The Oil Weapon and the Tanker War in the Persian Gulf (3); Escalation of War

In the second part of the shift in the objectives and strategies of Iran and Iraq, the increasing role of the IRGC in the war, the disruption of the balance of power in the air, and the beginning of the tanker war were discussed. In this section, we will continue the discussion on the air attacks against Iran's economic infrastructure; the escalation of the tanker war; the increased military presence of the United States, European countries, and the Soviet Union in the Persian Gulf; and the internationalization of the war. Despite numerous attacks by Iran and Iraq against vessels in the Persian Gulf, the tanker war had little impact on the oil market. This war raised concerns in some economic circles, but ultimately did not lead to a permanent increase in oil prices nor did it cause a shortage in the global oil market. The surplus of supply over demand in the oil market was one of the main reasons for this phenomenon. The trend of Iran's oil exports revealed the effects of the tanker war four months after its onset. Iran's daily oil exports from Khark Island, which was close to 1.6 million barrels, dropped to 600,000 barrels per day in early June 1984, resulting in a daily revenue decrease of nearly 25 million dollars from oil exports. Despite this, Iran exported 200,000 barrels of oil daily from offshore wells through the Sirri and Lavan Islands. Concurrently, Iran quickly attracted customers for its Khark oil exports with a discount of 3 dollars per barrel, while for buyers, the insurance cost for each barrel of oil from this island increased by 2 dollars and 33 cents. In fact, Iran's average daily oil exports during the years 1984 and 1985 (1364-1365) did not change significantly, although it slightly decreased compared to 1983. Exports in 1983 and 1984 were 1.77 and 1.57 million barrels per day, respectively. In 1985, despite intensified air attacks by Iraq against Khark's oil facilities, Iran managed to export 1.6 million barrels of oil daily. In that year (January 1, 1985 - December 31, 1985), Iraq attacked Khark Island 120 times, 77 of which occurred from mid-August to the end of December. In 1986 (January 1, 1986 - December 31, 1986), Iraq systematically targeted Iran's economic infrastructure, including telecommunications networks, railways, industrial factories, power plants, cities with military barracks, hydraulic facilities, and oil installations and refineries. During these attacks, the refineries in Tabriz, Isfahan, and Tehran were severely damaged. Despite emergency repairs at Tehran's refinery, maintaining its output of 225,000 barrels per day was not possible. With the continuation of the tanker war in the Persian Gulf, Iran faced a shortage of petroleum products in the summer of 1986, leading to a threefold increase in imports of these products to 300,000 barrels per day, and subsequently, in October 1986, Iran resorted to gasoline rationing. Overall, Iraq's attacks, despite their extensive scope and lack of concentration, were not paralyzing, and the timing of the attacks somewhat mitigated their effects. Most air attacks occurred in the spring months when the demand for petroleum products was lower compared to winter. Nevertheless, the negative effects of fuel and petroleum product shortages on military and civilian forces were tangible. The escalation of the tanker war and foreign assistance to Saddam were marked by intensified attacks against ships and tankers. In 1986, Iraq targeted 45 tankers and 10 commercial ships, increasing its efforts to cut off Iran's oil exports. In February 1985, Iranian forces, in an amphibious operation known as Fajr 8, crossed the Arvand River (Shatt al-Arab) and captured the Faw Peninsula. This successful and unprecedented operation, based on the principle of surprise, allowed Iran to capture an Iraqi city after five years. The occupation of the Faw Peninsula dealt a heavy blow to Iraq, its supporting countries in the southern Persian Gulf, and Western countries. This operation, more than anything, was a psychological victory for Iranian forces, boosting the confidence of the Islamic Republic and prompting military commanders and officials to once again speak of a 'final assault' against Iraq. Consequently, an international network consisting of government agencies and private banks increased its efforts to provide financial assistance to Saddam and strengthen the Iraqi military. An example of this assistance was the allocation of a bank credit of over one billion dollars from the Italian BNL branch in Atlanta, USA, to Saddam, which was part of a project by the US Department of Agriculture. Ultimately, the assistance and credit allocations to Iraq reached 3 billion dollars. Meanwhile, the price of each barrel of oil in global markets fell to 10 dollars or even lower in 1986, marking a reverse oil shock. Iraq's air force, equipped with Exocet anti-ship air-to-ground missiles, received 200 AS-30 air-to-ground missiles from France in January 1985. In late August 1986, Iraqi aircraft targeted the oil terminal on Sirri Island, located 220 kilometers southwest of the Strait of Hormuz. In November 1986, the Salman oil field (formerly Sasan, 144 kilometers south of Lavan Island) and a newly built oil terminal on Lark Island in the Strait of Hormuz were targeted by Iraqi air force attacks. The distance of this terminal from the nearest Iraqi airport was 1300 kilometers. With the increase in Iraqi air force attacks in the Persian Gulf, the intensity of tracking, controlling, and inspecting ships passing through the Strait of Hormuz to prevent arms shipments to Iraq intensified. Additionally, the Islamic Republic, while attacking oil tankers, warned the countries of the southern Persian Gulf once again to cease assistance to Saddam. As Iraq lost its ability to export oil through the Persian Gulf, Iran directed its attacks towards ships traveling to the ports of Arab countries in the region, especially Kuwait and Saudi Arabia. In light of these developments and intensified attacks, the Arab Gulf countries turned to Western countries for assistance, resulting in Britain, followed by France and the United States, increasing their military presence in the Persian Gulf and the Sea of Oman. The primary concern of these countries was the intensification of the tanker war and the disruption of the free flow of oil from the Persian Gulf to the global oil market. In 1986, both Iran and Iraq conducted 93 attacks against tankers and commercial ships. The changing of tanker flags, the internationalization of the war, and mine-laying occurred in early 1987 (January 1, 1987 - December 31, 1987), where a sort of stagnation prevailed on the fronts, and neither side achieved significant success, with Iranian forces unable to approach Basra. In early that year, Iran executed several offensive operations (including Karbala 5 and 8), most of which were around the 'Fish Canal' - an artificial canal 36 kilometers long east of Basra. At this time, Western analysts coined the adage that 'Iraq cannot win the war, and Iran cannot lose the war,' while the United States and the Soviet Union, the two superpowers of the time, had openly entered the fray. In late April 1987, the Soviet Union increased its support for Iraq. In this context, Kuwait was allowed to lease three Soviet tankers for its oil exports. About a month later, the United States brought 11 out of 21 Kuwaiti tankers and gas carriers under the American flag as part of 'Operation Earnest Will,' and American warships escorted these vessels in the Persian Gulf. On Thursday, May 6, 1987, an Iranian frigate opened fire on a Soviet cargo ship, and ten days later, a Kuwaiti-chartered Soviet tanker was damaged after hitting a floating mine. On the same day, May 17, an American warship named Stark was hit by two Exocet missiles from an Iraqi aircraft, resulting in the death of 37 crew members and injuries to 21 others. Iran's response to the changing of the flags of tankers used by Kuwait and their escort was mine-laying in the Persian Gulf. On August 7, 1987, a Kuwaiti tanker flying the American flag, named 'Bridgton,' which was being escorted by an American warship, was severely damaged after hitting a mine near Farsi Island. Following this incident, the United States undertook a highly secretive operation called 'Operation Prime Chance' to prevent Iran from laying mines in the Persian Gulf. In light of these events, Britain, France, Italy, the Netherlands, and Belgium sent several warships and mine-sweeping units to the Persian Gulf to escort tankers and commercial vessels. In the wake of these developments, tensions in the region reached their peak, and the presence of foreign warships in the Persian Gulf intensified the internationalization of the Iran-Iraq war in the Persian Gulf. The response of Western countries was solely to counter Iranian threats, and in fact, the war transformed into a conflict between the Islamic Republic and the United States. From the perspective of Islamic Republic officials, attacks on tankers and other ships were carried out in response to Iraqi attacks and aimed at damaging the economic targets of Saddam's allies and partners.