ABSTRACT
Rapidly increasing Soviet oil production in the 1960s and 1970s allowed the Soviets to expand deliveries to Eastern Europe and also to the world market. The Soviets therefore face a short-term problem: that, at current levels of exports, a fall in the oil price of one dollar reduces their earnings by around $450m per year. The USSR could be a significant destabilizing force in world oil markets if it should decide to offer substantial discounts from agreed OPEC and North Sea price levels. The rise in oil prices during 1979–1980 forced them back increasingly upon Soviet supplies and greatly complicated their economies, despite the fact that fuel imports from the USSR are traded largely on soft currency terms. Iran would be the most obvious candidate for such a trade, but at mid-1983, the Islamic Republic appeared to be becoming increasingly hostile to the USSR.
