The huge hard currency gains from oil and gas exports provide a decisive financial resource to sustain failed regimes. The economic situation of the USSR improved without any economic reforms, it was possible to purchase large quantities of advanced foreign equipment and consumer goods, and it also secured the financial basis for the arms race with the United States.

Built in the 1940s by the Soviet Union to exploit the Caspian Sea oil resources, the offshore oil city is located on the sea 45 kilometers from the mainland on the Apsi Peninsula in present-day Baku, Azerbaijan, and is known as "oil rocks".

Stimulated by the oil dividend, the Soviet Union's investment in the oil and gas industry increased by 1-2 times in 1970-1986. Before the first oil crisis in 1970-1973, the oil industry accounted for 8.8-9.3 per cent of total industrial input, rising to 19.5 per cent in 1986.

Soviet oil production capacity increased from 74% of the United States in 1970 to 140% in 1986; During this period, natural gas production grew from 30% to 133% equivalent to the United States. The Soviet Union's imports of machinery and equipment from the West, including complete sets of oil extraction equipment, increased from 29.8 percent in 1980 to 43.8 percent in 1990. At the time, many people believed that oil prices would stabilize after rising to a certain height, and they were immersed in a wave of optimism.

But the rest of the sector is in a state of depression. From 6% in the 50s, 4% in the 70s to 3-3.5% in the 80s, the Soviet economy continued to grow at a rate of declining or even stagnant growth for 20-30 years. The Soviet Union became a net importer of grain from 1975 to a surge in food imports. In 1970, the net export was 3.5 million tons, in 1974 the import and export of grain was flat, and in 1975 the import of tens of millions of tons. In 1984, only 26.8 million tonnes of grain were imported from the United States and Canada. In 1986-1988, the food shortage was about 21 billion rubles (in the case of total food production of 136 billion rubles). In addition to importing large quantities of grain, in 1989 it imported 600,000 tons of meat, 240,000 tons of cream, 1.2 million tons of vegetable oil, 5.5 million tons of granulated sugar, and 500,000 tons of citrus.

It can be clearly seen that the economy of the Soviet Union in the seventies and eighties of the century was already heavily dependent on oil exports, and during the Gorbachev perestroika, the Soviet Union even fell into a strange circle of maintaining petrodollar earnings by increasing production.

Located in the northeast of Tyumen in the West Siberian Basin of Russia, the Ob River basin is the third largest oil field in Russia, first discovered in 1961.

According to statistics, the economic growth rate of the whole Western countries dropped from 5.7% in 1973 to 0.7% in 1974 and -0.4% in 1975, and from 4.1% in 1978 to 3.2% in 1979, 1.4% in 1980 and -0.3% in 1982. In this context, Western oil-consuming countries have begun to take various measures in an effort to get rid of their heavy dependence on oil.

First of all, Western countries have adjusted their energy policies, first of all, to curb oil consumption. According to the Japan Institute of Energy Economics, the OECD reduced oil consumption by 318 million tons due to energy conservation in 1973~1981, with an average annual fuel saving of 24.46 million tons, of which the average annual oil saving in 1979~1981 was higher, reaching 49.33 million tons, which alone can reduce the OECD's oil consumption by nearly 1 million barrels per day.

At the same time, Western countries attach importance to the development of alternative energy sources and the development of high-tech and low-energy industries. According to statistics, the amount of coal used by public utilities in the United States in 1984 increased by more than half compared to 1973. During the same period, the United Kingdom, France and West Germany each had at least one nuclear power station of 1,200 MW or more each operational. By 1983, 39% of France's electricity was supplied by nuclear power plants. In addition, Western countries established a unified international organization to intervene in the international oil market, and on January 19, 1976, the International Energy Agency was formally established, which made Western countries form a collective energy security system.

As a result of these measures, world oil consumption gradually declined in the eighties, and according to the British Petroleum Corporation's World Energy Statistics Review in June 1986, "the total world oil consumption in 1979 was 3.125 billion tons, but in 1985 it was only 2.809 billion tons, and in 1985, the share of oil in the composition of world energy consumption was only 37.89 percent, and the proportion of oil decreased by about 10 percentage points compared with 1973." ”

In 1979, there was a long queue of cars lining up in the United States to refuel, and the oil crisis of the 70s of the 20th century made a windfall for the Soviet Union.

In fact, between 1979 and 1980, Saudi Arabia's oil minister warned other OPEC members that high oil prices would dampen demand for crude oil in the face of rising crude oil prices. But no one heeded its warnings, which later proved to be far-sighted.

This downward trend in demand for crude oil was also noticed by Chinese scholars as early as that year. In the article "The Economy of Western Europe in the Eighties" published in the 04th issue of Modern International Relations in 1983, Chinese scholar Guan Shufen has pointed out that "in order to adapt to the new situation of world energy, Western European countries have successively formulated energy structure reform plans centered on energy conservation and the development of alternative energy sources, reduced the proportion of oil in Western Europe's total energy consumption, and readjusted their economic structure." The European Community estimates that in the decade 1981-90, such investments totalled about $500 billion, or 2 per cent of GDP, in member states. ”

It can be seen that after entering the 80s, the price decline caused by the decline in crude oil demand has formed a trend, and the Soviet economy, which is overly dependent on oil exports, cannot avoid catastrophic consequences if it does not adjust accordingly.

However, in 1980-1982, when the world economy was already in a series of recessions accompanied by falling oil prices, no one in the Soviet Union foresaw what the consequences of this situation would have for the Soviet Union. In the 80s, more than half of the foreign exchange earnings of the USSR depended on oil exports, while more than half of foreign exchange expenditures were spent on imports of grain and foodstuffs. Thus, the state of the economy in the USSR directly depended on the fluctuations of world oil prices and grain prices.

What's worse is that the Soviet Union's crude oil at this time also had the problem of declining extraction and rising costs. In the early 80s, the production of the Samotrol field, which accounted for 25% of the oil production of the Soviet Union, was already declining, as were the production of other giant fields in Western Siberia. In the giant oil fields, the easily recoverable and cheap oil has been exhausted. Smaller, more complex oil fields in Western Siberia require huge investments. In order to maintain the original production capacity, more financial and material inputs are needed, but there is no money in the state budget for these investments. This will lead to one consequence: when the price of crude oil falls, it will become increasingly difficult for the Soviet Union to maintain stable foreign exchange earnings by increasing production.

The Soviets have repeatedly lost the opportunity to make amends, and the final outcome is not difficult to imagine.

In August 1985, Saudi Arabia's oil exports soared from less than 2 million b/d to about 6 million b/d, and to 9 million b/d in late autumn. In November, the international price of oil fell from $30 per barrel to $12 per barrel less than five months later. This allowed the Soviet Union to lose more than $10 billion in hard currency overnight, almost half of its hard currency revenues.

According to the official statistics of the Ministry of Energy of the Soviet Union, the decline in world oil prices from 1985 to 1988 fell from 212.6 US dollars / ton in 1984 to 93 US dollars / ton in 1988, a decrease of 129%, resulting in a total loss of 40 billion rubles in the country in four years. This exacerbated the already troubled economy of the Soviet Union and became one of the important factors in the eventual collapse of the Soviet Union.

It should be pointed out that for a long time, Saudi Arabia's production increase has been considered by some people to be "forced" by the United States, but in fact, it is not difficult to know through analysis that Saudi Arabia's production increase is an inevitable requirement of its own economy.

Since the 70s, Saudi Arabia has adopted a strategy to support oil prices due to the extremely abundant oil supply in the global market, reducing crude oil production from more than 10 million barrels per day in 1980 to less than 2.5 million barrels per day in 1985-86. At the same time, however, other oil-producing countries have not followed suit, leading to years of depressed oil prices and a 16-year budget deficit with heavy debt.

Saudi Arabia's production cuts have benefited the most from oil-producing countries such as the Soviet Union, which are extremely expensive to extract. Therefore, Saudi Arabia changed its approach in 1985 and adopted the strategy of increasing production and reducing prices, and "cleared the stage" of competitors such as the Soviet Union, which had extremely high crude oil extraction costs, which was a reasonable market behavior. As it turned out, Saudi Arabia's move ultimately paved the way for their gradual economic recovery. Even if there is the support of the United States, it should not be regarded as a "conspiracy", but a "conspiracy" to follow the trend.

It can be said that for a long time, the Soviet Union's seriously deformed economic system, which was overly dependent on heavy industry and military industry, had already planted bad seeds for its economy. Against the backdrop of falling international oil prices, the Soviets were unaware of the potential crisis, so much so that they were easily struck down by a sharp drop in oil prices, which also had a long-standing mismanagement of governance.