PERSPECTIVE ON THE WORLD ECONOMY : Help the Soviets Pump the Oil We Need

The new status of American-Soviet relations offers the United States a way out of our over-dependence on Middle East oil as well as a means of helping the Soviet Union out of its economic chaos.

The Soviet Union is the world’s largest oil exporter. Production from existing fields could be substantially increased if Western drilling and refining techniques were made available. In addition, while “proven” Soviet oil reserves are not as great as those in the Middle East, some geological experts believe that far greater reserves will yet be discovered.

The Bush Administration has shown a reluctance to join Germany and other Western European countries in helping the Soviet Union out of its grave economic crisis. But if aid to Moscow were presented as a way of making us less dependent on Middle East oil, it would likely be accepted both in Congress and the nation. Actually, the aid would be minimal--primarily loans for purchase of drilling and refining equipment as a part of arrangements guaranteeing sales of oil to the United States. Some Western oil companies are interested, though they are understandably cautious about involving themselves in a country whose future appears so uncertain.

A deal would be eagerly welcomed in Moscow. Soviet oil production actually decreased by 8% in the last two years, due largely to inadequate drilling machinery and absence of Western oil technology. At the same time, the Soviet Union has more oil available for export than previously because the Soviets insist on being paid in hard currency, and their traditional customers in Eastern European don’t have it.

The Soviets must find hard-currency customers like the United States. For lack of hard currency, the Soviet government has warned it may not be able to import enough grain to feed its people.

Eliminating our oil dependence on the Middle East would put us in an enormously better position economically, and, given the current crisis, would ease pressure to take military action that could have disastrous consequences. In short, a deal for Soviet oil is a natural.