Soviet Oil and the Third World

Abstract

Whenever we talk about oil we usually think of the Middle East. This is only natural; the Middle East accounts for a third of the world’s crude oil production, and for three-fifths of world oil exports, in addition to owning more than half of the world’s proved oil resources.¹ But the Middle East is not a country, it is a region containing a group of countries. If we take individual countries into account, the United States and the Soviet Union emerge as the two largest oil-producing nations of the world.² Ever since the birth of the modern petroleum industry in the 1850s these two countries have almost always been at the top of the league of the oil-producing countries.³ What differentiates them is their high rate of self-consumption (unlike the Middle East which despite its enormous oil wealth consumes only 3 per cent of world oil production), which leaves no exportable surplus — in fact, a growing deficit in the case of the United States, and a comparatively small surplus in the case of the USSR. Hence, their impact on trade in oil is much less than proportionate to their production.