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The Impact of Energy on East-West Trade: Retrospect and Prospects

  • Jochen Bethkenhagen
Part of the East-West European Economic Interaction book series (EEIIWP)

Abstract

Because of the location of natural resources, East-West energy trade is a one-way street from East to West. The Soviet Union is the dominant supplier, having taken the leading position among the energy-producing countries: in 1974 it became the most important oil producer and in 1982 the most important natural gas producer (1) in the world. In 1982, 31 per cent of the world’s natural gas and 23 per cent of the world’s oil was produced in the Soviet Union. Against this background, it is not surprising that, in 1981, 80 per cent of the total value of all energy exports from East to West came from the Soviet Union alone. Among the various energy sources, oil (crude oil and petroleum products) holds top position among Soviet exports as well. Coal exports, which comprise only 2 per cent (1982) of total value, will therefore be neglected in the following discussion (see Table 8.1).

Keywords

World Market Price Clearing Price CMEA Country Energy Export Joint Economic Committee 
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References

  1. (1).
    See L’Echo de la Bourse, July 1, 1983Google Scholar
  2. (2).
    See Werner Gumpel, “Sowjetunion: Erdöl und Nahostpolitik” in Außenpolitik, No. 11/1971, p. 676; István Dobozi, “Die Energieträger in der Wirtschaft des RGW”, (Hungarian), in Valöság, Budapest, No. 1/1973, p. 18 ff; Central Intelligence Agency, Prospects for Soviet Oil Production, Washington D.C., July 1977. Since one is not always granted luck in prophecy, it may be mentioned that the author has consistently doubted these theses. See Jochen Bethkenhagen, “Bedeutung und Möglichkeiten des Ost-West-Handels mit Energierohstoffen,” DIW Sonderhefte, No. 104/1975, p. 252 f. and “UdSSR vor Erdöldefizit?” in DIW Wochenbericht, No. 50/1977.Google Scholar
  3. (3).
    The rise recorded by OECD of 33 per cent for 1982 over the previous year (52 million tons) to 69 million tons contradicts the Soviet figures in TRs. If one takes these figures as base, an estimated value of 54 million tons (1981) and 66 million tons (1982) is derived.Google Scholar
  4. (4).
    See also John B. Hanningan and Carl H. McMillan, “The Soviet-West European Energy Relationship: Implications of the Shift from Oil to Gas”, unpublished Working Paper, Ottawa, May 1983, p. 27 ff.Google Scholar
  5. (5).
    See Horst Lambrecht, “Der Innerdeutsche Handel — ein Güteraustausch im Spannungsfeld von Politik und Wirtschaft,” in Aus Politik und Zeitgeschichte, Beilage zur Wochenzeitung Das Parlament, October 9, 1982.Google Scholar
  6. (6).
    See Antony Scanlan, “Die künftige Rolle von Öl und Erdgas in der UdSSR,” in Energiewirtschaftliche Tagesfragen, No. 7/1983, p. 468.Google Scholar
  7. (7).
    On import policy, see Jonathan P. Stern, “CMEA Oil Acquisition Policy in the Middle East and the Gulf: the Search for Economic and Political Strategies,” in Joint Economic Committee, US Congress, Soviet Economy in the 1980s: Problems and Prospects, Part 1, Washington D.C. 1983, p. 414 ff.Google Scholar
  8. (8).
    See Dieter Schmitt and Heinz Jürgen Schürmann, “Die Entspannung auf den Ölmärkten darf die Energiepolitiker nicht einlullen,” Handelsblatt, May 3, 1983.Google Scholar
  9. (9).
    See Jochen Bethkenhagen, “Die Auswirkungen der Ölpreissenkung auf die UdSSR und die übrigen RGW-Länder,” in Bundesinstitut für ostwissenschaftliche und internationale Studien (Hrsg.), Aktuelle Analysen, March 23, 1983.Google Scholar
  10. (10).
    On the various positions, see Hans-Dieter Jacobsen, Die Ost-West Wirtschaftsbeziehungen als deutsch-amerikanisches Problem, Ebenhausen June 1983;Google Scholar
  11. Angela E. Stent, “Soviet Energy and Western Europe”, The Washington Papers/90, New York 1982;Google Scholar
  12. R. Bresnick and J. P. Hardt, “Soviet Economic Policy Toward West Europe,” in John P. Hardt (Ed.), Energy in Soviet Policy, Joint Economic Committee Print, Washington, June 1981, p. 84 ff.Google Scholar
  13. (11).
    Transcript of President Reagan’s speech on Soviet Union, The New York Times, November 14, 1982.Google Scholar
  14. (12).
    For extensive discussion of these arguments, see Jochen Bethkenhagen, “Erdgas aus der UdSSR,” in DIW Wochenbericht No. 14/1981. Jochen Bethkenhagen and Heinrich Machowski, “Ost-West-Wirtschaftsbeziehungen: Weiterentwicklung oder Restriktion?” in Aus Politik und Zeitgeschichte, Beilage zur Wochenzeitung Das Parlament, April 2, 1983. The question of dependence has also been studied by the Common Market Commission. They concluded that a significant interruption in supply (of at least 25 per cent during six consecutive months) can be met and would entail minimal effects on final consumption. See EC Commission (82) 653 final, Brussels, October 15, 1982.Google Scholar
  15. (13).
    Opposing claims are published from time to time. See “Pipeline Pains,” Wall Street Journal, March 15, 1983; “Europe’s Pipeline Folly,” Wall Street Journal, April 28, 1983; “Politics and Trade,” Wall Street Journal, June 3, 1983.Google Scholar
  16. (14).
    A further consequence is that the proportion of Soviet natural gas in consumption of the importing countries will be higher than originally expected for 1990. In the Federal Republic of Germany the share could be around 40 per cent.Google Scholar
  17. (15).
    See Ed. A. Hewett, “Near-Term Prospects for the Soviet Natural Gas Industry, and the Implications for East-West Trade,” in Joint Economic Committee, op. cit., p. 408 ff.Google Scholar
  18. (16).
    See Jochen Bethkenhagen and Heinrich Machowski, “Entwicklung und Struktur des deutschsowjetischen Handels —Seine Bedeutung für die Volkswirtschaften der Bundesrepublik Deutschland und der Sowjetunion,” DIW Sonderheft, No. 132/1982, p. 41.Google Scholar
  19. (17).
    See Office of Technology Assessment, Technology and Soviet Energy Availability, Washington D.C. 1981, p. 10.Google Scholar
  20. (18).
    According to a New York Times report, the American State Department and Department of Commerce have spoken out in favour of relaxing restraints on the export of oil and gas equipment to the USSR.Google Scholar
  21. (19).
    See S. Jatrov and A. Pjatkin, “Die Effektivität der Nutzung von Brennstoff- und Energieressourcen” (in Russian), in Planovoye khozyaystvo, No. 2/1979, p. 16.Google Scholar

Copyright information

© Wiener Institut für Internationale Wirtschaftsvergleiche (WIIW) / The Vienna Institute for Comparative Economic Studies 1985

Authors and Affiliations

  • Jochen Bethkenhagen
    • 1
  1. 1.Deutsches Institut für WirtschaftsforschungBerlin WestGermany

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