26. Study Prepared in the Central Intelligence Agency1

OPR–7610077

[Omitted here are the table of contents and two maps.]

PRÉCIS

The Gulf/Peninsula region is important to the USSR in the first place because it is important to the West, and the primary Soviet goal is a negative one—to deprive the West of influence there. This apart, the USSR’s interest in the area is based on its geographic proximity, its strategic location between the Mediterranean Sea and the Indian Ocean, its status in the general Middle East context, and its economic [Page 127]significance based on vast oil deposits. While these elements translate into a broad desire on the part of the USSR to achieve the strongest possible position there, no vital Soviet interests are involved. This does not imply a lack of motivation to act. It does, however, suggest a lower level of intensity in the Soviet effort and less inclination to risk confrontation with the West than might be the case in an area of higher priority.

Before 1973, the Soviets had made good progress in developing their presence and influence in the area. Their 1972 Treaty of Friendship and Cooperation with Iraq is the most far-reaching security treaty which the Soviets have with any Third World country. The USSR gained access to the Iraqi ports of Basrah and Umm Qasr and fairly extensive use of the South Yemeni port of Aden. Soviet economic relations with Iran have developed significantly since the early 1960s, and the Soviets have many economic advisors in place in Iran as well as in Iraq and South Yemen.

The Soviets also have an impressive contingent of military personnel in Iraq and South Yemen. The Soviet role in providing economic assistance, military resupply, and spare parts has also helped give the USSR some leverage in its dealings with these two countries. Moreover, the Soviets have some compatibility of interest with these clients, which facilitates cooperative action. Both South Yemen and Iraq share the Soviet desire to radicalize the Gulf, and both provide assistance to the so-called “progressive forces” which the Soviets also back. While these states may be acting primarily on their own initiative and in their own behalf, they are also advancing Soviet interests in the Gulf, funneling Soviet arms and propaganda to subversive and revolutionary elements.

The Soviet position in the area has, however, deteriorated since the 1973 Middle East war, and the prospects of a resurgence are not impressive. This is due primarily to the growing wealth of the oil-producing Gulf states which has contributed to several trends inimical to Soviet interests. First, it has produced a new set of economic relationships between these states and the West based both on Western oil purchases and on the desire of the oil-rich nations to purchase products and technology from the advanced industrial states. The Soviets have been excluded from the resultant economic network.

Secondly, their increased wealth has permitted a new self-assertiveness on the part of the major local states, Saudi Arabia and Iran, which are determined to prevent Soviet encroachment. Iran, with some credibility based on its rapidly expanding military strength, has expressed a commitment to police the Gulf and exclude foreign intrusions. It demonstrated its willingness to act on this commitment by intervening in late 1973 to tip the balance for the Sultan in the struggle against Soviet-backed rebels in Oman’s southern province of Dhofar.

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Saudi actions, while less dramatic, may be producing even more profound long-term effects. The Saudi weapon is money, and the goal is to encourage moderation in the area. While Saudi policies are not often pressed forcefully; their net effect has increasingly been to constrain the expansion of Soviet influence in the area (and, as a consequence of the Saudi-Egyptian combination, in the Middle East in general).

Soviet bilateral relations with those Gulf/Peninsula nations with which they have had contacts have generally declined since late 1973. In the case of Iran, this has been due to the Shah’s rapid arms buildup, aspiration to predominance in the Gulf, and intervention in the Oman struggle. North Yemen, with help and encouragement from Saudi Arabia, has been able to move away from the USSR. South Yemen has also sought money from the traditionalist oil states—a situation which may eventually have a moderating effect on its policies. And Soviet leverage over their major client in the area, Iraq, has declined as that nation has improved its economic position, patched up its relations with Iran, and turned to the West for technology and equipment.

At the same time, Soviet efforts to improve political and economic relations with the traditionalist Arab states of the Gulf have thus far proved unsuccessful, Kuwait being to some degree an exception. In spite of repeated Soviet initiatives, Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Qatar and Oman refuse to have any formal dealings with Communist countries.

The USSR’s efforts to gain some leverage over the region’s energy resources have, to date, also proved fruitless. It has established firm trade relations with Iran and Iraq, importing primarily gas and oil and exporting machinery and equipment. It does therefore have access to key energy markets. But the quantities involved are small, and both Iran and Iraq have proved tough in negotiating payment terms for their energy exports, preferring hard currency to barter arrangements and demanding market prices from the Soviets. The USSR has thus failed to lay the groundwork for large-scale future purchases at concessionary rates.

In their effort to become the main patron of subversion and revolution in the Gulf area, the Soviets have registered only one gain in recent years: the fact that the Chinese have seen fit to abandon local competition with the Soviets. The USSR itself has accomplished little. The rebellion in Dhofar which the Soviets backed has failed abysmally, and subversive forces elsewhere in the Gulf have thus far made few gains. The main result of Soviet support of subversion has been to further alarm the traditionalist states which have been the objects of these efforts.

And finally, while some advantages have accrued to the USSR from its efforts to cultivate clients, the clients themselves have been [Page 129]frustratingly independent. In addition to North Yemen’s movement away from the USSR in recent years, the Iraqi Baathists continue to pursue a number of policies which are objectionable to the Soviets. They oppose such Soviet Middle East policies as support for a Geneva conference, they repress the Iraqi Communist Party, and they are continually at odds with the USSR’s other major Middle East client, Syria. In short, the extent of the influence which the USSR seems able to gain in these countries is limited. When there is a coincidence of interests, Soviet backing may enable the client state to pursue mutual goals for mutual benefit. When these interests conflict, the Soviets may try to force their will by threatening to slow down arms shipments or cut financial assistance. Such strong-arm tactics have brought immediate results on occasion, but at the cost of antagonizing the client.

In spite of the current adverse trend in the region, Soviet policy-makers do not appear to be shifting their tactics. They continue to pursue a two-track policy in the area. On the one hand, they seek improved relations with the conservative oil-rich states in the hope that they might neutralize and reverse the negative influence being exerted by Iran and Saudi Arabia, prevent Western domination of the oil resources of the region, insure their own potential access to the oil, and tap the hard-currency holdings of the wealthy Gulf states.

On the other hand, the Soviets try to foster the accession to power of sympathetic radically-minded regimes which will be responsive to Soviet policy interests, permit Soviet access to port facilities, welcome a Soviet physical presence, and deny the same to the West. To this end, the USSR supports subversive and revolutionary forces whose stated goal is the overthrow of the traditionalist governments of the area.

While these clearly contradictory approaches must complicate Soviet efforts in the region, the Soviets actually have little to lose by supporting subversion and revolution—their relations with the traditionalist states could hardly be worse. They probably reason, moreover, that the situation in the region is fluid and that they can well afford to wait for favorable opportunities to develop.

Such opportunities might include another Middle East war accompanied by an oil embargo which would again undermine Gulf-state relations with the West, or a deterioration in US relations with these states due to disagreements over the Arab trade boycott or US weapons sales. Either of these developments could lead to an improved Soviet political position in the region based largely on the desire of the Gulf states to put pressure on the US. However, the Soviets would still be unable to absorb or pay for the oil in which the Gulf states would be drowning and would still not have the technology and expertise which these states want to purchase. This, combined with the continuing [Page 130]regional antagonism towards the USSR, would act as a limiting factor on the extent of any rapprochement.

The Soviets will, in all likelihood, increase their oil imports in coming years, and, should their need to import coincide with either an oil embargo or substantially increased production in the Gulf states, it is likely that some barter arrangements could be made between the USSR and these states. This eventuality is unlikely to affect the long-term economic situation, however. Soviet imports will rise gradually, and the oil states, if they choose to do so, will probably have the capacity to meet both Soviet and Western oil requirements. In addition, the Western market will continue to be preferred, as the oil states will still want hard-currency payments rather than barter arrangements.

In the event one or more of the conservative governments of the region were overthrown and a radical government established, the Soviets would be the obvious beneficiaries. As Iran and Saudi Arabia would probably not tolerate such an occurrence in one of the smaller states of the region, with the possible exception of Kuwait, where their intervention might draw a countering Iraqi reaction, the main question becomes what effect such a change might have in one of these larger countries.

Should reformist elements prepared to deal with the USSR come to power in Saudi Arabia, doors now shut would open to the Soviets elsewhere in the Gulf, and they would quickly enlarge their presence. Saudi efforts to check Soviet influence throughout the Gulf might cease and Soviet-backed radical groups in the smaller Gulf states, particularly Kuwait and Bahrain, might be tolerated. This would certainly be even more the case if radicals were to come to power in Saudi Arabia. However, economic reality would presumably continue to limit the extent of Soviet-Saudi cooperation.

As a more highly developed and socially complex country than Saudi Arabia, Iran may be more vulnerable to a radical takeover. And the potential benefit to the USSR would be more obvious. A complex economic relationship already exists between the two and geographic proximity makes further cooperation feasible and desirable from the Soviet point of view. Iran has overwhelming local military superiority and the capacity to control passage through the Straits of Hormuz. This has strategic implications for the West as well as for Iran’s Gulf neighbors. For these reasons, the Soviets would be strongly motivated to provide clandestine assistance to radical forces in the event of insurgency in Iran.

While the above contingencies or other, as yet unforeseen, developments could disrupt the pattern and alter prevailing tendencies, the current combination of factors is clearly detrimental to Soviet interests in the Gulf/Peninsula region. Continued antagonism toward and suspi[Page 131]cion of the Soviets by the major Gulf states, contradictory Soviet policy approaches, the growing wealth of the Gulf states, and the expanding economic network between these states and the West all work to impede Soviet progress. Should these factors remain fairly stable, it seems likely that the forces working against Soviet penetration will remain dominant in the region.

[Omitted is the remainder of the study.]

  1. Summary: The CIA assessed Soviet policy and assets in the Middle East.

    Source: Central Intelligence Agency, DI/OCI Files, Job 79T00889A, Box 9, Folder 7. Secret; [handling restriction not declassified]. Drafted by [name not declassified] (OPR)