(4 of 5)
Outside Iran, countries with a major stake in the outcome of the Shah's effort watched and waited uneasily. Iran is vital to the industrialized world not only because it is the second largest exporter of crude oil in the Middle East, but also because it is the "policeman" of the crucial Persian Gulf sea-lanes through which 40% of the non-Communist world's oil is shipped. The U.S. gets 8% of its imported crude from Iran: Western European countries from 20% to 40% of their supply. The impact of the dead stop in Iranian oil shipments has not yet been felt, even in South Africa (which depends on Iran for 90% of its crude) or Israel (which relies on Iran for 70%). Saudi Arabia has made up much of the slack by expanding its output from 7 million bbl. per day to a maximum capacity flow of 11 million bbl.
In addition, many companies and countries made large oil purchases during the last three months of 1978 anticipating the 14.5% price increase announced two weeks ago by the Organization of Petroleum Exporting Countries. But if the Shah were replaced by a fundamentalist Shi'ite government eager to cut back on his modernization schemes, the subsequent reduction in Iranian exports would push prices even higher, with the result, in the view of one oil expert, that "we'd all fall out of bed."
Nowhere is the anxiety about Iran greater than in Washington. Since 1972 the U.S. has pursued a policy of unremitting support for the Shah. But that kind of thinking, a veteran policymaker observed last week, caused the U.S. to "miss a chance to act. Washington proceeded on the assumption that what the Shah needed was propping up; what he really needed was to be told the facts of life." The facts: if he wanted to retain even a semblance of power, he would have to find some way to accommodate his more moderate opponents by moving toward the establishment of democratic institutions. By standing fast for so long, he united the opposition behind its most militant faction, which will settle for no less than his ouster.
The State Department last week reiterated its support for the Shah's "efforts to promote stability," but the carefully worded statement lacked the conviction that had characterized earlier pronouncements. Meanwhile, three high-level task forces settled down to plan for contingencies. Among the top priorities: preventing the sophisticated radar systems and advanced F-14 fighters that the Shah has purchased from the U.S. from falling into Communist hands.
In long-range terms, the most worrisome prospect is the deterioration of U.S. influence in what National Security Adviser Zbigniew Brzezinski has called "the Arc of Crisis," a vast region of the Middle East and Asia Minor where instability invites Soviet adventurism. Saudi Arabia, in particular, has become increasingly skeptical of America's resolve to safeguard the Arc, and, according to some unconfirmed reports, has opened discreet diplomatic channels to Moscow. There is little chance that so virulent an anti-Communist state as Saudi Arabia would seriously consider any accommodation with the Soviets, but the very fact that it is talked about at all produces understandable concern in Washington.