week of a 1975 treaty that divided the Shatt al Arab down the middle and made other border adjustments in return for Iran ending its support of rebellious Iraqi Kurds.

Iraqi strong man Saddam Hussein, no longer concerned about the Kurds who have become more of a problem for Iran than Iraq these days, now has reasserted sovereignty over the entire Shatt al Arab. Meanwhile his diplomats in Ankara claim that the objective of the Iraqi assault across the Shatt al Arab into Iran is to "free the Strait of Hormuz to Iraqi and international shipping."

In fact, the Iraqi leadership is seen as having several motives in apparently acting as the driving force behind the present fighting: redeeming its honor, blemished by being compelled by circumstances to accept the 1975 treaty terms with Iran; establishing Iraq in the wake of the Iranian revolution as the superior power in the region, and, in the wake of the Israel-Egyptian treaty, as the leading Arab nation in the confrontation with Israel; distracting attention at home from the Ayatollah's subversive (Shiite) appeals to Iraq's own large Shiite Muslim community.

Some Western analysts expect the Iraqi thrust to be of limited duration. They point out that the motives listed above could be satisfied without a prolonged war. And neither Iraq nor Iran are believed by Western experts to have the economic capacity to sustain heavy conflict for long.

The danger lies in the unpredictable.

For instance, should the Ayatollah's shaky regime begin to crumble under these new stresses, disgruntled minorities such as the Kurds, the Arabs (centered in the oil-producing areas), or the Azerbaijanis could be tempted to try to gain added independence from the tattered central government. This, in turn, it is feared, might spur the Soviets into an attempt at capitalizing on chaos by some quiet or obvious intervention along the Iran-Soviet border.

At time of writing, the Kremlin appeared unsure of what directon to take. An article in the government newspaper Izvestia Sept. 23 warned both Iran and Iraq that their conflict was playing into the hands of Western imperialists. It accused the West of inciting an escalation in tensions between the two warring states.

Some Western observers saw the same conflict through the opposit end of the ideological telescope. They expressed concern that the fighting and consequent instability in a region vital to Western interests could only benefit the Soviets.

Meanwhile, a senior Iraqi official Sept. 22 was given an audience in the Kremlin. the Iraqis have a friendship treaty with the Soviet Union, which has supplied much of their military hardware, but just how far the Kremlin leaders, probably feeling somewhat burned by the apparently unforeseen results of their intervention in nearby Afghanistan, would be prepared to go in support of Iraq was unclear. Indeed, the Soviets have lately been trying to mend fences with the Islamic regime in Tehran. The Iranian ambassador was given a hearing Sept. 23 in Moscow also.

Perhaps the greatest concern of Western analysts was the possibility of a blockade by either side of the Strait of Hormuz oil passageway. This would be strong cause for Western counteraction of some sort. And both the United States and the Soviet Union have naval forces close to the Gulf area.

Monitor special correspondent Alexander MacLeod reports from London:

If the Iran-Iraq dispute escalates to a point inviting great-power intervention, the West still enjoys a deterrent edge over the Soviet Union. This is the view of European analysts on the latest Middle East flare-up.

Figures just published by the authoritative London-based International Institute for Stra tegmates. They show that the present state of the naval buildup in Indian Ocean waters adjacent to the oil-rich Gulf favors the United States -- although, of course, the Russians are better placed on land.