A mass strike by oilfield workers cut deeply into Iran's production and export of oil yesterday and troops moved into position around key oil installations to guard against sabotage.
Informed sources said production was down to 2 million barrels a day, compared to recent output of more than 5.3 million barrels.
The strike also affected refinery operations, sharply reducing output at the Abadan refinery, where normal production is 600,000 barrels daily, and cut into exports of natural gas to the Soviet Union.
Informed sources put the cost of lost oil revenues at $60 million a day. Iran is the world's second largest oil exporter and its annual income from this source is $22 billion.
Information Minister Mohammed-Reza Ameli-Tehran said the government maintained 60 percent of its daily oil export quota of 5 million barrels yesterday. He did not say whether he expects exports to continue.
Because of present world oversupply, the sudden drop in Iranian exports may not have a severe short-term effect, but prolonged disruption of exports could have a serious impact on the world oil industry at a time when oil companies are stocking up for winter and in anticipation of crude oil price increases that are expected next year.
The strike followed a breakdown in negotiations between the National Iranian Oil Co. chairman, Hushang Ansary, and workers calling for an end to martial law and a release of political prisoners as well as higher wages and allowances.
The loss of oil income, which accounts for about three fourths of the government's resources, will be a severe blow to the government of prime minister Jaafar Sham-Emami. His Cabinet is now revising the budget for the year ending next March to take account of costly pay settlements already made with government workers in an attempt to buy peace. These settlements were expected to result in reductions and deferrals in development projects and in arms orders from the United States and Europe.
These economic difficulties are putting considerable pressure on Sharif-Emami's government, already staggering under the strain of widespread street violence and civil disorders. The prime minister survived his third vote of confidence in parliament yesterday, 176-35, with 7 abstentions.
Few observers think the present government can function in more than a caretaker capacity, but there is widespread concern that any replacement would be a military regime, and that its installation would result in further loss of life.
The confidence vote came after a day of violence in the provinces. Reports in the press said 36 persons had been killed.
Sharif-Emami condemned the strike as "an act of treason" and told parliament the walkout had created "a dangerous situation" that could seriously affect the country's economy.
"Those who provoke the oil company workers to strike should know that the halt in the export of oil will have dangerous repercussions for the entire nation," he said.
The Cabinet met in emergency session last night. A government source who declined to be identified said an emergency plan was drawn up last week to enable the country to maintain 60 percent of its oil exports in the event of a crisis in the industry.
It was not clear whether the government was considering full-scale military intervention to run the oil wells and load tankers. The state-run news agency Pars said only that the troops acted after the government was told saboteurs had threatened to damage installations.
In the worst outbreak of violence Monday, clashes between pro- and anti-government demonstrators resulted in a reported 25 deaths. In a bizarre incident, a tribal chief and member of parliament led a large body of supporters into a small southwestern town, scene of recent antigovernment demonstrations, and attacked the inhabitants and their property. Eleven people were reported to have died.
While faced with this steady escalation of defiance to government authority. Sharif-Emami has also had to contend with further defections from his Cabinet. The resignations yesterday of Justic Minister Mohammed Baheri and Minister of State Manuchehr Azmum meant recruiting ministers for the third time in two months, Azmum plans to set up a political party of his own.
In an attempt to conciliate the opposition the government last week started releasing political prisoners, whose incarceration has been one of the most bitter and long standing grievances in Iran. About 1,120 were to be released under an amnesty marking the shah's birthday last week and more releases were promised. It was also announced yesterday that 34 senior officers of the much-feared security police, SAVAK, were to be purged.
Despite the effort to cultivate a new image, however, the credibility of Sharif-Emami's government with the public remains low.