ABSTRACT
The first thing to point out is that, even with its problems, the Soviet union is the world's largest producer of energy. Those who fail to study Soviet energy capabilities and intentions, even when the Soviet Union seems to be having some difficulties, run some serious risks. Perhaps this fact was most vividly demonstrated in 1981-1982, when the Soviet Union's oil traders, as much as anyone, were responsible for the price cutting that brought down world prices. To appreciate Soviet problems in the energy sector, must examine how the Soviet energy balance has changed over the years. One sometimes forgets, however, that there are two energy balances— one for consumption and one for production. Given the critical importance of energy production, the Soviets must do all they can to correct the problems that have arisen. The challenges in the petroleum industry are many, and for the most part conditions seem to be worse than need be.
