Global Energy Politics and Policy: The Promises and Threats of Global Socialist Oil Essay

Paper Type:  Essay
Pages:  4
Wordcount:  904 Words
Date:  2022-12-06

During the 20th century, all Soviet leaders were fighting the primary challenge on how to establish a system of production that will enable considerate allocation concerning socialist principles. The Soviet believed that socialist principles would extend to the multinational system as a whole to allow for an equal flow of capitalist money and commodities. The major problem during the 1970s and 1980s was the export of oil to the West in interchange for hard cash to help build the stagnant socialist system. Indeed, the drop in oil prices during the 1980s resulted in severe consequences towards the Soviet Union (Rogers, 2014). As a result of the effects caused by the drop in oil prices it led to the Soviet leaders to focus on oil and money in the global system. Therefore, the Soviet representatives resorted to socialism trade agreement across the globe and offered it on barter terms. While socialism promised equality, property as well as security in the 20th century this was just a big lie. Instead, socialism has resulted in misery, poverty, and tyranny. In the light of this statement, this paper discusses the achievements of socialism realized through petrobarter and the challenges that it faces from the capitalist who frames it as a threat that it brings to the economy of the world.

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With the advancement of the Soviet Union, it provided oil in exchange with local goods which was impossible to otherwise attain. Indeed, this was a significant milestone because during the 1950s and 1960s the underdeveloped world that is the Soviet Union due to lack of oil fields used to use vast sums of money to oil companies from the West who only accepted cash in cash. Therefore, the Soviet Union advocated for the barter trade between oil and local products as a strategy to secure its money reserves. Consequently, after the 1959 Cuban Revolution, the Soviet Union provided Castro's administration of unrefined oil in interchange for sugar. However, the Western refineries international corporations which were operating in Cuba declined to refine the crude oil. As a result, the Cuban government nationalized these refineries and started long cycles of oil-for-sugar agreements with the Soviet Union. In this sense, the barter oil allowed for a variety of products in its agreement, and this saved the Indian government millions of money in for of hard cash reserves.

The Soviet global petrobarter continued to spread out in different sizes and shapes in the remaining part of the Cold War. Indeed, the petrobarter was mainly intensive between the COMECON and the Soviet Union nations of Eastern Europe. The Soviet Union offered these nations energy demands in the form of gas and oil which was exchanged for a variety of goods that was based on negotiable terms (Markus, 2016). For example, after 1965, nations from Eastern Europe were able to directly barter for oil from the Middle East by bartering manufactured and tanker products for oil.

The petrobarter was received differently in the international contexts unlike how the domestic contexts acquired it. Petrobarter was seen as a threat by the multinational arena by the capitalists companies which for decades were in control of the oil production and pricing. As a result, oil major reacted by lobbying campaigns which looks at petrobarter as an intimidation to the free world. The capitalist oil corporations on looking at the Soviet fight against the cold war using economic means facilitated by the barter agreements. The oil corporation argues that they could withstand this kind of competition; hence they could need help from national governments to remain active in the struggle. Therefore, due to this argument pertobarter was seen as a national security threat (Maurer, 2014). As a result, the United States National Petroleum Council reacts by asking the US Interior Department to provide a report about the impact of oil export from the Soviet bloc. Accordingly, barter transactions are seen as key contributors towards the Soviet influence because they were making commodity-producing nations reliant on on the Soviet Bloc for markets. Consequently, the Soviet Bloc was seen to have grabbed the petroleum industry as a lucrative commodity which could be extensively bartered in the West for technological purposes and political influence. Certainly, the Western international oil corporations through diplomatic application piled diplomatic pressure to the US Interior Department report by discouraging other nations from trading with Soviet oil on exchange terms.


In my view, the intent of the Soviet Union through petrobarter was to enhance unity and peace among member states which took part in the barter trade. However, capitalist multinational oil corporations saw the Soviet Bloc as a threat to their prosperity. For instance, the entry of Soviet oil in the global marketplaces in the 1950s gave new oil corporations additional fear to attack the Department of Justice which led to many refusing to avail their documents regarding their international operations. The global oil corporations declined to disclose their overseas practices on claims that it would the national security of the United States. Nonetheless, this claim was only an excuse framed by capitalists because of their interest in oil to challenge the free world.


Maurer, B. (2014). Petrobarter: Oil, inequality, and the political imagination in and after the Cold War.

Markus, U. (2016). The International Oil and Gas Pricing Regimes. In The Palgrave Handbook of the International Political Economy of Energy (pp. 225-246). Palgrave Macmillan, London.

Rogers, D. (2014). Petrobarter Oil, Inequality, and the Political Imagination in and after the Cold War. 131-143.

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