** economics raw material fuel oil

Country Oil Industries: Soviet Union

Figure 1.-- Baku on the Caspain Sea was the center of the Soviet oil industry. It is now modern Azerbaijan/ Here in the oil fields of Baku, children are scoopimg up polluted oil for heating and cooking during the 1930s. You can see the oil rigs in the background.

Oil from an eraly point became an internationally traded commodity. The reason for that was that for the most part, witth the exception of America, oil waas found in countries with little use for it. And the countries that needed it (Europe) had very limited resources. Shell helped pioneer the oil tanks that could move oil around the world. There was one exception -- the Soviet Union. The Soviets had huge oil resources, only partially developed. Indfustrial develoopment began during the final years of the Tsarist Empire just as oil was becoming an important commodity. There were exports, although the indudtry based along the Capian Sea in modern Azerbaijan suffered from under investment. The Russian Revolution put this resource in the the hands of the new socialist Soviet Union with its totalitarian leadership. The energy policy of the Soviet Union was an important element of the country's planned economy. The Soviet Union, unklike most European countries, was basically self-sufficient in oil. Several European countries had impportantb coal resources, but only Romania has an important oil resource. And by the time the Soviet Uniin was created, oil was becoming increasingly important, both for the economy and military. Stalin's pursued an econiomic policy of autarky. Soviet economic growth was to a large degree based on keeping labor costs low and large inputs of domestic natural resources, including oil. There was no price mechanism in the Soviet economy. As a result, the actual valuev of Soviet manufactured goods were commonly less than the value of the production inputs. The Soviet oil industry was based in the Caspian area in modern Azerbaijan -- Baku 1 bordering on Iran. The Soviers at the time of World War II were planning an enormnous increase in oil production based on Baku 2 -- an area between the Volga and the Urals. [Nazaroff, p. 81.] This huge oil resource was unknown to the Germans, but just Baku 1 was a major objectibe when Hitler launched Operation Barbarossa, the invasion of the Soviet Union (1941).


Nazaroff, Alexander. "The Soviet oil industry," ?The Russian Review Vol. 1, No. 1 (November 1941), pp. 81-89.


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Created: 8:13 PM 2/18/20211
Last updated: 8:13 PM 2/18/2021