The Oil Boom You Haven’t Heard Of
WHY YOU SHOULD CARE
Azerbaijan — not Texas or Pennsylvania — was home to history’s most dizzying oil rush.
By Dan Peleschuk
Picture the early days of an oil boom: What comes to mind? The parched plains of Texas, or the forested Pennsylvania towns near the site where U.S. oil was first drilled? Or maybe the Middle East, where the mid-century discovery of black gold in Saudi Arabia and other Gulf countries transformed them into monarchic petrostates.
Perhaps it’s OK if you forgot Azerbaijan, whose first oil well was said to have been drilled more than a decade before American tycoon Edwin Drake dug for crude in Titusville, Pennsylvania, in 1859. It probably wasn’t much to see: Under Russian oversight, a clunky mechanical boring device pounded its way some 70 feet into the ground in the settlement of Bibi-Heybat, on the Absheron peninsula that juts out in the Black Sea.
But not long after, the Caspian region’s cultural and economic fabric was altered by one of history’s most dizzying oil rushes. It’s one that helped make Baku, the modern-day capital, a cosmopolitan hub whose urban landscape is marked by a rich mixture of European and Middle Eastern architectural influences. There, oil fueled the first truly global rush that attracted investors and workers from around the world. If you were among the international elite at the turn of the 20th century, “Baku was as common a name as New York or Paris,” says Ivan Rupnik, author of Baku: Oil and Urbanism.
By 1900, Azerbaijan was pumping half the world’s oil, exceeding the U.S. output.
The fact that oil was buried just beneath the Caucasian soil was never a secret. In fact, says historian Audrey Altstadt of the University of Massachusetts, Amherst, word spread among medieval-era travelers to the region about the substance’s purported therapeutic qualities. But up until the 1830s, when the Turkic region was conquered by Imperial Russia, the oil seeping through the surface was simply dredged out by European traders on their way to Central Asia or India, then carried out in animal skins.
As Russia planted its stakes in the area, drawing up administrative regions and establishing the ruble as a local currency, proper exploration began. Early on, Altstadt says, the getting was so good that “they didn’t know what to do with all this oil,” which came gushing from the ground uncontrollably.
Then came better technology, either borrowed from the West or modeled on Western exploration gear. By the 1870s, the Russian press was awash with mentions of the mad rush that was gripping Baku, Altstadt says, which by this point was an emerging southern bastion of the Russian Empire. “The attraction that everybody had to oil really led to incredible immigration to the city,” she says. Among them were two Nobel brothers, Ludvig and Robert, who set up the Branobel oil company in 1879. Ludvig and his sons soon took over operations, powering a local industry that would literally reach global proportions: By 1900, Azerbaijan was pumping half the world’s oil, exceeding the U.S. output.
The effects on Baku, already an established commercial outpost at the time, were significant. Besides boosting local development — one of the Russian Empire’s first-ever telephone systems was installed in Baku — the rush also brought a delightfully chaotic mixture of cultural influences to the city. Even today, depending on which block you’re standing on, and in which direction you’re looking, you might find architectural similarities to Iran, southern France, Vienna or Berlin, says Rupnik, an associate professor of architecture at Northeastern University. “It sort of defies simple categorization,” he says, “which is what makes it so interesting.”
It wasn’t only the urban landscape that changed. So dynamic was local society, OZY reported last year, that the era spawned the Muslim world’s first-ever democracy. Though short-lived, the Azerbaijan Democratic Republic of 1918-20 reflected the cosmopolitan nature of budding capitalist society — one that was ultimately undone by the Soviet occupation that followed.
Nor was there only one oil boom in Azerbaijan, which spent decades as a Soviet republic before becoming an independent country in 1991. In reality, Rupnik says, it experienced three, each of which left an indelible mark on Baku and the rest of the country: the late 19th century; the Soviet era, when Azeri oil powered the communist superpower; and the 21st century, which saw the country reestablish itself on the world stage as a petrostate in its own right.
These days, oil-rich Azerbaijan is searching for ways to modernize its economy. That, analysts say, may prove tough, especially since the autocratic regime under President Ilham Aliyev hasn’t proven willing to do the same politically. But if history is any guide, it’s never too late for radical transformations.
- Dan Peleschuk, OZY Author Contact Dan Peleschuk