Persian Gulf

The 1991 Persian Gulf War restored a regional balance of power more favorable to U.S. interests by rolling back Iraq's occupation of Kuwait and reducing Iraq's military capability. Iran's military and economic potential had already been weakened by the Islamic revolution and eight years of war with Iraq. But the Gulf remains a region with many conflicts, including border disputes, competition over pricing and markets for oil, ideological conflicts, ethnic and sectarian challenges to fragile states, and issues of regime legitimacy. Moreover, both Iran and Iraq will remain committed to revising the status quo in their favor.

These conflicts are likely to keep the region volatile and potentially unstable over the next decade. Despite these conditions, U.S. vital interests are and will continue to be engaged in the Gulf because of the global need for access to the region's energy resources. To protect these interests, the United States has an enhanced forward military presence in the region. While mindful of the need to maintain some kind of equilibrium between Iran and Iraq, the United States is not likely to support one as a balance against the other. That policy is considered to have failed with Iraq's invasion of Kuwait. Rather, the United States, largely through its military capability, has become the major force in deterring aggression and will have the chief responsibility for protecting access to a global resource.

Background and Trends

Continuing Challenges to the Balance of Power

The two major powers in the Gulf, Iran and Iraq, are rivals for Gulf dominance, although they are themselves unequal in power. Iran, with a shoreline that stretches from the head of the Gulf to its foot and into the Arabian Sea, has three times the territory and population of Iraq. However, Iran's relatively stagnant oil revenue and growing population continue to erode its per capita income. Iraq, by contrast, has only twenty-six miles of shoreline on the Gulf, rendering it virtually landlocked. Several of its cities lie less than twenty miles from the Iranian border, and it must rely for strategic depth on Arab neighbors who often have conflicting interests with Baghdad. However, oil resources estimated as second only to Saudi Arabia provide Iraq with a potential per capita income greatly surpassing that of Iran. Both countries possess land armies in excess of 350,000; air forces of about 300 combat aircraft; and the capacity to obtain or develop weapons of mass destruction (WMD) and their delivery systems. Mutual hostility and fear stemming from the Iran-Iraq War and rivalry for Gulf dominance will spur arms buildups in both countries unless checked by outside forces.

Export of Persian Gulf Oil 1995

Source: British Petroleum, Statistical Review of World Energy 1996.

The weaker Arab countries, grouped together in the six-member Gulf Cooperation Council (GCC)--Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (UAE)--rely on Western (mainly U.S.) military support to deter Iran and Iraq and to counter their military capability. Since the Gulf War, modernization of their military forces and equipment, greater U.S. military access to the region, and a significantly enhanced Western military presence in and near the Gulf have improved GCC security against external aggression. However, the GCC states on their own are no match for either of their two powerful neighbors. Only a sustained U.S. military presence in the Gulf can redress the inherent military asymmetry.

The balance of power in the Gulf is unlikely to remain static. If Iran fails to improve its economic and political situation, deteriorating domestic conditions could cause unrest and even a regime change or precipitate challenges to Gulf neighbors and to the West. Iran will attempt to reduce the U.S. military presence and its accompanying political influence in the Gulf, the better to enhance its own. Meanwhile, underlying strains between Iran and Iraq, and Iran and the GCC, could erupt into conflict, although the domestic weaknesses of Iran and Iraq probably preclude a major war between these two Gulf rivals in the next few years.

Iraq will eventually seek to regain control over its oil resources, its air space, and its territory, and, as the September 1996 attack on Irbil demonstrates, will continuously challenge UN-imposed constraints, which may compel U.S military responses. Iraq's rehabilitation will require substantial increases in its oil revenues, and competition with Gulf states for oil markets might revive Iraqi military attempts to intimidate its Gulf neighbors. As Iraq acquires additional oil revenues, its military will be strengthened, both for domestic and external purposes. Elimination of the no-fly/no enhancement zone in the south of Iraq would reduce the warning time given the United States and the GCC states if Iraq contemplates an attack on Kuwait or Saudi Arabia.

U.S. Army Patriot Missile systems
are made ready in the Kuwait desert.

The most significant realignment of Gulf forces could come from a regime change in one of the Gulf States, most of whom face growing domestic tensions. In Iraq or Iran, such a change could be favorable to U.S. interests. A new regime in either country could bring a different political direction and leaders more willing to accommodate U.S. concerns. In either case, threats to U.S. interests would be reduced. But changes could also bring negative results. In both countries, the overthrow of current regimes could lead to domestic instability, unwanted foreign interference in their internal affairs, and the potential for either Iran or Iraq to emerge as a dominant Gulf power. A regime change in a GCC state, such as Saudi Arabia, although unlikely, could undercut the U.S. strategic position. Short of regime changes, a range of domestic shifts in the GCC could affect the strategic balance and support for the U.S. military posture. Anti-U.S. sentiment from local opposition, combined with sabotage and terrorism, could cause GCC leaders to seek a less intrusive and obvious U.S. presence. Such was the case in September 1996 when Saudi Arabia did not support air attacks on Iraq from its territory. In this case, the U.S. could find itself facing continued threats from Iran and Iraq with less GCC host nation support. Continued military reinforcements to deter Iraq--and possibly Iran--may become increasingly onerous to regional allies. It is more likely, however, that GCC states will weather their current domestic difficulties and maintain their strategic links with the U.S. over the coming decade.

Temporary Slowdown in the Persian Gulf Arms Race

In the 1980s and 1990s, the Persian Gulf has been the locus of a major arms race. Between 1987 and 1994, the Near East accounted for 55 percent of all arms transfers to the developing world, of which 60 percent went to the Gulf. Saudi Arabia alone accounted for 29 percent of this trade.

Arms transfers to the Gulf have declined since their peak during the Gulf War, but projected sales of missiles to Kuwait and aircraft to the United Arab Emirates (UAE) indicate that the region's appetite for arms has not diminished, and, as Gulf economies improve, arms purchases will intensify:

Iraq-Kuwait Border

Note: The UN Iraq-Kuwait observer mission (UNIIKOM)
monitors the demilitarized border zone.

GCC members, however, do not rely on their own militaries for defense against their larger neighbors, Iran and Iraq, but rather on an enhanced Western (especially U.S.) military presence. This includes an air wing operated from Saudi Arabia (that conducts Operation Southern Watch in southern Iraq); the U.S. Fifth Fleet, headquartered in Bahrain; and pre-positioned equipment in several GCC states. With improved logistical support, the U.S. can put one to two brigades on shore within twelve to seventy-two hours of a crisis.

Maintaining this enhanced forward presence on a sustained basis may become increasingly costly to GCC states, economically and politically. In some GCC states questions have been raised about the visibility of this presence, its potential as a target for domestic opposition to GCC regimes, and its affordability in a period of expected economic austerity. Terrorist bombings of U.S. military personnel in Saudi Arabia in 1995 and 1996 highlighted U.S. vulnerability, as have Saddam Hussein's repeated military challenges.

Increasing Tensions within the Arabian Peninsula

As the impact of the Gulf War subsides, Gulf states are shifting their focus to domestic affairs, a trend encouraged by the increased U.S. role in Gulf security and the GCC assumption that the United States and its Western allies will handle major external threats. Economic constraints, flat oil prices, and domestic politics may strain cooperation among GCC states on such issues as border disputes, succession problems, differing foreign-policy orientations, and tribal and personal feuds among rulers.

Some progress has been made in solving border disputes between Saudi Arabia and Oman, Saudi Arabia and Yemen, and Oman and all of its neighbors. But two divisive local disputes are likely to continue: the one between Saudi Arabia and Qatar and the one between Qatar and Bahrain. Also, tensions remain between Saudi Arabia and Yemen. Succession issues could also strain GCC relations if a younger, more independent generation gains power. The young Amir of Qatar, who replaced his father in a June 1995 coup, may be a bellwether. He does not abide by GCC rules, and both his method of succession and his independent foreign policy are causing strains in the organization.

Strait of Hormuz

Note: Shipping lane boundaries are marked.

Marked differences of wealth and political orientation among peninsula states could also strain relations. Bahrain, Oman, and Yemen are relatively poor in oil; Saudi Arabia, Kuwait, and Abu Dhabi have larger reserves. Within the peninsula, the smaller GCC states resent Saudi Arabia's dominant position and often resist its attempts at leadership. These differences could foment intra-GCC conflict and even the dismantling of the GCC, although the latter is unlikely. Outside the GCC, the most serious potential conflict involves Saudi Arabia and Yemen. Yemen, a non-monarchial country with a large population (including a substantial portion of Saudi Arabia's blue collar labor force), has caused persistent problems for Saudi Arabia. These include territorial disputes over water-rich Asir province and extensive, undemarcated oil-rich desert areas.

Increasing Ethnic and Sectarian Instability

Many Gulf states are multi-ethnic and multisectarian in composition. Kuwait, Bahrain, and the Eastern Province of Saudi Arabia have substantial Shi'ah Muslim populations dominated by Sunni Muslim governments. In most GCC states, large numbers (sometimes majorities) of foreign workers are drawn from neighboring Arab states, the Indian subcontinent, and East Asia. Iran and Iraq are multi-ethnic as well as multisectarian. Persian speakers constitute only half of the Iranian population; the rest of the population speaks mainly Turkish, Kurdish, or Baluchi. In Iraq, where Arab Sunnis have traditionally dominated government, a Kurdish minority (15­20 percent) is situated in the northwest; an Arab Shi'ah majority (55­60 percent) in the south, and an Arab Sunni minority (15­20 percent) in the center.

Within these states, anti-government activity is growing among key ethnic and sectarian communities, and could generate cross-border frictions. Hostile neighboring governments often use such groups to undermine rival regimes. Of all these groups, the two most likely to be troublesome are the Shi'ah of Bahrain and the Kurds of Iraq. Unrest among the former could spread to Kuwait and the Eastern Province of Saudi Arabia. And though the Kurds are not situated directly on the Gulf, their potential for destabilizing Iraq and for involving two of Iraq's neighbors--Turkey and Iran--is high. In cooperation with the British, French, and Turks, the United States plays a leading role in enforcing a no-fly zone north of the 36th parallel in Iraq, in part to protect the Kurdish population. In the summer of 1996, an Iranian incursion into northern Iraq in support of one Kurdish faction, prompted another faction to invite support from Saddam Hussein. Iraqi forces advanced into the city of Irbil, prompting the U.S. to strike military targets in Iraq and to extend the no-fly zone in the south of Iraq to the 33rd parallel (from the 32nd parallel). Further expansion of Iraqi control over the Kurdish region or more Kurdish fighting could bring Turkish and Iranian forces into Iraq, and it might generate further U.S. military action in Iraq.

Stagnant Oil Income

Oil incomes, while difficult to predict with certainty, are likely to stagnate or decline for GCC states through the year 2000. Although oil prices may increase temporarily, economists do not predict a return to the oil boom of the late 1970s and 1980s. The return of Iraqi oil to the market may depress prices, at least in the short term. Moreover, while overall global demand is expected to increase, especially in the dynamic Asian markets, the GCC will face new global competition. New oil sources (Central Asia, China, Colombia) are developing, and rapid advances in technology are reducing the costs of recovery in hitherto expensive fields (the North Sea). However, the Persian Gulf will retain its preeminent status as the major source of excess oil capacity.

Iran, Iraq, GCC States-Force Structure

Source: International Institute of Strategic Studies,
The Military Balance 1995/96.

Note: Covers total acquisitions; not all equipment is operational.

All Gulf countries are likely to engage in ever sharper competition for market share and for oil revenues to shore up badly strained economies. Neither Iran nor Iraq (when it can control its production) is likely to pay much attention to OPEC discipline on prices and quotas. Saudi Arabia, which has sometimes sacrificed its own domestic interests to shore up prices, faces a high domestic debt (75 percent of gross domestic product); an austerity budget; a burgeoning, youthful population unable to find acceptable jobs; and rising domestic unrest, indicating that in the future it will protect its market share and revenues.

Potential Flashpoints

Iraqi Military Threat

Although Iraq's military forces have been degraded by the Gulf War and sanctions, the United States still faces ground-force threats on the border between Iraq and both Kuwait and Saudi Arabia. Iraq lost at least 40 percent of its ground strength during the Gulf War and has had virtually no access to new weapons and technology since then. Nevertheless, Iraq still possesses a land force that is larger than and qualitatively superior to all the GCC states combined and Iran. With an active ground force of over 350,000 (and a reserve of 650,000), over 2,000 battle tanks, and 4,500 armored vehicles of various kinds, Iraq dwarfs its GCC neighbors. Saudi Arabia and Kuwait together have only 80,000 ground troops and slightly over 1,000 tanks. In the air, Saudi Arabia may be a better match for Iraq with 300 modern combat planes to Iraq's 316 aging aircraft. Since the Gulf War, Iraq has reorganized its army command structure and revived some of its military industries and can now repair major weaponry. Local industry can produce small arms and spare parts for its best (T­72) tanks, but even so, the remaining equipment is more thinly spread among units than in pre-Gulf War times.

Despite Iraq's substantial ground forces, there is some question of how well Iraq's military would perform in a conflict with the U.S. and its Gulf neighbors. Sanctions have greatly eroded its logistic and support capacity, while repeated purges of officers raise doubts about loyalty and morale, even in the more privileged Republican Guards. Lack of spare parts means that Iraq cannot easily undertake extended campaigns, and it has no high-tech equipment. Iraq has no navy and is highly vulnerable in air power and land based air defense. Among its 350 aircraft, as few as 80 may be serviceable with another 30 semi-serviceable. Iraq's air defense system has a low level of operational efficiency. In time, however, as sanctions ease, Iraq will use its additional resources to repair these deficiencies.

Iraq could threaten its neighbors with military actions of several sorts:

Iraqi Conquest of Kuwait

Despite Iraq's acceptance of a UN resolution acknowledging Kuwait's sovereignty, many Iraqis believe that Iraq has a justifiable claim to the country based on a legacy of Iraqi control over Kuwaiti territory for a brief period during the Ottoman Empire. Claims to Kuwait have been made by a long succession of Iraqi leaders and are unlikely to end. Many Iraqis, including Saddam Hussein, harbor revanchist sentiments against Kuwait and Saudi Arabia for their role in the Gulf War. Kuwait's oil policies are blamed for precipitating the war; Saudi Arabia cooperated with the West in the war effort and the subsequent buildup of the U.S. forward presence in the Gulf. The most important military operation monitoring southern Iraq, Operation Southern Watch, is based on Saudi soil. Iraqis consider this operation a major infringement of their sovereignty and will pressure their neighbors to discontinue Southern Watch.

A soldier cleans her M-16 at Camp Doha,Kuwait
during Operation Vigilant Warrior.

Even with Iraq's weaknesses, no combination of the Kuwaitis, Saudis and other Southern Gulf states could hold off a determined attack by Iraq. U.S. military planners estimate that, absent a Western military presence, Iraqi land forces could take Kuwait and the Eastern Province of Saudi Arabia in days. However, it is assumed that U.S. retaliation would levy unacceptable costs on Iraq. Even the modest U.S. presence in the northern Gulf would be unable to prevent the occupation of Kuwait, although the subsequent cost of such an action to Iraq and its regime should be high enough to preclude such an attempt. Over time, if Western readiness in the Gulf declines and Iraq's military capacity improves with an easing of sanctions, such an invasion will be more plausible.

Border Revision

Iraq could occupy territory in Kuwait along the border, such as the islands of Warba and Bubayan. Iraq accepted only grudgingly the border with Kuwait established by the United Nations after the Gulf War. The new border gives Kuwait a strip of territory previously controlled by Iraq, about half of Iraq's port city and naval base Umm Qasr, and the southern tip of the Rumailah oil field. Most Iraqis, especially those in the current government, resent these provisions and are likely to attempt to reverse them. Iraqis also resent their limited access to the Gulf--only 26 miles of Gulf shoreline. Iraq's main port, Basra, lies on the Shatt al-Arab River, shared with Iran. A second port, Umm Qasr, lies on an estuary, the Khor Abd Allah channel, which Kuwait shares. For years, Kuwait has refused to cede or lease to Iraq the islands of Warba and Bubayan, which control the entrance to this waterway. The absence of ports directly on the Gulf makes Iraq dependent on its neighbors for pipeline transport of its oil, a vulnerability it wants to rectify. Iraq will continue its efforts to expand its Gulf shoreline at Kuwait's expense.

Pressure on GCC States

Iraq has traditionally viewed itself as the eastern frontier of the Arab world, the major Arab balance against Iran, and, as such, the preeminent Arab Gulf power. While Iraq is currently too weak to assert this position forcefully, its aspirations will revive when its economic and political fortunes improve. Linked to these aspirations is Iraq's need for higher oil revenue. Of all the Gulf states, Iraq will have the greatest need for increased oil revenue to repair the ravages of the 1980s and 1990s. With an estimated future oil export potential of six million barrels per day, Iraq will be a sharp oil competitor when its oil embargo is lifted and could find itself in persistent conflict with Saudi Arabia over oil pricing and markets.

To put pressure on GCC states, Iraq could attempt to subvert or destabilize the governments of Saudi Arabia and Kuwait. It could also mobilize forces on Kuwait's borders to intimidate Kuwaiti and Saudi leaders. Countering such actions would raise the defense costs for GCC states and the U.S. and could strain the U.S.­GCC partnership. The attempt by the U.S. to move additional forces to the Gulf after Iraq's invasion of Irbil in August 1996 met with limited support from GCC states.

Threats to the U.S. Military Presence

Iraq also poses potential threats to the U.S. military presence in the region and to the personnel of various UN and allied missions. These include challenges to the UN inspectors monitoring Iraq's compliance with the WMD regime and attacks on U.S. personnel or the sabotage of U.S. facilities in Saudi Arabia or Kuwait.

While the most serious of these threats are highly unlikely because of their risks and costs for the Iraqi regime, even lesser threats can damage U.S. interests by causing a rise in oil prices, instability among allies, and possible damage to U.S. lives and assets. To meet plausible threats at the low end of the scale and deter less plausible but more serious challenges, a sustainable military presence is required. This presence must be both acceptable and affordable to local GCC allies.

Meeting this challenge will be a major task in managing Gulf security. A military presence that has too low a visibility to potential aggressors poses risks to deterrence; yet local perceptions of too high a visibility poses risks to GCC stability and may weaken the alliance. The challenge for the United States is to find the right mix and to lessen defense costs, possibly by seeking to spread the burden more equitably among allies, particularly those in Europe and East Asia, which benefit economically from Persian Gulf security.

Iranian Naval Interdiction in the Gulf

Iran could disrupt shipping in the Gulf, especially at chokepoints like the Strait of Hormuz and the shipping channels surrounding the disputed Gulf islands of Abu Musa and the two Tunbs. Iran has continued to exhibit hostility to U.S. interests in the Gulf and animosity toward some of its GCC neighbors.

Iran's conventional forces are still recuperating from the Iran-Iraq War. Iran has increased its active ground forces to about half a million with an additional 350,000 in the reserves; its tank force is just under 1,500; its armored vehicles number about 1,000. Efforts to improve its air force appear to have foundered on scarce resources. Some estimates put Iran's operational combat aircraft at only 175, most of them second and third generation.

However, Iran has focused its military upgrading on its naval and missile capability in the Gulf, where improvements have been significant. These assets now include three Russian Kilo-class submarines; 12 patrol boats with anti-ship cruise missiles; shore-based anti-ship missiles with ranges up to 20,000 meters; nine surface-to-air missile (SAM) sites with SA­5, SA­6, and HAWK missiles; and some 35 ballistic missile sites with over 400 SCUD Cs, Bs, and SS­8s. Iran's ballistic missiles are capable of reaching all of Bahrain, Kuwait, the UAE, Qatar, the Gulf coast of Saudi Arabia, and northern Oman. Iran has also acquired up to two thousand mines and has forty Boghammer boats capable of harassing shipping. These enhanced capabilities give Iran the capacity to interdict naval traffic and intimidate its Arab neighbors.

A number of situations could arise in which Iran enters into a conflict with the United States or its own Gulf neighbors:

Intimidation of GCC States into Reducing Military Cooperation with the United States

There is a national consensus in Iran that it should be the predominant political and military power in the Gulf. The Gulf has always been Iran's window on the outside world and its major artery of commerce. At the same time, Iran's revolutionary impetus has cooled but has not yet expired. Militant elements in Iran's leadership still espouse the export of Islamic ideology and support militant Islamist groups abroad, including dissident Shi'ah groups in GCC states such as Bahrain. These activities are designed to destabilize Sunni ruling groups that support the West and host various components of the U.S. forward presence.

Despite these goals, Iran is concerned over the U.S. military buildup in the Gulf. Much of that buildup has been designed to deter a potential land-based threat from Iraq, but in the increasingly charged atmosphere surrounding U.S.-Iranian relations, signals from both sides can be misinterpreted. Tehran increasingly views the military presence as an attempt to encircle Iran, possibly to topple the regime, and in some circles sees it as a provocation for war. Some of Iran's military preparations could be described as defensive, but they feed growing apprehensions about Iran's intentions in the Gulf.

Iran could use sabotage and terrorism, including attacks on U.S. personnel and facilities in GCC states, an increased Iranian military presence in the Gulf, and deniable sabotage of key GCC facilities, to intimidate GCC governments into reducing host-nation cooperation with the United States.

President Bill Clinton shakes hands
with M­1A1 Abrams tank crew deployed
at Tactical Assembly Area
Liberty, Kuwait.

Iran can be expected to seek actions with plausible deniability. Given the growing differences between the United States and its European allies over Iranian policy, coordinating a response to such actions could also be difficult.

Disputes between Iran and the UAE

Iran has a longstanding dispute with the UAE over the islands of Abu Musa and the two Tunbs, which lie athwart Gulf shipping channels. Iran has challenged a 1971 agreement with the UAE that provided for shared control of the islands and has been encroaching on UAE rights and enhancing Iranian armed forces on the islands. These include HAWK, SA­5 and SA­6 SAMS with a 90 km range, upgraded Silkworm surface-to-surface missiles, and an enhanced ground force presence. Threatened by these moves, the UAE has asked for international adjudication of the dispute and has been pressuring the United States to support its position. Meanwhile, militarization of the islands poses a potential threat to shipping channels in the Gulf.

Iran's military posture on Abu Musa could be directed at U.S. naval assets. Iran could use the islands to interdict traffic in sea lanes and to interfere with U.S. naval exercises. Missile emplacements, both on the islands and the Iranian mainland, are well positioned to stop traffic passing through narrow channels. Iran could continue to exert pressure on the UAE to cede control of the islands, creating a crisis. UAE leaders see their situation as similar to that of Kuwait before the Iraqi invasion. The UAE could become the focal point of a military clash with Iran that gradually draws in U.S. forces.

Interdiction of Naval Traffic through the Strait of Hormuz

Iran could mine the strait or create an incident in which a commercial vessel or a U.S. naval platform is sunk or damaged there. Permanent physical blockage of the strait is impossible but would not be necessary to stop or slow traffic. Fear of interdiction by mines or military attack could create panic. A rapid rise in insurance rates would contribute to this effect. Both factors would slow or halt normal commercial traffic, at least temporarily.

The Iranian capacity to interdict naval traffic in the Gulf is disturbing. Iran's stagnant economy and unresolved political difficulties make it unlikely that Iran would risk a full-scale military encounter with the United States. But under certain circumstances, Iran might be inclined to lash out, particularly if plausible denial were possible. Increased domestic political pressures might make that option more attractive. Iran's relative isolation, and Washington's growing impatience with Tehran's behavior, have led to more bellicose rhetoric and possible misinterpretation of events and signals by both sides. Under these circumstances, threats from Iran are likely to be ambiguous and difficult to predict; it may be even more difficult for Washington to arrive at a consensus with its allies on the appropriate response, if Iranian culpability cannot be clearly established.

Acquisition of WMD by Iran or Iraq

Iran and Iraq, both hostile to U.S. interests, are the key proliferators of WMD in the Gulf. Both have the indigenous potential to develop nuclear programs and to continue programs in chemical and biological weapons. Both have undertaken development of long- and short-range delivery systems, and Iran is importing these systems from China and North Korea. Development of nuclear weapons presents the most difficult challenge for both countries because of the costs involved, the difficulty of developing the technology domestically, and the likelihood of outside detection. For these reasons, both may turn in the short term to clandestine purchase of fissile material or weapons components. For both, the acquisition of chemical and biological weapons poses far fewer difficulties, as indicated in the chapter on proliferation.

Indigenous production of accurate delivery systems for nuclear weapons also poses a problem for these states. For both, therefore, the most likely nuclear scenario would involve acquiring a weapon from outside that could be delivered by a conventional platform or used in a terrorist attack. For the foreseeable future Iraq's situation will differ from Iran's since Iraq is under an intrusive inspection regime that will hinder attempts to develop WMD. The WMD status of both countries is discussed in the chapter on proliferation.

Potential uses and motives behind both states' acquisition of WMD are two. First is power and prestige. Both countries desire leverage against neighboring states in various political, economic, and military disputes. Second is defense, including against each other. In particular, both seek a deterrent to the kind of damage visited on Iraq in Operation Desert Storm.

In both countries, the use of nuclear and biological weapons is much less likely than their acquisition. Uses to which they might be put are:

Arabian Peninsula Conflict

Disputes between Arabian peninsula states are unlikely to lead to full-scale interstate war, but minor military clashes could draw in the United States as a mediator or a defender of U.S. interests. A small peninsula war could endanger U.S. military personnel and facilities and reduce or eliminate host-nation support in one or more countries. Numerous tensions among these states led to military clashes in the past, and they could do so again. Several causes are possible: border disputes, foreign policy differences, Saudi Arabia's role as peninsula hegemon, and tribal and family disputes.

U.S. Army tanks roll past a burning Iraqi tank.

No single issue is likely to lead to an interstate clash, but overlapping disputes among states could, in the absence of a strong mediating power, lead to military action. The most serious situation would be a clash between Saudi Arabia and Yemen. Yemeni claims on Saudi Arabia include significant desert oil-bearing areas and all of Asir province, the major agricultural area on the peninsula. While Saudi Arabia's military assets, especially its air power, now dwarf those of Yemen, the latter has battle-hardened troops accustomed to years of fighting. If Yemen develops substantial oil revenues and a more unified polity, it could pose a substantial military challenge to Saudi Arabia in the future.

A Bahrain-Qatar conflict that drew in Saudi Arabia is a second possible scenario for peninsula conflict. Relations between Saudi Arabia and Qatar are already severely strained by the increasingly independent GCC policy undertaken by Qatar's new Amir, who has consistently challenged Saudi leadership. With a deteriorating domestic situation in Bahrain, which could be exploited by Qatar, a clash cannot be ruled out, but Saudi Arabia's overwhelming advantage in arms, money, and resources should bring any such military encounter to a rapid close.

However, such conflicts would drain Saudi resources, already scarce; undermine the legitimacy of the Saudi ruling family, already under attack from Islamic opposition elements; and weaken Saudi domestic stability. If Saudi forces suffer reverses, as they might in a struggle with Yemen, the impact on regime legitimacy could be devastating. A clash involving Saudi Arabia and Qatar or Qatar and Bahrain could result in a collapse of the GCC and an end to joint GCC efforts as part of the defense of the Gulf. A military clash between two members, even if it did not involve the United States, would reduce even current cooperative efforts.

The United States trains and advises the militaries in various GCC states and helps maintain much of their military equipment. A serious military action in the peninsula could put some U.S. personnel and equipment at risk and might draw the United States into the conflict. The U.S. military might become a target by accident or design, and a loss of U.S. lives could raise demands in the United States for retaliatory action. At a minimum, such a clash could have negative consequences for continued U.S. access to local facilities in GCC states. The withdrawal of U.S. forces from one GCC state could unravel the network of U.S. access agreements with all GCC states, with serious consequences for the U.S. strategy and deterrent posture in the Gulf.

U.S. Interests and Approaches

Net Assessment

Recent events have weakened the two main U.S. antagonists in the Gulf--Iran and Iraq. Despite this shift in the military balance and an enhancement of the military capacity of the six GCC states, the GCC is still no match for either Iran or Iraq. To offset this military asymmetry, the U.S., with support from Western allies, has enhanced its military presence in or near the Gulf and is effectively acting as the chief deterrent to regional aggression.

Managing this Gulf security environment will be a major challenge for the United States. Underlying tensions among Gulf countries will keep the region volatile and conflict-prone. Contentious issues include a strong desire by Iran and Iraq to change the balance of power and reduce or eliminate the U.S. military presence; potential for a renewed arms race, including the acquisition of WMD; tensions among member states that could weaken or fragment the GCC; growing ethnic, sectarian, and Islamist opposition that could destabilize Gulf states; and continuing economic strains in Gulf states friendly to the U.S.

Over the next decade, the most likely threats to U.S. interests in the Gulf will be low level: attacks on U.S. facilities and personnel, attempts to destabilize regimes that support U.S. policy and host U.S. forces, and conflicts within and between GCC states that put U.S. defense strategy at risk. High-level threats to the U.S. and its GCC allies from Iran and Iraq are less likely because of the economic and military weakness of both countries and the array of international constraints they face. In time, these constraints are likely to weaken. These threats pose the highest risk to U.S. interests and must be addressed.

U.S. Interests

Access to Oil

The U.S. has a vital interest in unimpeded access to the oil resources of the Gulf at reasonable prices. Some 65 percent of the world's proven oil reserves lie in the region, which in 1996 supplied the United States with 19 percent of its needs, Western Europe with 24 percent, and Japan with 70 percent. Indications are that these figures will climb by 5 to 10 percent by the year 2000.

Oil import patterns vary markedly between the United States and its Group of Seven allies. Europe and Japan rely more heavily on Gulf oil and conduct high levels of commercial trade with the GCC, but the United States and the GCC will increasingly bear the defense burden for the region. This growing imbalance in roles will give the United States and the GCC a strong interest in having Europe and Japan share in the defense burden. In such a case, allies are likely to demand a greater say in defense policy and strategy toward the Gulf.

Access to Strategic Lines of Communication

Preventing naval interdiction of key waterways (e.g., the Suez Canal, the Bab al-Mandab Strait, and the Strait of Hormuz) is critical to the flow of oil and to free commercial traffic. The latter interest will grow as the global economy increases in importance. Overflight rights in the Middle East and the Persian Gulf--both connecting links between three continents: Europe, Africa, and Asia--are also critical to trade and to military deployments.

Balance of Power

The United States, through its forward presence, has become the major force preserving a balance of power in the Gulf favorable to Western interests. Until stable and friendlier governments emerge in Iran and Iraq, the United States will be responsible for containing and deterring those countries. Should a key country within the GCC, such as Saudi Arabia, fall prey to instability or come under a regime antipathetic to the West, the entire U.S. military and strategic posture in the Gulf would be in danger. The U.S. has an interest in sustaining its forward presence in the region as long as it is needed and in assuring access and host-nation support for its facilities, at costs acceptable to itself and to its GCC allies.

U.S. Approach

The U.S. Military Presence

The United States has increased its access and its forward presence in the Gulf since before the Gulf War by trying to keep its footprint to a minimum and maximizing its strategic agility and power projection. At the end of 1996, U.S. forces there included a naval component (organized as the Fifth Fleet) under a Naval Forces Command headquartered in Bahrain. This force regularly includes a battle carrier group and other naval assets; a maritime intercept operation enforcing the UN sanctions regime on Iraq; and a Marine Expeditionary Force with pre-positioned equipment in the Gulf. The Air Force has an air wing conducting Operation Southern Watch in southern Iraq, under the command of a Joint Task Force in the Gulf. For deterrence, the United States has forward-deployed Patriot batteries and special operations teams. Although the United States has no permanent ground troops stationed in the Gulf, by the end of the decade it may have pre-positioned equipment for five brigades. Ashore, there are three sets for heavy Army brigades, one each in Kuwait and Qatar, and discussions are underway about the location for a third set. Afloat near Diego Garcia in the Indian Ocean are already 20 ships, which contain among other things equipment for another Army brigade as well as a Marine Expeditionary Force (MEF) Forward, which is somewhat larger than an Army brigade set.

B­52 bombers conduct live bombing
runs in Kuwait, during Operation
Vigilant Warrior, November 1994.

The United States has also increased its exercises in the Gulf, although many of these are small in scale. Through security assistance and training programs for military forces in the Gulf and through sales of U.S. equipment, the United States has greatly improved its ability to mount a defense.

The challenge for the U.S. is to manage its security relationship with the GCC--including its forward presence--in a manner that deters adversaries without undue costs and risks for Gulf allies. To do so, the U.S. must preserve a balance between the need for a visible deterrent in the Gulf and sensitivity to domestic concerns of GCC states. Too much visibility raises the risk of destabilizing host nations and reducing access. Too little raises the risk that potential adversaries will not be deterred.

Dual Containment

The dual containment strategy is an outgrowth of the Gulf War. The previous U.S. policy of attempting to maintain a balance of power between Iran and Iraq collapsed when Iraq invaded Kuwait. Dual containment reflects a post-Gulf War policy designed to contain both Iran and Iraq, using the instruments of military presence to deter aggression and economic sanctions to induce either a change of behavior (Iran and Iraq) or a change of government (Iraq). Diplomatic efforts have also been made to isolate both regimes, with more success in Iraq than Iran. Containment of Iraq is much more stringent and internationally acceptable. It involves enforcing no-fly zones in the north and south of the country; an embargo on military sales and oil exports; and tight trade restrictions. U.S. legislation prohibits U.S. trade and investment in Iran and the U.S. has attempted to extend that legislation to limit non-U.S. investment in Iran's oil and gas industry. These efforts, opposed by some G­7 allies, are designed to raise the costs to Iran of pursuing unacceptable behavior, such as support for terrorism. While deterrence has succeeded in preventing aggression, a change of behavior in both countries has been unacceptably slow on most issues of concern to the U.S.

The dual containment strategy faces several challenges. First, it is not entirely satisfactory to U.S. partners because it implies equal treatment for two countries with different political dynamics and posing different kinds of threat. Moreover, it is not clear that a stringent containment policy can be maintained over time. Some European and Gulf allies would prefer the use of dialogue and engagement--especially commercial engagement--in Iran, believing this would moderate Iranian policy and tie that country to the West. Commercial interests in Europe and the U.S. are eager to do business in both countries. Periodic military responses from the U.S. to challenges from Iraq, such as the military buildup in the Gulf in late summer 1996 after Saddam's incursion in the north of Iraq, put economic and political stress on some GCC states. Iran and Iraq's neighbors in the GCC fear as well a future backlash at home from too much isolation of the two regimes. The U.S., emphasizing its security role, prefers increasingly tough sanctions on Iran and continued constraints on Iraq. The costs of the dual containment strategy on alliance cohesion will have to be balanced against its effectiveness in deterring aggression in the Gulf.

There are also domestic economic and political costs to dual containment in the U.S. and the GCC. As Saudi Arabia and other GCC states face rising economic difficulties and domestic opposition, the U.S. may find GCC financial and political support for the forward presence reduced. In the U.S., incidents such as the Khobar bombing and the need for budget cuts may raise questions about the costs and benefits of the policy. The challenge will be to sustain a suitable force presence that is affordable and acceptable to the local population in the Gulf. The U.S. may also need to consider whether both the burdens and the responsibility for Gulf security may be more equitably shared.

Dealing with GCC Partners

A third approach for the U.S. is to improve long term stability of friendly regimes in the Gulf by encouraging GCC states to address the underlying causes of domestic tensions. This approach favors an evolution to more economically viable and politically accountable systems capable of meeting the demands and expectations of their growing, youthful populations. This need not be construed as importing Western style democracy or intrusive interference in domestic politics, but in finding ways to support indigenous reform. It will also mean assuring that the U.S. military presence and the policy of dual containment are pursued in ways that do not destabilize critical GCC partners.

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