Gorbachevs attempts to deal with the declining oil

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Gorbachev’s attempts to deal with the declining oil production were also ineffective. o Little attention was paid to the maintenance and repair of existing wells or the rational, long-term development of oil fields. o Only token efforts were made to improve the living conditions of oil workers. o Gorbachev toured the Siberian oil fields but did not really know what to do. o In the end what he said amounted to “Work harder. Drill more wells”. o Even more alarming, in the summer of 1985, Saudi Arabia decided to increase its oil production dramatically. o Shortly after Gorbachev’s visit to Siberia, world oil prices crashed. o By the first quarter of 1986, the Soviet Union would be able to fetch no more than 10-12 dollars for a barrel of its oil, compared with a peak of nearly 40 dollars in 1980. What if Russian foreign policy had not been so accommodating at this time? o A key component in Soviet crisis was the collapse in oil prices. o Gorbachev’s foreign policy soothed nerves and encouraged a fall in oil prices. However, Soviet Union’s oil revenues slumped.
International History: The Cold War And How It Shaped The World icedvovos Page 34 31/11/12 o This was the opposite policy to what Soviet interest required, and ignored the possibilities offered by the circumstances of the late 1980s (Gulf War). o What if Saddam Hussein had invaded Kuwait in 1990 with the tacit consent of a nuclear-armed and still hawkish Kremlin? § Bush would not have risked nuclear holocaust to stop Saddam from exercising control over the lion’s share of Mid-Eastern oil reserves. o What if eight years of trillion-dollar deficits under Reagan had not produced a major shift in Soviet policy towards disarmament? § Soviet military-industrial complex could have trundled along for the rest of the 1980s wasting resources on military expenditure. o The Gulf War could have been spun out. § The resulting high energy prices would have stabilized the Soviet economy. § Quite possibility some Western oil companies would have come cap in hand to the Kremlin to let them set up joint ventures in the Caspian or Kazakhstan to exploit the Soviet Union’s reserves of oil and natural gas. § To avoid Saddam’s stranglehold on Middle Eastern oil, the West might have to pay generous Moscow generously for its supplies, and even provide pipeline technology. 8. Resistance of military Army was mainly responsible for Russia’s refusal to give up the Kurile islands and thus losing the prospect of Japanese aid. Army’s failure in Afghanistan weakened it and made it less effective in opposing Perestroika. o In Soviet Union, the army was the glue that held together diverse ethnic groups, primarily because it was perceived as being invincible. o The army’s poor performance in Afghanistan was therefore shocking for soldiers, generals, party cadres and citizens.

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