Threats of a Wider War

By William E. Smith

Iran and Iraq suffer heavy losses as fears rise of a major escalation

"From today, the siege of Kharg Island will begin."

That chilling announcement by the Iraqi government of President Saddam Hussein last week sent shock waves of alarm to the U.S., Western Europe and Japan, as well as to Iraq's Arab neighbors. It suggested that after 41 months of bloody but inconclusive fighting between Iraq and Iran, the Iraqis had decided to make good on a longstanding threat to close down Iran's biggest oil-exporting terminal. If that happens, the Iranian government of Ayatullah Ruhollah Khomeini has threatened to retaliate by blockading the 40-to-60-mile-wide Strait of Hormuz, through which 20% of the non-Communist world's crude oil passes. Such a closure, in turn, could widen the war considerably. President Reagan declared only two weeks ago, "There is no way we could stand by and see that sea-lane denied to shipping."

The Iraqi announcement briefly sent up the prices of spot oil and metals and put pressure on the cost of insurance for tankers. Then Iran declared that no attack had taken place, and U.S. reconnaissance photographs appeared to back up the denial. In a startling communique at week's end, the Iraqi military command admitted that it had not struck Kharg Island after all. But, it said, it had hit tankers and other ships in the area. Most diplomats concluded that Saddam Hussein had announced the phantom attack in a desperate warning to the West that Iran must not be allowed to defeat Iraq.

Saddam Hussein has every reason to be worried. Five years after the revolution that toppled the Shah Ayatullah Khomeini's theocratic regime has consolidated its power at home, settled most of its international debts and demonstrated that it is willing to hurl a virtually limitless number of young volunteers against Iraq in kamikaze-like assaults (see following story). In three separate offensives last week, tens of thousands of Iranians, some of them barely nine or ten years old and armed merely with rifles and grenades, tried to break through Iraq's defenses, only to be cut down by machine-gun and artillery fire. It was one of the biggest battles yet in the murderous conflict.

As the week ended, the bodies of the fighters still littered the ground where they had made their assaults. "Either the Iranians will come to make peace with us, or we will kill them all," said an Iraqi officer. "They cannot take our land." For miles behind the Iraqi lines, tanks, armored personnel carriers and heavy artillery were dug into the brown-gray sand. Iraqi forces seemed to be well supplied. "The Iranians attacked in waves," said the Iraqi commander near a place in the wasteland called Al Azarh, "but they had no chance."

Despite their appalling losses, the Iranians continued to hammer away at the strategically important highway that links Basra, Iraq's second largest city and a key center of the country's oil industry, to Baghdad, the capital. With 300,000 to 400,000 more soldiers massed along a ragged 370-mile section of the border, Iran appeared in no mood to give up.

Amid the conflicting claims and counterclaims, it was clear only that the loss of life has been tremendous. The Iraqis said they had killed 30,000 Iranians, the majority of them young men and boys, in the recent fighting, including 2,000 in one battle last week. Iran claimed to have killed 12,000 Iraqis. The shelling of civilian targets also continued: at least 100 Iranians were killed in several border towns. But last week's toll barely began to measure the human cost of the war. According to an Iranian defector who was formerly a senior official in the country's army medical corps, Iran has lost up to 400,000 troops since the Iraqis started the war in September 1980. The toll for Iran is particularly high because the country relies so heavily on human assault waves. Total Iraqi deaths are estimated to have reached 70,000.

Each side, curiously, feels that the odds favor its opponent. Iran is apparently convinced that Iraq now has the edge in military equipment. Both the Soviet Union and France are keeping Baghdad well supplied, while the Khomeini government cannot replace or repair the U.S. equipment it inherited from the Shah. Many of Iran's naval vessels have either been lost or are out of service because of a shortage of spare parts. According to Washington analysts, Iran now has only 25 working F-4 fighter-bombers out of a prewar total of 190; just 30 operable F-5 fighters out of 166; and five or ten serviceable F-14s of 77 purchased by the Shah.

Iran's attempt to destroy Saddam Hussein by squeezing his country economically appears to have failed. Besides preventing Iraqi ships from using the Gulf, Iran destroyed Iraq's main oil facilities at Fao in 1980. In 1982 Syria, an ally of Iran's, turned off the valve on Iraq's pipeline to the Mediterranean, reducing Iraq's oil exports to a mere 650,000 bbls. per day and its 1983 income to $9 billion. But with some discreet U.S. economic help and huge quantities of money from its Arab friends, including Saudi Arabia, Kuwait and the United Arab Emirates, Iraq has weathered its financial problems.

Nonetheless, Saddam Hussein is not sanguine about his country's prospects. Although he started the war in the hope of toppling the Ayatullah, Saddam Hussein has long since learned that his country, which has only one-third the population of Iran, lacks the might to achieve a victory. His repeated offers to negotiate a settlement have been rejected by Khomeini. Most Western analysts take Saddam Hussein's latest threat seriously: if Iran achieves a breakthrough on the ground, they believe, Iraq may feel compelled to attack Kharg. Saddam Hussein probably could not destroy the facility, since it is well protected, but he could bomb the tankers at the loading docks and disrupt Iran's oil exports. In October Iraq received from France five sophisticated Super Etendard fighter-bombers, which can be equipped with lethal Exocet missiles.

Saddam Hussein's scare tactics have had some of the effect he wanted. Japan held several of its tankers outside the fighting area until it could find out what was happening. The spot price of oil on the world market rose as much as 600 per bbl. but later settled back. At Lloyd's of London, nervous insurance underwriters met two or three times a day to assess the situation. They did not raise their rates significantly, but all this could change overnight if attacks on tankers should begin in earnest.

The U.S., to back up its commitment to keep the Strait of Hormuz open, has four ships in the Gulf, in addition to a 30-ship flotilla, led by the aircraft carrier Midway, in the Indian Ocean. Early last week the U.S. destroyer Lawrence, on duty near the entrance to the strait, fired warning shots when an unidentified vessel crossed its bow at a distance of about a mile. That same day the Lawrence fired into the air in front of a low-flying Iranian patrol plane and broadcast a warning to an Iranian frigate after the plane and the ship came within 2 1/2 miles of the American destroyer. Under orders issued in late January, the U.S. asked all ships and planes in the area to stay at least five miles away from American ships.

The U.S. is far less dependent on Gulf oil than it was barely five years ago.

Stockpiles, conservation, the economic slowdown and greater production outside the Middle East have produced a worldwide oil glut. Today the U.S. gets less than 5% of its oil, or about 500,000 bbls.

per day, from the Gulf, vs. 24% in 1979. Western Europe and Japan are more vulnerable: each imports from the Gulf about 2 million bbls. per day, or one-third of Western Europe's oil and half of Japan's. Even so, oil supplies would have to be shut down for several months before serious effects would be felt.

One of the countries that would be most affected by the closing of the strait is Iran, which currently exports 2.6 billion bbl. of oil per day through the waterway.

That crude is expected to bring Iran $24 billion this year, half of which will go to finance the war. Khomeini seems to doubt both the seriousness of the situation and the ability of the U.S. to do anything about it. "Saddam Hussein is going to fall," says the Ayatullah, "and neither America nor any other power can keep him in office." Maybe not. But what is worrying is that neither the U.S. nor any other power may be able to prevent two bitter enemies from turning their particularly vicious regional war into a theater of international conflict. --By William E. Smith.

Reported by Barry Hillenbrand/Baghdad and Johanna McGeary/Washington

With reporting by Barry Hillenbrand, Johanna McGeary