According to the historian Michael De Groot, the oil crisis forced Soviet policymakers to confront the limits of their energy industry and the effects of the crisis on their East European allies.
Just as in the ongoing Russian invasion to Ukraine, the price of oil has played a major role in several conflicts in the recent history. The mainstream narrative of the 1973 oil crises, triggered by the Yom Kippur War, has been, that the Soviet Union was a primary beneficiary of the 1973–1974 oil crisis.
This interpretation has been challenged by Michael De Groot in his article The Soviet Union, CMEA, and the Energy Crisis of the 1970s in the Journal of Cold War Studies.
Oil As a Weapon
The energy crisis played a key role in the economic downturn in the Western World in the 1970s. Oil prices jumped 350 percent after the OPEC countries decided on their oil embargo in 1973. Just as during the 2022 energy crises, fifty year ago the higher costs rippled through the economy.
In the August of 1973, Faisal, the King of Saudi Arabia met with Anwar Sadat, the president of Egypt, in Riyadh. They secretly negotiated on how the Arabs would use sanctioning oil production as weapon in the then near future military conflict. In October, Egypt and Syria attacked the Israeli positions, starting a new war.
Soon, Abu Dhabi, Iran, Iraq, Kuwait, Qatar and Saudi Arabia cut their oli production, which raised the oil prices sharply. Next, the OAPEC oil ministers agreed to use oil to influence the West’s support of Israel.
They recommended an embargo against non-complying states and mandated export cuts. First, Libya proclaimed an embargo on oil exports to the US, after president Nixon had decided on major aid to Israel. Saudi Arabia and other Arab oil-producing states followed Libya’s example. Very soon, the Yom Kippur War ended and the Arab producers announce a 25 percent output cut.
USSR Becomes the Largest Oil Producer
Thanks to the soaring oil prices, exploration in the Soviet Siberia and Caspian became profitable. The USSR rapidly increased its oil production and by 1980, it had become the world’s largest producer. A success story for the socialist camp with a perfect timing? The Ronald Reagan administration came to power in 1980, and immediately focused on accelerating the arms race by modernizing the U.S. strategic nuclear arsenal and boosted a general military buildup.
According to the historian Michael De Groot, the oil crisis forced Soviet policymakers to confront the limits of their energy industry and the effects of the crisis on their East European allies. Even though the USSR was the biggest oil producer in the world, the domestic and its allies’ demand for Soviet energy outpaced production. The Soviet Union was, after all, the guarantor of Communist rule in Eastern Europe. De Groot points out, that the Soviet decision to raise prices within the Council on Mutual Economic Assistance (CMEA) and the Soviet Union’s inability to fulfill demand across CMEA compelled the East European governments to purchase oil from Middle Eastern countries at increasing world market prices, crippling their balance of payments and accentuating their other economic shortcomings.
And that lead to the brief end of the Cold War, as communism collapsed in the dissolving Soviet Union and in its vassal states in the Eastern Europe.