Edited by Jeronim Perovic Cold War Energy Jeronim Perovic´ Editor Cold War Energy A Transnational History of Soviet Oil and Gas Editor Jeronim Perovic´ Department of History University of Zurich Zurich, Switzerland ISBN 978-3-319-49531-6 ISBN 978-3-319-49532-3 (eBook) DOI 10.1007/978-3-319-49532-3 Library of Congress Control Number: 2017930572 © The Editor(s) (if applicable) and The Author(s) 2017 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Cover illustration: © Jeronim Perovic´ 2016 Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland PREFACE BY THE EDITOR The history of the Cold War remains incomplete without taking into consideration the role of Soviet energy, in particular in relation to oil and natural gas The various Soviet campaigns to extract natural resources in ever-larger quantities were means to support the needs of the country’s military as well as its energy-intensive economy However, Soviet energy exports also served as an important tool in Moscow’s project to integrate the socialist states of Eastern Europe into a single economic space With regard to the states of the capitalist West, Soviet energy export largely served the purpose of gaining access to technology and hard currency While the growing share of “red” oil and gas in European energy consumption was viewed with suspicion in the West, Moscow too had reservations about the prospect of the Soviet Union becoming increasingly dependent on foreigners for technology inputs and hard currency During the period of détente in the 1970s, however, trade in energy was to become the main driver of Soviet–West European economic cooperation, eventually evolving into the kind of East–West energy interdependence that determines relations between Russia and Europe to this day If anything, the Soviet Union was a rather reluctant energy power Considering only official statistics, the story of Soviet energy is one of success, as oil and gas extraction and export figures rose year by year, making the Soviet Union one of the world’s leading international energy powers But in actual politics, the issue of energy was more often a burden rather than an asset The image portrayed in the West during the Cold War about the Soviet Union trying to use energy as a political weapon, as a way v vi PREFACE BY THE EDITOR to tighten its grip over its Eastern European allies and counter American influence in Western Europe, is at least partly misleading and in need of revision Also, the view that Soviet energy policy was generally driven by an expansionist geopolitical agenda ignores the fact that the Soviet Union repeatedly faced domestic energy shortages, and Moscow saw cooperation with Western companies and states as a way to overcome internal economic problems In East–West relations, Soviet energy was at times a cause of tension and confrontation, but much more often a political “softener.” The Iron Curtain was a dividing line between East and West, but nowhere was this curtain more porous than in the domain of energy flows This book takes a fresh look at international relations during the Cold War, challenging some of the long-standing assumptions of East–West bloc relations, as well as shedding new light on relations within the blocs regarding the issue of energy By bringing together a range of junior and senior historians and specialists from Europe, Russia and the US, this book represents a pioneering endeavour to approach the role of Soviet energy during the Cold War in a comprehensive manner, putting it into a transnational perspective The research for this volume was originally undertaken for a conference titled “Oil, Gas and Pipelines: New Perspectives on the Role of Soviet Energy During the Cold War.” This event, which took place at the University of Zurich on January 14–16, 2015, was organized by Jeronim Perovic´ together with Dunja Krempin and Felix Rehschuh from the Department of History of the University of Zurich, and was financed by the Swiss National Science Foundation (SNSF) and the Hochschulstiftung of the University of Zurich This book contains a selection of papers, which were first presented at this international conference The authors revised their papers based on discussions during the conference, the editors’ comments and the inputs provided by an anonymous reviewer The editor would like, in particular, to thank all participants of the conference who provided useful comments to the authors in preparing the resultant chapters They were Margarita Balmaceda, Alain Beltran, Elisabetta Bini, Nada Boškovska, Roberto Cantoni, Nataliia Egorova, Falk Flade, Rüdiger Graf, Jussi Hanhimäki, Per H€ogselius, Niklas Jensen-Eriksen, Suvi Kansikas, Galina Koleva, Dunja Krempin, Giacomo Luciani, Lorenz Lüthi, Viacheslav Nekrasov, David Painter, Tanja Penter, Felix Rehschuh, Oscar SanchezSibony, Benjamin Schenk, Hans-Henning Schr€oder, Andreas Wenger, and Jean-Pierre Williot PREFACE BY THE EDITOR vii The editor would like to thank Dunja Krempin and Felix Rehschuh for their help in organizing this conference, and Felix Frey, Regina Klaus, Tom Koritschan, and Markus Mirschel for their logistical support during the event Christopher Findlay and Tom Koritschan provided valuable help in the preparation of this book The editor would also like to thank Molly Beck, Dhanalakshmi Jayavel, and Oliver Dyer at Palgrave Macmillan for their support during the publication process September 2016 Jeronim Perovic´ CONTENTS The Soviet Union’s Rise as an International Energy Power: A Short History Jeronim Perovic´ The Bolsheviks’ Attitude Toward Oil Oil in Wartime The Politics of Oil Trade The Soviet “Oil Offensive” The Oil Shock of 1973/74 and Moscow’s Charm Offensive Implications of the Soviet “Energy Crisis” for Eastern Europe The Iranian Revolution and the Building of the “World’s Biggest Pipeline” “Siberian Might” and Gas for Europe Structure and Overview of the Present Volume Part I From World War to Cold War: Soviet Oil and Western Reactions From Crisis to Plenty: The Soviet “Oil Campaign” Under Stalin Felix Rehschuh Oil Politics and “Second Baku” in the Interwar Period The Soviet Oil Complex and Its Eastern Parts During World War II 11 14 19 22 24 27 45 47 49 54 ix x CONTENTS The Postwar Years Conclusion Stalin’s Oil Policy and the Iranian Crisis of 1945–1946 Nataliia Egorova Introduction Short Historical Overview The USSR’s Growing Interest in Iranian Oil The USSR Enters the Competition for Oil Resources Kavtaradze’s Oil Mission in Iran Continuing Soviet Struggles The Development of the Iranian Crisis and the Oil Question Consequences of the Iranian Crisis “Red Oil” and Western Reactions: The Case of Britain Niklas Jensen-Eriksen Introduction Soviet Oil Exports “Patrons of the UK Oil Companies” The First Round The Soviets and the Board of Trade Attack Dreams of an Oil Cartel Oil for Ships Conclusion Debates at NATO and the EEC in Response to the Soviet “Oil Offensive” in the Early 1960s Roberto Cantoni Introduction The Soviet “Oil Offensive” and Western Reactions The Soviet Oil Threat at the EEC A Dangerous Friendship Troubles of a Special Relationship Conclusion 59 66 79 79 83 84 86 88 90 94 97 105 105 107 109 110 115 117 119 122 131 131 134 137 140 144 149 CONTENTS Part II From Cold War to Détente: Soviet Energy and the Expansion of East–West Trade Decision-Making in the Soviet Energy Sector in Post-Stalinist Times: The Failure of Khrushchev’s Economic Modernization Strategy Viacheslav Nekrasov Introduction Genesis of and Rationale Behind Khrushchev’s “Petrochemical Project” The “Petrochemical Project:” High Ambitions and Initial Success Gosplan, Interest Groups, and the Crisis of the “Petrochemical Project” The “Gas Pause” in the Soviet Economy (1963–1964) Khrushchev’s Attempt at Reconstructing His “Petrochemical Project” (1962–1964) The Export of Oil and Gas: Potentials and Problems Khrushchev’s Opposition to an Accelerated Construction of Oil and Gas Pipelines (1963–1964) Conclusion A Challenge to Cold War Energy Politics? The US and Italy’s Relations with the Soviet Union, 1958–1969 Elisabetta Bini Italy’s Challenge to the “Seven Sisters” ENI’s Contracts with the Soviet Union US Reactions to ENI’s Agreements Between Bipolarism and De´tente Conclusion xi 163 165 165 167 170 172 176 178 181 188 190 201 203 207 210 217 222 Gaz de France and Soviet Natural Gas: Balancing Technological Constraints with Political Considerations, 1950s to 1980s 231 Alain Beltran and Jean-Pierre Williot From Technical Partnership to the Emergence of Real Interest in Soviet Gas (1956–1969) 233 The French Gas Sector Considers Soviet Contracts as a Source of Supply (1969–1979) 236 .. .Cold War Energy Jeronim Perovic´ Editor Cold War Energy A Transnational History of Soviet Oil and Gas Editor Jeronim Perovic´ Department of History University of Zurich Zurich, Switzerland... the Cold War David S Painter Oil and Soviet Power Soviet Oil and US Policy The Reagan Administration and the Siberian Natural Gas Pipeline Developments on the World Oil Market The Third Oil Shock... essays on US foreign relations, the Cold War, and international oil politics have appeared in the Cambridge History of the Cold War, Journal of American History, Diplomatic History, Business History