A Concise History of the Middle East

The Struggle for Persian Gulf Supremacy ••• 379

of its luster (and power) when the US attempt to rescue the hostages failed
in April 1980 and when Iraq invaded Iran that September. Once Iran found
itself at war with Iraq and needed more money and military spare parts,
the American hostages were no longer worth keeping. By this time, the
shah had died in Cairo. Following patient mediation by Algerian diplo¬
mats, Iran agreed to free its remaining fifty-two captives (eleven of the
hostages had been released earlier) in return for releasing its frozen assets,
from which would be deducted an escrow fund to cover claims made
against the Iranian government (the amount returned was about $8 bil¬
lion), and a pro forma US promise not to meddle in its internal affairs.
Iran's fears of dealing with President-elect Reagan may have forced this set¬
tlement. No US administration would help Iran to recover the assets of the
late shah's family outside the country.
Once the hostages were freed, Iran faded from Americans' minds. In
1981 political unrest intensified throughout the Middle East; bombs and
bullets randomly killed ayatollahs, presidents, prime ministers, and party
leaders. Iran's elected president, Abol-Hasan Bani-Sadr, won some popu¬
larity by visiting Iranian forces fighting against Iraq, but he was gradually
shorn of his power. Finally forced to resign, he went into exile in France,
where he joined the growing number of Iranians plotting to overthrow the
ayatollah. The much-feared Soviet invasion never came, despite Iranian aid
to the Afghan rebels. Rather, Moscow sent arms and advisers to the new
regime, which consolidated its power but became as repressive as the late
shah's government. By August 1979 the government had set up an auxiliary
army, the Islamic Revolutionary Guard Corps, which trained Muslim (es¬
pecially Shi'i) militants from many countries in the techniques of insur¬
gency. The results of their labors would be seen in various violent incidents
during the 1980s, notably in Lebanon and in some of the Gulf states.

THE STRUGGLE FOR PERSIAN GULF SUPREMACY

During the 1970s most of the oil bought by noncommunist industrial
countries came from states surrounding the Persian Gulf: Oman, the
United Arab Emirates, Qatar, Bahrain, Saudi Arabia, Kuwait, Iraq, and Iran
(see Map 19.1). Huge tankers carried the oil through the Straits of Hormuz
and the Gulf of Oman into the Arabian Sea and the Indian Ocean. Even
when Iran, OPEC's second-greatest oil producer up to 1978, cut its output
during the revolution, the slack was soon taken up by Saudi Arabia and its
neighbors. The revolution also ended Iran's role, taken over from Britain, as
the policeman of the Persian Gulf area. (Hereafter, we refer to the Persian