Iran–Iraq War
U.S. embargo

A key element of U.S. political–military and energy–economic planning occurred in early 1983. The Iran–Iraq war had been going on for three years and there were significant casualties on both sides, reaching hundreds of thousands. Within the Reagan National Security Council concern was growing that the war could spread beyond the boundaries of the two belligerents. A National Security Planning Group meeting was called chaired by Vice President George Bush to review U.S. options. It was determined that there was a high likelihood that the conflict would spread into Saudi Arabia and other Gulf states, but that the United States had little capability to defend the region.

It was determined that a prolonged war in the region would induce much higher oil prices and threaten the fragile world recovery which was just beginning to gain momentum. On 22 May 1984, President Reagan was briefed on the project conclusions in the Oval Office by William Flynn Martin who had served as the head of the NSC staff that organized the study. The full declassified presentation can be seen here.

The conclusions were threefold: firstly, oil stocks needed to be increased among members of the International Energy Agency and, if necessary, released early in the event of oil market disruption; second, the United States needed to reinforce the security of friendly Arab states in the region; and thirdly, an embargo should be placed on sales of military equipment to Iran and Iraq. The plan was approved by the President and later affirmed by the G-7 leaders headed by Margaret Thatcher in the London Summit of 1984.
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