CRISIS POSTPONED?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B00478R000800030015-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 23, 2016
• Document Release Date: January 16, 2014
• Sequence Number: 15
• Publication Date: May 29, 1981
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2014/01/16: CIA-RDP92B00478R000800030015-5
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ARTICLE .013EARED
ON PAG2' 7y4
Russian oil
1
Crisis postponed?
newroose
America's Central Intelligence Agency
has revised its estimates of Soviet oil
output. It now thinks that Russia is not ?
about to become a big oil importer after
all. Four years ago, a CIA study predict-
ed that Russia's oil production would fall
sharply after 1980 and that it could be
importing as much as 3.5m-4.5m barreb a
day by 1985. Now it says that the Soviet
Union might still be exporting oil in the
mid-1980s.
The agency claims its revision is not as:
vectacular as it looks, but the difference*
THE ECONOMIST
23-29 MAY 1981
is clearly an embarrassment. True, its
1977 forecast that Soviet output could
decline to as little as 8m b/d by 1985 was
almost immediately revised upwards.
Western oil specialists never took .the
CIA's original forecast too seriously.
Yet, only a year ago, the then CIA
director. Admiral Stansfield Turner, was
still telling senators that Soviet military
action to secure new energy supplies
could not be ruled out. The spectre of an
oil-hungry Russia anxious to grab Gulf oil?
was a strong theme in some of the Rea-
gan team's foreign policy planning.
-. The CIA's 20% upward revision means
that it is now estimating Russian produc-
tion at 10m b/d by 1985, and maybe as
high as 11.m b/d. Output is now running at
just over 12m b/d-2,1% above last year's
total. So the CIA is itill projecting a fall
in the immediate future but it is less
alarmist than before shim the conse-
quence,. It says Russia is switching to
alternative fuels (especially coal, nuclear
-power and natural gas) and showing a
new interest in conservation.
Around 25% of today's 12m b/d of
Russian a is exported?half to its east
European allies, half to the west and
India. The east Europeans in Comecon
have bean told that their oil supplies will
stay stuck at 1980 levels (The Economist,
May 9th, 1981). The west could live with
a cut in Soviet exports, but Russia needs
the hard currency and would prefer to cut
its do 'c ump ' n and exports t
Comecon. ?
- The CIA still has a low opon of
Russian conservation efforts. It believes
that the Soviet Union is at least 40% less
efficient in its use of energy than the
west, and that Russian planners and man-
agers have little incentive to save oil.
They may have an incentive soon. Do-
mestic wholesale oil prices in Russia,
which have been frozen since 1967, will
rise by 230% early next year. That could,
have an effect, even on Russia's non-
market economy. If domestic demand is
held down more effectively than the CIA
expects, there will be more Russian oil to
spare for export.
Some American specialists (and the
state department) also think that the
CIA's urn b/d top output estimate for
1985 is still too niggardly. The latest
Soviet five-year plan projects almost 13m
b/d by 1985, which would be possible wit*
western technology to improve drilling
and recovery techniques. Development I
of Russia's huge natural gas reserves
could provide the hard currency needed
to buy that technology, and hasten the
switch away from excessive domestic use
of oil. That is why the proposed pipeline
Raking a Siberian natural gas field with
western Europe is so important to
Russia.
Declassified and Approved For Release 2014/01/16: CIA-RDP92B00478R000800030015-5