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Iranian Prime Minister Mohammed Ali Raja'i, a strict Muslim fundamentalist, flew to New York City to present to the United Nations Security Council Iran's complaint that Iraq had started the war by attacking Iranian territory. Shortly before Raja'i's arrival, President Carter for the first time referred publicly and disapprovingly to "aggression." Since Iraq is indisputably the aggressor in this conflict, Carter's statement touched off speculation that the U.S. was tilting slightly toward Tehran, perhaps in anticipation of the release of the 52 American hostages. Out of that conjecture grew a new flurry of rumors that a secret deal was in the works: Iran would give up the hostages it has held for more than 350 days in exchange for much needed supplies and spare parts for the arsenal of U.S. weapons that the late Shah had purchased. Several scenarios, all of them denied by Carter Administration sources, were suggested. One was that there would be an Iraq-Iran armistice at the end of October, after which the hostages would be released as part of a settlement; the way would then be clear for the U.S. to rearm Iran and to back Iranian diplomatic efforts to recapture territory seized by Iraq. Other rumors had it that the hostages, who reportedly had been scattered to safe houses around Iran, had been brought back to Tehran, and that plans for another secret rescue attempt had been scrapped.
In addition to that speculation, there were renewed worries that the war might yet cause massive disruption In world oil supplies. Both Iraq and Iran have seen their precious refineries in flames, a spectacle that horrified countries as diverse as Brazil, India, France and Japan, which relied on Iraq for a significant portion of their imports. So far, the squeeze on most other importers has been minimal. The U.S. and 19 other member nations of the International Energy Agency hold estimated reserves equaling a 150-day supply of imports. Also, Saudi Arabia, the United Arab Emirates and Qatar are partly compensating for the war-induced shortfall by raising their production levels as much as 1.5 million bbl. per day.
But the oil market could be thrown into a panic if Saudi Arabia were sucked into the war or if tanker traffic were interrupted through the Strait of Hormuz at the southern end of the Persian Gulf. That 36-mile-wide channel has been the lifeline for some 40% of the non-Communist world's total supply. Experts fear that the price of oil could soar beyond $100 per bbl., triple the current price, if the war were to widen or the strait were to be closed.
Deterring those nightmares has dominated U.S. diplomacy and military decisions. The Carter Administration persuaded Saudi Arabia and other gulf states to stop letting Iraqi warplanes use Saudi airfields, since such complicity might provoke Iranian reprisals. But the Saudis feared they might be attacked by Iran anyway. At their request, the U.S. dispatched four highly sophisticated airborne warning planes, two tankers for mid-air refueling, a ground radar network and 436 U.S. military personnel to fly and operate all that equipment.