Pattern of Soviet Oil Exports

It is difficult to assess the mixture of motives influencing Soviet oil exports. The relative importance of political motivations, as compared with economic ones, undoubtedly varies from area to area. Basically, however, it appears that the Russians export oil to earn foreign exchange, and that the future of Soviet oil exports will be determined by the amount needed to finance the country's imports and by the attractiveness of oil relative to other export possibilities.

The Soviet attitude toward foreign trade is somewhat different from the customary view in a market economy. Ideally, the Soviet Planners would like not to have to trade at all. Not only is economic independence regarded as a virtue, but foreign trade is a difficult kind of activity for the command economy to plan and administer effectively. However, fundamental resource limitations make it necessary to do some trading, and in some cases out of imports the easiest way out of a problem.

Finding goods that are suitable export and available in sufficient quantities is a great problem for Soviet planners. On the one hand, it is difficult to pry commodities loose from domestic commitments to make them available for export; On the other, it is difficult to find goods that are salable in the advanced countries, where problems of quality, obsolescence, and so on, rake many Soviet goods unattractive to buyers. Without the interest in exports per se, which is an important motivation for producers in a market economy, the Russians are reluctant to make long-term commitments and build up the kind of system for cultivating and servicing foreign buyers that would be necessary to sell certain kinds of commodities.

Although there are some traditional exports and customers, the ideal export from the point of view of the Soviet central planners is some standard commodity for which there is a large market, and which can be sold in large lots, without long-term commitments. Furthermore, this commodity ought to be available domestically on a windfall basis; i.e., as an unexpected surplus at low marginal cost. There is an understandable reluctance in an overcommitted economy where decision makers tend to have short time horizons to make big outlays on developing specialized export capacity. Oil is a generally attractive commodity from most of these points of view. It is true that it is not sold on established commodity markets, but the growth of independents and government-controlled refining and marketing systems in the world oil market over the past decade has made it possible for the Russians to sell without having to get much involved in refining and distribution.

The large amounts of oil that became available in the fifties must have seemed a kind of windfall. The history of that period suggests that Soviet planners did not at first deliberately develop this oil as an export commodity, as there were no significant increases in the resources devoted to the oil industry. It is just that luck and technological change conspired to yield a surplus of oil within traditional patterns of resource allocation.