Soviet oil exports still going strong
The next time you fill your car with gasoline or pay your home heating bill, think Russian. Despite CIA predictions six years ago that the Soviet Union would be forced to import oil by 1985, Moscow boosted its exports to the West to record amounts last year and has moved even higher so far this year.Skip to next paragraph
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From the Western consumer's point of view, this flood of Soviet oil is both a good influence on prices - and a bad one.
On the one hand, record Soviet exports of oil help keep world supply ahead of demand and help keep prices from shooting even higher than their currently firm levels, analysts say.
On the other hand, Moscow watches the market intently and shares the goal of OPEC (Organization of Petroleum Exporting Countries) of preventing a slide in prices that would cut income to all producers.
Although the Soviet Union may not be able to sustain its current level of exports beyond the end of this decade, analysts agree that Moscow remains a major presence on the world energy scene.
''The CIA just got it wrong,'' comments Jonathan Stern, London-based consultant who works with the Royal Institute of International Affairs at Chatham House. ''The Soviets have managed to conserve more than the CIA expected , partly because their economic growth rate has fallen. They have managed to use more natural gas and emphasize their nuclear power program.
''I don't think the Soviets can go on exporting like this for very many years - but they still need hard currency to buy grain and high technology.''
According to Mr. Stern, oil sales accounted for just over 60 percent of Soviet hard currency earnings in 1982 - ''a very high figure indeed,'' he said in an interview.
The CIA estimated in 1977 that the Soviet bloc would be importing 3.5 million to 4.5 million barrels of oil a day by 1985. Instead, only two years short of 1985, Moscow is currently exporting between 1.5 million and 2 million barrels a day, far more than other non-OPEC countries, including Mexico and North Sea producers Britain and Norway.
So fast did Soviet exports rise last year - by about 40 percent - that the 13 member states of OPEC finally had to switch signals. After years of virtually ignoring the Soviets, OPEC has now included them in a wider effort to open a dialogue on maintaining prices and limiting production with major non-OPEC producers.
First, OPEC sent Algerian Energy Minister Belkacem Nabi to Moscow to see if the Soviets were interested in informal cooper-ation. Moscow has no intention of limiting its own freedom of action on prices by cooperating with OPEC or anyone else, analysts in London say. But for the moment its need for hard currency aligns it with OPEC's aims.
Then OPEC chose Helsinki, next door to the Soviet Union, as the site of its mid-year ministers meeting starting today. A number of analysts see this as another gesture to the Russians, who watch all events in Finland with the closest attention.
In fact, although the Soviets retain freedom of action on prices, they have no objection to talking to OPEC, whose members are influential in the third world, which Moscow wants to influence against the US and China.
The Soviet Union remains by far the largest oil producer in the world, though behind Saudi Arabia as an exporter.
In 1982 overall Soviet production reached 614 million tons, or 12.28 million barrels a day. Planned production for this year is slightly higher - 619 million tons, or 12.38 million b.p.d. - with all the increase coming from giant western Siberian fields.
The increase is small, but the Soviets have been able to boost exports dramatically by using less oil at home.
''The CIA never expected that Soviet consumption would flatten,'' says another London-based analyst, Tony Parisi of Petroleum Intelligence Weekly.
Mr. Stern points out that Soviet passenger car output has not grown nearly as much as expected, providing another area for oil savings.
In addition, no new oil-fired power stations are supposed to be built now. All new ones are to be driven by coal or nuclear power.
Mr. Stern sees recent Soviet exports reaching 1.6 million b.p.d., while Saudi Oil Minister Sheikh Ahmad Zaki Yamani puts the figure higher, at 1.9 million b.p.d. Rotterdam spot market traders think the total could not be as high as 1.9 million b.p.d.
Analysts say the Soviets had to sell a lot of oil earlier this year for several reasons. It was caught in a squeeze by world bankers on its own short-term debt obligations because of problems across Eastern Europe.
Moscow also felt it necessary to step in to prevent Warsaw from defaulting on Polish hard-currency debts.
Meanwhile, Soviet oil exports could begin to tail off toward the end of the decade if economic demand picks up domestically and overall production levels off.
Moscow is a shrewd trader, however, and carefully gears its prices to bring in maximum revenue with the least long-term weakening of prices.
It was one of the first major producers to see the trend in February this year and cut its Urals crude oil way below the then OPEC reference price of $34 a barrel.
As the market firmed after the London OPEC conference, the Soviets boosted spot prices by 50 cents a barrel at the end of April.
Analysts agree that the Soviets remain a potential source of disruption in the market - but see Soviet interest lying in maintaining stability at a time of low world demand.