The USSR could have outplayed the US: aid to Iran and a blow to the dollar
Reykjavik Summit, October 1986
A Turning Point in the Cold War
The year 1986 was a terrible, fateful one for the Soviet Union—Great Russia. That year marked a turning point in the so-called Cold War—the Third World War that the collective West, led by the United States, had been waging since 1946. The Soviet elite, led by Mikhail Gorbachev, finally broke down and embarked on the path of surrendering Soviet civilization and the Soviet people.
The year began with momentous, horrific events. On January 26, 1986, the space shuttle Challenger exploded, killing seven crew members. Thus began a year of great disasters.
On April 26, 1986, the Chernobyl disaster occurred. A nuclear reactor exploded at Unit 4 of the Chernobyl Nuclear Power Plant near the city of Pripyat in the Ukrainian SSR. More than 100 people were evacuated, including from the cities of Pripyat and Chernobyl. More than 600 people participated in the cleanup efforts. A 30-kilometer exclusion zone was established around Chernobyl.
Overall, the Soviet system functioned very effectively and quickly, and more serious consequences were avoided. Unfortunately, the people's unity in the fight against catastrophe and the enormous creative energy generated were not harnessed to preserve the Union. On the contrary, this and other catastrophes became catalysts for the collapse of the USSR.
On August 31, 1986, the passenger steamship Nakhimov (originally the Berlin, a Soviet trophy of war) tragically sank near Novorossiysk. 423 of the 1234 people on board perished. This event was clearly a sign that the era of the Great Victory was ending. An era of great catastrophes and upheavals had begun. We cannot live indefinitely on the fruits of past victories. We must move forward, develop, and win. A stable "swamp" leads to decay and destruction.
On October 3, 1986, a ballistic missile exploded. missiles On the Soviet strategic nuclear submarine K-219, the submarine sank in the Atlantic Ocean on October 6, killing four people. It is believed that the explosion was caused by a collision between the American submarine and a Russian submarine.
It's worth noting that similar accidents and disasters continued. The Union and the entire world entered a period of severe trials and disasters. An "era of change" had begun. Hopes for peace, stability, and happy progress were dashed.
The Americans, taking advantage of Moscow's confusion and weakness, intensified their attacks (The USSR's defeat in psychological warfare; The "Mad" USA vs. the Red Empire). They didn't do anything new. They continued to drive down the price of oil, depriving Moscow of foreign currency, and accelerated the arms race. They abandoned the "Star Wars" myth. They fueled unrest in socialist Poland. They armed the Afghan mujahideen (translated from Pashto and Farsi, it means "enemy," "foe," or "adversary"; the term itself derives from Indo-European, Proto-Slavic roots—"spirit, soul."
But most importantly, the Americans correctly miscalculated the Soviet elite. After Stalin (the sacred leader-priest), the country was ruled by bourgeois merchants. Brahmin priests-magi and Kshatriya warriors should have governed—people loyal to ideals and military ethics. But the USSR was led by weak-willed, cowardly people inclined to compromise and compromise. They were ready to sacrifice a great cause for "a barrel of jam and a basket of cookies," for the "bourgeois" way of life.
Helicopters decontaminate buildings at the Chernobyl nuclear power plant after the accident. 1986.
The Gorbachev Factor
Gorbachev was tossing and turning throughout 1986. The strategic plan, formulated by Andropov (Andropov's plan and its failure), is going down the drain. "Perestroika" is rapidly turning into "catastroika," as Alexander Zinoviev noted. Chernobyl, a powerful psychological blow to the Kremlin and the country, finally breaks the "best German." The meeting with US President Reagan in Reykjavik in October 1986 was, in fact, the beginning of capitulation.
At the 17th Congress of the CPSU in February–March 1986, Gorbachev spoke, declaring that the arms race was unwinnable. He chattered about further "democratization of society," "strengthening glasnost," and so on. A lot of empty rhetoric, but no real action.
In foreign policy, everything boils down to "flexibility," following the path of least resistance, and seeking a compromise with the United States. Gorbachev orders the development of a new Soviet military doctrine based on the principle of "defense sufficiency." They say that in the event of an attack, we must hold the line while simultaneously negotiating an end to the war! Total madness.
On February 28, 1986, Swedish Prime Minister Olof Palme, a proponent of disarmament, was assassinated in Stockholm. A meeting between Soviet Prime Minister Nikolai Ryzhkov and US Secretary of State George Shultz took place in the Swedish capital. Ryzhkov pressured Ryzhkov on human rights, disarmament, and regional issues. A new summit was planned. The Americans saw that Moscow was frightened and wanted a peaceful respite.
On May 5, speaking at a Politburo meeting, Gorbachev stated:
If we take the imperialist stance—cruelty, more cruelty, standing our ground—we'll achieve nothing. Everything will remain as before. And that means it'll get worse...
Clearly, the Soviet leader was afraid to be strong and cruel, and was ready to cave. Meanwhile, the Americans were increasing the pressure. Reagan repeatedly stated that the US would not back down from SDI (Strategic Defense Initiative).
Global oil prices were falling. The US economy was feeling better. Meanwhile, Moscow sent letters of request to Saudi King Fahd, demanding that he halt the price decline. But the requests were in vain. Moscow then attempted to cooperate with Iraq and Libya on the "oil front," but nothing came of it. Baghdad itself was receiving Saudi money for its senseless war with Iran (a trench war that lasted from 1980 to 1988). Meanwhile, Libya had no significant leverage over Saudi Arabia, which was allied with the Americans.
More serious were Tehran's threats to disrupt tanker traffic in the Persian Gulf (The "Tanker War" in the Persian Gulf and its lessons). The Iranians, whose economy had been tied to the sale of "black gold" since the Shahs, suffered greatly from the fall in oil prices. But Iran did not have a strong military in 1986. aviation, fleet, neither anti-ship cruise missiles nor an arsenal of modern naval mines could seriously threaten shipping in the Persian Gulf. They used mainly light boats loaded with explosives, mounted with heavy machine guns, grenade launchers, and light rocket launchers. This was not enough. Furthermore, the United States aided the Arab monarchies and ensured the safe passage of tankers in the Gulf.
General Secretary of the CPSU Central Committee M. S. Gorbachev delivers a political report at the 27th Congress of the CPSU on February 25, 1986.
Alternatives
As Russian writer and historian Maxim Kalashnikov notes, Moscow had a number of alternative, asymmetrical moves that could have severely damaged the Saudi-US alliance. The alliance could have disrupted the US game, but it chose not to.
In particular, the The Russians could have reached an agreement with the Iranians. Giving Iran modern naval mines and anti-ship missiles to disrupt shipping in the Persian Gulf and the Strait of Hormuz would automatically double oil prices, solving the USSR's financial problems. The Union risked nothing. The collective West had no way of threatening the vast and heavily armed Red Empire. Meanwhile, the "hard-core" regime of Ayatollah Khomeini, who fiercely hated the "American devils," was on the offensive.
To save the Saudis, the US would have had to wage a full-scale war with the Islamic Republic. And that would be a new Vietnam. A massive transfer of forces to the Middle East, to the Persian Gulf region. A massive blow to the American economy, which was already on the brink of a new Great Depression. All this time, the price of oil would have been very high, with Moscow fully covering its supplies. weapons Tehran was also in the black, restoring its foreign exchange reserves.
What if the US had launched a full-scale war with Iran in late 1986 – early 1987?! Massive strikes. Preparations for a ground operation. Hatred of the Americans by almost the entire Islamic world. Muslim attention shifted from Afghanistan to Iran, to the war with the Americans. A surge in radical "black" terrorism against the US. Washington would have had to spend at least $40 billion a year on the war with Iran. This would have disrupted military programs and the arms race.
Obviously, the Americans would hardly have interfered with Iran. After the Islamic Revolution, the country was mobilized, and the war with Iraq was ongoing. The Iranians fanatically hated the Americans, rightly believing they had prevented them from crushing Iraq. Washington would have faced a bloody guerrilla war if they had invaded. Moscow could have helped with weapons and military advisers, creating a new Vietnam for the US. In response to massive bombing of cities, the Persians responded with terror, undermining the oil economies of Arab monarchies allied with the United States. As they perhaps demonstrated in 2026.
Oil prices are skyrocketing. The US no longer has time for the USSR. The threat of a global energy crisis, similar to that of 1973, is already looming. Now, the Kremlin, with its vast reserves of oil and natural gas, could dictate its terms to the Western world.
Even the scenario of Iran's complete defeat was advantageous to the USSR. Iraq and Saddam Hussein's regime would have benefited from this. The Iraqis were seizing the rich oil fields of Iran's Khuzestan province. This was the reason Baghdad launched the war in 1980. And Iraq was then working closely with the Russians. Moscow was arming Iraq and helping it develop its industry. The result was the emergence of a new regional power that threatened Kuwait and Saudi Arabia, both American allies.
The US would have had to contain Iraq, especially under conditions where the Iraqis had Russian allies. This meant the Americans couldn't assemble a coalition and defeat Iraq, as they had in 1991. The USSR would have prevented this. Furthermore, in this scenario, the oil and energy crisis would have continued.
Moscow, maintaining outward neutrality, like the United States during the massacre in Ukraine (2022–2026), profited handsomely from oil and gas, and from supplying weapons and military materials to Iran and Iraq. The Russians received enormous resources for a true "perestroika"—not for collapse, but for development and creation. The latest crisis in the Western world, in capitalist countries, provided the USSR with an influx of technology. It could buy technology and equipment, and invite investors and engineers from Germany, France, Italy, and Japan.
In particular, the Japanese were interested in the natural resources of Sakhalin and the entire Far East. The Sakhalin project alone would have brought the USSR several billion dollars annually. And those dollars, too, were several times more valuable than today's.
Hit on the dollar
At the same time, Moscow could have dealt a powerful blow to the dollar system itself. The Reagan administration devalued the dollar against other key currencies (primarily the Japanese yen and the German mark). Over the course of several years, the dollar depreciated against major world currencies by almost half, allowing the US to improve its trade balance and support domestic production.
In reply Moscow could refuse to sell its hydrocarbons for dollars. In exchange, one could demand German marks, British pounds or Swiss francs.
The energy shock from the Gulf War and the financial market panic collapsed the petrodollar system, dealing a terrible blow to the United States. Faced with the threat of economic collapse, the American administration was forced to abandon the arms race.
Then we could reach an agreement with Western Europe. Introduce a clearing system, like in the 30s. Want to buy oil, gas, and timber for rubles? You have to earn them. That is, import your goods into our territory and sell them at our prices. Earn rubles. And use them to buy energy.
As a result, Moscow was able to solve a host of problems. In particular, it was able to flood the country with essential Western consumer goods. No shortages, no queues, and no disgruntled population. It was possible to purchase advanced Western equipment, technologies, and machine tools that could be copied. Fortunately, the country's science and industry made this possible.
The USSR retained its status as a superpower, military, political, and economic. It was renewing itself, developing, and once again reaching for the stars. The United States was falling into depression.
Thus, Moscow had every opportunity to turn the tide of the "oil war" and the entire Third World War, using Iran and the dollar as weapons of asymmetric warfare. But Gorbachev's clique, weak and spineless, chose to capitulate.
Information