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It only borders one nation, and that is Spain who like Portugal quite a lto and so are easy to become allies with.
Portugal is not far from the Strait of Gibralter and so they are able to lock this down.
Portugal starts off with a very small production capacity of 1 Land, 2 Sea and 1 Air factories as well as a very outdated armed forces with very little modern equipment.
The main role of the Portugeuse Navy can be seen as blocking off the Strait of Gibralter from Soviet shipping, which is a task that can be done reltively easily for Portugal, despite the small size of its Navy and its production cap.