Threatening the Lifeline

By William E. Smith

Missiles hit tanker after tanker as the Iran-Iraq war takes a new turn

"Very dangerous, very worrying," declared an official in Bahrain. If anything, that was an understatement. In the Persian Gulf last week, no tanker was safe from missile fire as the 43-month-old war between Iran and Iraq took an alarming new direction. For months, Iraq's President Saddam Hussein had been threatening to attack any vessels using Iran's big oil-exporting facility at Kharg Island. The government of Iran's Ayatullah Ruhollah Khomeini had vowed, in turn, that it would respond to such an attack by blockading the Strait of Hormuz at the mouth of the gulf, choking off the oil lifeline to Japan and parts of Western Europe.

In the past month, the Iraqis have started to make good on their threat, using five French-made Super Etendard fighter planes to fire at vessels carrying Iranian oil, including some owned by Saudi Arabia, an ally of Iraq's, and by other Arab states. Last week, for the first time, the Iranians began to retaliate by attacking Saudi and Kuwaiti tankers in the gulf. So far, half a dozen are known to have been damaged. None has yet been destroyed, though the Saudi supertanker Al Ahood has been ablaze since it was struck by Iraqi missiles two weeks ago. But on Saturday the Iraqis struck and sank a Greek-owned cargo vessel bound for Iran. Iraq hopes that by threatening tanker traffic, it can prevent Iran from financing its war effort with oil revenues. Iraq lost a large share of its oil production to Iranian bombing raids shortly after it invaded Iran in 1980. While Iran is probably incapable of closing the Strait of Hormuz to world shipping by military means, it certainly has the capacity to make travel within the gulf so hazardous and costly that shipping companies would be reluctant to send their tankers into the war zone. Already, several U.S. and Japanese firms, including Mobil Corp., have decided to stay out of the northern third of the gulf, and others are expected to follow suit. In London, insurance underwriters have tripled the cost of coverage for tankers and their cargo in the area. Assessing the situation, a Saudi diplomat observed that all the Iranians need to do to curtail oil supplies is keep up their occasional tanker attacks "and let Lloyd's of London do the rest."

Fortunately, the world is nowhere near as dependent on gulf oil as it was ten or even five years ago. Constantine Fliakos, a senior oil-trade analyst at Merrill Lynch, Pierce, Fenner & Smith Inc., notes that the closing of the Strait of Hormuz would no longer be a major threat to most Western economies. "We are in a different world now," he says. The U.S. currently imports only 3% of its oil from the gulf, compared with 13% in 1979. The general view is that if the gulf's present output of 7 million to 8 million bbl. a day, 40% of which comes from Saudi Arabia, were to be cut off, the vacuum could be largely filled by increased exports from nongulf producers such as Nigeria, Mexico, Venezuela, Indonesia and Libya.

In addition, many countries maintain strategic reserves. The U.S. alone has 400 million bbl., and the Saudis have at least 60 million bbl. stored on tankers at sea. "For three months," says Fliakos, "we could go on as if nothing had happened." Most experts agree, however, that a closure of the gulf would have a strong psychological impact and lead to a sharp, if temporary, increase in world oil prices of perhaps 20%. Among the countries most seriously affected would be Japan (which imports 58% of its oil from the gulf), Italy (46%), Spain (39%), and France (35%). In response to oil fears, the Tokyo stock exchange last Thursday experienced the second-worst day in its history. Furthermore, an oil cutoff could generate unrest and even upheaval in some of the gulf states. It could also lead the Arab countries to make withdrawals from Western banks, thereby putting added strain on the already troubled financial markets.

The latest round in the tanker war began early last week when a Kuwaiti-owned tanker of medium size, the Umm Casbah, was hit by rockets after leaving the Kuwaiti port of Mina al-Ahmadi. The Britain-bound ship was only slightly damaged, and after an emergency stop at Bahrain it sailed on toward the Strait of Hormuz with its cargo of fuel oil. The same evening, Iraq declared that it had not fired on gulf shipping for four days. If true, it could only mean that Iran had joined the tanker war at last.

The next day, the Iraqis retaliated by attacking two tankers in the vicinity of Kharg Island. Both the Greek-owned Esperanza No. 2 and the Iranian-owned Tabriz were set ablaze. The ships were in the area where the Al Ahood, hit a week earlier, was still floundering and in danger of breaking up. Later that day, a Kuwaiti tanker, the Bahrah, was struck by a rocket after being circled by two unidentified planes. One aircraft returned to fire a second rocket, but the ship was able to continue to a Kuwaiti port. The Kuwaiti Cabinet subsequently issued a statement blaming Iran for the attack.

Next came a strike on a Saudi supertanker, the Yenbu Pride, which was heading south from Kuwait toward the Saudi port of Ras Tanura and was within Saudi coastal waters when it was hit by rockets. Again the Iranians were blamed. After a day's respite, two more ships were reported hit on Friday, this time by Iraq, and on Saturday came the sinking of the Greek-owned cargo vessel by an Iraqi missile.

In the absence of much verifiable information, rumors sprang up everywhere. One report, denied by Washington, had it that a U.S. destroyer was fired on by an Iranian warplane. There were also reports of dissension within the Iranian armed forces over the Khomeini government's new policy in the gulf. Many naval officers were said to be opposed to it, and an airman was reported to have defected to Saudi Arabia in his U.S.-built Phantom F-4 fighter aircraft.

The gulf states were slow to react to the tanker attacks. The foreign ministers of the six-nation Gulf Cooperation Council (Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the United Arab Emirates) met in Riyadh. But after almost five hours of talks, the ministers merely condemned the Iranian attacks and said they would appeal to the United Nations Security Council and the Arab League. Extreme caution dominates the thinking of even the most powerful of the gulf nations, Saudi Arabia. Before the Iranian attackers hit the Saudi tanker off Ras Tanura last week, a U.S.-operated AWACS radar plane detected F-4s in the region and notified the Saudi air force. The Saudis scrambled their superior F-15 jet fighters in good time, but failed to engage the Iranian planes. The Saudis have at least 130 fighter aircraft, far more than the Iranians have in operating condition, but they are not eager to get involved in open combat.

Another course open to the gulf Arabs would be to seek closer military ties with the U.S., but they are reluctant to do so. Richard Murphy, Assistant Secretary of State for Middle Eastern Affairs, led a U.S. delegation to the gulf last month to offer to bring fighter squadrons into the area if the Arabs would permit the U.S. to build land bases there in return.

None of the gulf states said yes. Remarks a senior U.S. diplomat: "They have always been torn between wanting our protection and fearing the consequences it would bring. They want us around, but not underfoot." The Arabs in general remain wary of the U.S. relationship with Israel. The fragile sheikdoms dread the idea of having U.S. servicemen stationed in their midst. And most important, they are fearful of offending Khomeini too deeply because he just might win the war.

The Reagan Administration is left with little choice but to restate its policy of keeping the waterway open to international shipping. Five U.S. gunboats are in the gulf, and a task force of seven or eight vessels spearheaded by the carrier Kitty Hawk is in the Arabian Sea not far away. Last week the Administration emphasized that any U.S. military role in the region should be part of a multinational effort.

The prospect, as this futile and murderous war approaches its fifth year, is for a continuation of the struggle. Having finally repulsed the Iraqi invaders with tremendous casualties on both sides, the Iranians have tarried for months without launching their long-threatened "final offensive." Iraq is desperate to end the war it started; Iran is determined to destroy Saddam Hussein at any cost; and Saudi Arabia is terrified of a possible Iranian victory. That adds up to a bad formula for peace. Thus, while insurance rates climb and world oil prices quiver, the tanker war is likely to go on. Summarizing his country's new policy, the leader of Iran's parliament, Ali Akbar Hashemi Rafsanjani, told his countrymen last week that they should be prepared for a "long-drawn-out war with the U.S." Said he: "Either the gulf will be safe for all, or it will be safe for none."

--By William E. Smith.

Reported by Barry Hillenbrand/Riyadh and Johanna McGeary/Washington

With reporting by Barry Hillenbrand, Johanna McGeary