SOVIETS HAVING TOUGH TIME MARKETING OIL IN FINLAND

The U.S.S.R. is having difficulty selling its crude to Finland, for many years a leading customer for Soviet oil. Finnish newspapers report Soviet crude contains so much sulfur it can be used only to make asphalt, Moscow's newspaper Pravda reported from Helsinki. That may seem an extreme statement, but there is no doubt the U.S.S.R.'s oil sales to Finland have fallen drastically. More than 90% of Finland's crude imports during the late 1980s came from its eastern neighbor. Crude

Nov. 25, 1991

3 min read

The U.S.S.R. is having difficulty selling its crude to Finland, for many years a leading customer for Soviet oil.

Finnish newspapers report Soviet crude contains so much sulfur it can be used only to make asphalt, Moscow's newspaper Pravda reported from Helsinki.

That may seem an extreme statement, but there is no doubt the U.S.S.R.'s oil sales to Finland have fallen drastically.

SOVIET OIL SALES

More than 90% of Finland's crude imports during the late 1980s came from its eastern neighbor. Crude was by far the most important category of total Soviet exports to Finland.

In 1988, the U.S.S.R. sold Finland more than 170,000 b/d of crude and 76,000 b/d of refined products. Value of those sales represented more than half of Soviet exports to Finland.

But, Pravda said, the volume of Soviet crude exports to Finland has dropped sharply since 1988. The Soviet share of Finland's total crude imports this year is expected to be only 40%.

"Now the Finns are buying much of their crude from Norway, the U.K., and even Denmark," Pravda said. It added that Finland's state oil company Neste Oy has agreed to import 80,000 b/d of Soviet crude in 1991, "although this may be a theoretical figure."

Neste Oy officials acknowledge that the U.S.S.R., despite sagging oil production and domestic turmoil, has met its obligations in shipping oil to Finland this year.

UNCERTAINTIES PREVAIL

The future of the Soviet oil exporting agency Soyuzneftexport is uncertain (OGJ, Nov. 11, P. 25). Finnish business officials say Soviet conditions are so unstable they don't know whom to deal with regarding imports of Soviet crude, refined products, or other goods.

Last July, the Helsinki government ended Neste Oy's monopoly on importing crude into Finland. Neste Oy's only competitor was Suomen Petrooli, the Finnish branch of Soyuzneftexport, which was licensed to import petroleum products.

Now foreign firms have access to Finland's oil import market.

Neste Oy retains its dominant position in Finnish crude imports, Pravda said. But it noted units of Exxon Corp. and Royal Dutch/Shell Group have become significant participants in importing to Finland products refined from North Sea crudes.

The new trade agreement with the Soviet Union, which replaces the former barter system with payments in hard currency, has aggravated Finland's current economic recession.

While the U.S.S.R. is eager to buy more Finnish products such as machinery, equipment, ships, paper, and consumer goods, Moscow lacks the foreign exchange required to sign additional contracts, Pravda reported.