On this day in oil and gas: February 7 - Glasnost

February 7th, 1990, 4 Staraya Square, Moscow, The Union of Soviet Socialist Republics – A neoclassical building. A smoke-filled room. An archetypally cold winter’s day in the capital of the USSR. Something momentous has just happened at the headquarters of the Central Committee of the Communist Party of the Soviet Union (CPSU). The de jure highest body of the 19 million-strong CPSU has just agreed to relinquish the monopoly on power it has held for more than 70 years. The dissolution of the Soviet Union is accelerating. Two months later, Article 6 of the Soviet Constitution would be amended, and the CSPU would no longer be the "leading and guiding force of the Soviet society". Democratisation was happening. Glasnost and Perestroika were under way.

The disintegration of the USSR and the collapse of the Soviet economy has been attributed to many converging factors, from the fallout of decades of corruption and economic mismanagement to the expenditure needed to keep toe-to-toe with the Reagan’s Cold War military build up. One oft-overlooked factor, however, is that preceding the crash and burn of Soviet society, there was a severe "oil shock" in which production rapidly plummeted and GDP nosedived. In fact, between 1988 and 1995, oil production fell by a staggering 50 per cent. So, was the destruction of a world superpower down to the Black Gold? Or is oil’s part in the fall of Communism just a red herring?



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