IRAN: The Shah's Fight for Survival

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Fearing more bloodshed, an estimated 1 million of Tehran's 4.5 million population fled the city to the safety of the provinces. Strikes continued to cripple the economy. Many shops stayed closed, even in areas of Tehran where there was no fighting. Thousands of banks throughout the country have been destroyed by anti-Shah rioters, who attacked the institutions as symbols of an alien economic presence in Iran. Most banks assured people with savings accounts that records had been made on computer tape and that they would not lose their money. With bus drivers on strike, taxi drivers doubled and tripled their fares, but driving was hardly easy. Though there were no traffic jams for a change, gasoline shortages caused long queues at service stations. After a brief hiatus of total freedom the week before, Tehran's seven daily newspapers stopped publishing rather than submit to censorship reimposed by the military regime.

The new government failed to lure the country's 67,000 petroleum workers back to the oilfields and refineries. The oilworkers, who are envied by many Iranians as the coddled elite of the country's labor force, spurned a 40% wage boost. They stayed out on strike, demanding such reforms as an end to martial law, the release of all political prisoners, replacement of foreign workers holding jobs that could be done by Iranians, and expulsion of the American and European consortium that helps run the National Iranian Oil Co. Boasted a militant student leader last week: "With the oilworkers on our side, we found new confidence. Nothing could better illustrate how much the Shah's position has been weakened."

Settling that strike is the Shah's most crucial challenge. Without the oil revenues that bring in at least $20 billion a year, Iran's economy will surely collapse. A skeleton force of 5,500 executives and technicians last week managed to keep the oil flowing at around 1.5 million bbl. per day, enough for the country's internal consumption. But that was far short of Iran's export level of 6 million bbl. per day. The pinch has not yet been felt abroad because of shipments already at sea. Then, too, countries like Israel and South Africa, which depend heavily on Iranian crude, have long since anticipated this kind of emergency by stockpiling up to a year's supply of oil.

Part of Iran's reduced supplies could also be offset by tapping fields in Saudi Arabia, Kuwait and Abu Dhabi, which have reduced their output over the past two years because of a worldwide production surplus. But the Iranian slowdown, if it continues for long, will almost certainly mean higher oil prices for the U.S. and Europe.