Baku oil was Bolshevik regime's matter of survival
The plenary session titled 'Russian Revolution and History of the Azerbaijan Democratic Republic: a look back a century later' took place at the History Faculty of the Moscow State University. Its participants discussed the historical destinies of Azerbaijan and Russia in the 19th and 21st centuries, the contribution of the leaders of the Azerbaijani Democratic Republic (ADR) to the formation of the Azerbaijani statehood, the problems of source study and historiography of the ADR, the Russian revolution and issues of national self-determination and education in the ADR, Transcaucasia in the conditions of the 1917-1918 civil war,as well as the importance of Russian education in the formation of Azerbaijan's secular intelligentsia.
Doctor of Historical Sciences, senior scientist of the Institute of Economics at the Russian Academy of Sciences Valery Stepanov told about the role of oil during the ADR period.
"Having received the Absheron Peninsula's oil resources, the government tried to use the national wealth of Azerbaijan, the government tried to use it to strengthen the economic and political situation of the republic. The government abolished all the innovations introduced to the oil business by the Soviet government, in particular, the industry nationalization act, and all industrial facilities were returned to former owners. In order to supplement the budget, they adopted a decree on imposing excises on oil and oil products. Regular trade exchange with Georgia was established. Azerbaijan traded oil supplies for food and essential goods. A similar barter was established with other countries, for example, Italy. The republic traded oil for this country's military uniforms and equipment. An agreement was signed with the US military mission on weekly supplies of fuel oil in exchange for food," Stepanov said.
However, the ADR government was not fully competent to manage oil resources - it had to share oil reserves with allies that were guided by their national interests. "When the Turkish army entered Baku, the export of petroleum products began on the Transcaucasian railway through Batumi to Turkey. The volume of oil and oil products was so high that oil prices in Istanbul decline 10 times - an absolutely unprecedented case for that time. But the Turks did not stay long in the Baku region, they were quickly replaced by the British. The UK recognized the young republic, guaranteed its independence, but at the same time made very serious concessions in its favor - they established full control over transportation and sale of oil. British troops occupied Georgia's Tiflis and Batumi, which allowed them to control the Transcaucasian railway.
Of all the oil products, only kerosene was allowed to enter the free market. But its sale could not cover the costs of oil companies, which suffered losses because of the policy of the British. The British bought oil at a price 25% below the world market and export it without paying excise, that is, they paid nothing to the republic's fund. They imposed own export duty on oil in Batumi, which was exported by private entrepreneurs with their permission. That is, they obtained a solid financial resource.
The British did not seek to export the maximum amount of oil, which was hardly possible. They sought, above all, to meet their own needs in fuel. In particular, the British Mediterranean Fleet widely used Baku oil. At the same time, the British zealously guarded their oil monopoly in the Baku region. They prevented their allies, France, the United States and other countries from gaining access to Baku oil. Moreover, they banned their ally - the Volunteer Army - from accessing Azerbaijan. An official statement was made that all Russian enterprises, routes of communication, property located on the territory of ADR are under British jurisdiction. Of course, the British categorically forbade the export of oil to Russia, which was previously a traditional market for Baku oil."
At the same time, Stepanov stressed that Azerbaijan has always been an integral part of Russia's economy: "Close economic ties were maintained with regular supplies to the Russian market. The loss of this market was hard for the Baku oil industry. But the Soviet Russia government did not seek any close contact with the young republic, since it did not recognize it and considered the territory of Azerbaijan an integral part of the RSFSR.
Lenin's famous words on the fuel crisis, which must be overcome at all cost, apply to November 1919. They needed oil to put an end to economic disorganization. Baku oil was the Bolshevik regime's matter of survival, because it needed energy resources. Therefore, the April 1920 invasion of the ADR was undertaken despite the start of a difficult war with Poland, which required the mobilization of all Soviet forces. The news of the seizure of Baku was met with great enthusiasm in Moscow. On April 20, Lenin declared in one of his speeches: "We have the economic basis that can revitalize all our industry."
The resources of the Baku oil district made it possible for the Bolsheviks to overcome the fuel crisis. In 1920, 148 million poods of oil and oil products were exported from Baku to Astrakhan. Azerbaijan's transformation into one of the Soviet socialist republics marked a new stage in its history and opened a new chapter in the development of the Baku oil region. "