Soviet oil production peaked in 1983 and declined in 1984, chiefly because the growth of West Siberian output has nearly stopped. The root of the problem is two decades of unbalanced policy favoring near-term payoff over long-term preparation. Exploration has been systematically neglected in favor of development, and the West Siberian oil industry has been built on too narrow a base. Despite warnings from local officials as early as 1970, this led to a first crisis in 1976-1977. Moscow responded with an emergency increase in development drilling. This approach prevented output from dropping between 1978 and 1983 but only aggravated the deep-seated imbalance, preparing the way for a new crisis in 1983-1985. The underlying causes of this near-sighted approach are analyzed and the implications for a deeper understanding of Soviet decision-making spelled out. Journal of Economic Literature Classification Numbers: 052, 124, 721.