Arab Gulf States Fearful as Sea War Escalates

MANAMA, Bahrain —  As Iraq and Iran gear up for what many predict will be a climactic battle on land, a sharp escalation of fighting is also taking place in the sea lanes of the Persian Gulf, through which much of the world’s oil passes.

Both Iran and Iraq have stepped up their attacks on shipping in the gulf in an effort to bring economic ruin to the other side--Iraq by destroying Iran’s oil export capability and Iran by threatening the Arab states in the gulf region that provide most of Iraq’s military budget.

One result, according to a Western diplomat here, has been a “major escalation of tension” in the past month in the tiny gulf states--Kuwait, Qatar, Oman, Bahrain and the United Arab Emirates. “Anxiety is quickly turning into something approaching panic,” he said.

Economies Collapsing

According to diplomats and Arab analysts, the attempt at economic strangulation may force a showdown battle in the Iran-Iraq War as both sides grapple with collapsing economies that prevent them from sustaining a long-term fight.

The war entered its seventh year last week, with Iran reportedly massing 650,000 troops, most of them poorly trained volunteers, along a 600-mile front in what many analysts see as the prelude to a major attack. Iraq, which is much better equipped, has reportedly put 300,000 troops in fixed defensive positions to repel the expected onslaught.

In Washington, Reagan Administration officials said last week that they are convinced a major offensive is imminent and that it may open what one State Department analyst called “a new phase in the war.”

U.S. intelligence agencies have confirmed reports that Iran has moved troops and equipment to the front and virtually emptied its arsenals of spare parts, the officials said.

“They have troops massing along both the southern and central fronts,” a State Department official said, speaking on condition that he not be identified. “The army is mostly in the center, the Revolutionary Guard in the south. The consensus here is that the attack is probably going to come in both places.”

Meanwhile, according to diplomats here, the past month has seen two significant developments in the fighting: bold attacks by Iran against shipping near the gulf states and a major expansion of targets by Iraq.

In the first nine months of the year, 73 ships have been attacked, compared to about 40 last year and about the same number the year before, according to shipping industry sources.

Shuttle Service

In the past, Iraq has concentrated its attacks on Iran’s Kharg Island oil terminal and ships nearby. In mid-September, Iraqi warplanes reduced loading facilities at the Kharg terminal to those on one jetty, but oil was still believed to be flowing.

In an effort to escape the Iraqi warplanes, Iran had set up a shuttle service to move crude oil by sea from the Kharg Island terminal to Sirri Island, about 350 miles further down the gulf. In that way, it was thought, foreign tankers could take on oil out of range of Iraqi warplanes, saving huge insurance premiums. But last month Iraqi planes attacked Sirri Island, setting the terminal ablaze and damaging three tankers.

According to Western diplomats, the Iraqis were able to reach Sirri by using recently acquired French Mirage F1-E fighter-bombers that were refueled in the air with Soviet-supplied AN-12 tanker planes.

The Iraqis are also believed to be equipped with laser-guided “smart bombs,” which have greatly increased the accuracy of their bombing. In the past, Iraqi pilots were regularly accused of cowardice for dumping their bombs at high altitude, beyond the range of anti-aircraft weapons.

Economic Warfare

The Iraqi president, Saddam Hussein, acknowledged that the recent raids are part of a new strategy aimed at crippling Iran’s economy, a tacit admission that the war could not be ended on the battlefield alone.

“We will be forced to destroy the structure of their economy so that their hungry people will press them to end the war,” Saddam said the other day.

Iran is now believed to be shuttling oil from Kharg Island to Larak Island, another 120 miles down the gulf from Sirri and virtually in the Strait of Hormuz. Iran has frequently threatened to close the strait if it is denied free access to the gulf.

On Aug. 21, a 160,000-ton Kuwaiti-registered tanker, the Al Funtes, was attacked at night by a gunboat presumed to be Iranian about 35 miles off the coast of Saudi Arabia.

In the past, Iran has used a combination of jet aircraft and helicopter gunships equipped with missiles--both provided by the United States before the 1979 revolution--to attack shipping in the gulf. Never before had the Iranians ventured out with their navy to attack shipping or carried out a raid at night, and both developments caused concern along the gulf.

“Such actions and attacks will only raise tension in the region,” the Kuwaiti Cabinet said in a statement.

Cites International Law

As recently as Sept. 21, Iranian gunboats halted eight foreign vessels in the Strait of Hormuz, the narrow mouth of the Persian Gulf, searched them and then released them.

Iran maintains that under international law, it has the right to search cargo vessels in the gulf that may be carrying war material to Iraq. Since the beginning of the war, Iraq has received considerable cargo through Kuwait.

On Sept. 23, Iranian helicopters attacked a British cargo ship, the 68,700-ton Pawnee, in the gulf despite the presence of a British warship in the area.

Fears have been expressed that the United States might be drawn into the conflict because of repeated pledges by Washington to keep the gulf open to shipping. The United States maintains a Middle East naval force in the Persian Gulf--by virtue of a commercial base arrangement with Bahrain--and the five ships that make up this force have frequently warned Iranian planes and gunboats to steer clear of American shipping.

“The United States is following the Persian Gulf War with concern and wants it to come to an end,” Anthony Quainton, the U.S. ambassador to Kuwait, told a news conference last week. “. . . It also wants a halt to interceptions of shipping in the waterway.”

Support From Bahrain

In an interview with The Times last week, the Emir of Bahrain, Sheik Isa ibn Salman al Khalifa, warmly embraced the U.S. presence in the area, a rare expression of support for Washington’s Mideast policy from an Arab country.

“We are friends,” he said. “We will stand with our friend the United States and hope they will stand with us.”

Kuwait is so alarmed over the situation that it has sent officials on a tour of the region seeking a peace plan. One proposal calls for the United Nations to enforce a cease-fire, but so far the search has not been successful.

In recent days, Iraq has reported repeated Iranian thrusts across the Hawizah marshes in the central sector of the land front. Iran has concentrated hundreds of thousands of soldiers and Revolutionary Guards in the area, and it is likely to be the site of the next major battle between the two countries.

Although Iran continues to hint that an offensive is imminent, Western analysts say the Iranians may be waiting for increased air cover.

Iraq has virtual command of the skies in the area, but Iran has reportedly taken delivery of 50 Xian J-7 warplanes from China. The Chinese plane is said to be similar in design to the Soviet MIG-21. It is not known whether China has trained Iranian pilots for the planes or how long such training might take. The Chinese have denied supplying the aircraft.

Times staff writer Doyle McManus, in Washington, contributed to this article.