ABSTRACT
Oil and natural gas were major assets of the former Soviet Union (FSU). At the top of a small list of internationally marketable goods and services of the FSU, these hydrocarbons jointly represented some three-quarters of the total hard currency revenue. This cash flow fed the huge military sector. The plentiful oil and gas resources drove production of low-quality goods centrally distributed within the FSU and its satellites. Oil and gas also played an important political role. Subsidized fuel exports supported the economies of the former Council for Mutual Economic Assistance (CMEA). Each of the six East European CMEA countries paid $1 to $1.5 billion a year less for Soviet oil and gas than the world market value of these imports.
