The Soviet Union's willingness to take joint action with OPEC to boost world oil prices should come as no surprise. It's in the Kremlin's best interest to do so.
Moscow announced this week it will cut back hard currency oil exports to capitalist countries by 5 percent in solidarity with OPEC until midyear. The 5 percent reduction represents a cut of 18 million barrels over six months or about 100,000 barrels a day.Falling world oil prices and unstable dollar rates have played havoc with Soviet planning and its state budget. Last November, Finance Minister Boris Gostev announced the first projected budget deficit for the country. He said the $55 billion shortfall was partly caused by a $64 billion drop in oil revenues over the past three years.
The cutback, Soviet officials said, symbolizes Soviet desire to cooperate with OPEC pricing and supply policy and further joint action may be possible. The Kremlin will likely continue to send representatives to OPEC meetings as observers, a practice it began recently.
In a pragmatic sense, the cutback will make little difference in Western imports because the Soviets export little oil to the West.
The window dressing aside, it all means that Soviets are trying to win on two counts. The higher prices would mean that oil they export - as the world's largest oil-producing county - to Third World and Soviet bloc countries would get them a better price for their product.
Furthermore, their show of solidarity with OPEC allows them to put on a friendly face, mounting in Gorbachev-fashion a diplomatic offensive against Western oil importers, as opposed to old military tactics of former Soviet regimes.
Although the Soviet cutback and support of OPEC are unlikely to have a major effect on world prices and supply, Moscow will come out with more influence and stature in the Middle East. If the United States is not careful, it could find itself outflanked by Gorbachev diplomacy.