The Dilemmas of Soviet Oil Policy

The Soviet Union has not had to spend hard currency on oil imports as other industrialized countries have since the 1973 oil embargo. It is well endowed with petroleum and, since 1973, has become the largest producer of petroleum and the third largest exporter. Soviet officials realize that their enormous supply is finite, so decisions must be made on whether to continue producing at the massive rate or curtail production; saving some for future generations. Also, choices must be made on how much to export and how much to consume at home; how much should be set aside for Eastern Europe, which pays in soft currency; or how much should be diverted to its hard-currency customers. The Soviet resolution of these issues will have important policy implications for the U.S. and her hard-currency allies, OPEC, and Eastern Europe. (MCW)