After the discovery of oil fields, Baku became a special place, where various economic and political interests of international coalitions, industrial clans and leaders were concentrated and clashed. VK begins publishing chapters from the book by Ismail Agakishiev "History of the Baku Oil Industry and the Second Oil Boom (second half of the 19th century - beginning of the 20thcentury.)". The book presents a historical analysis of the emergence and current state of the Azerbaijani oil industry.
However, on October 30th 1918 the Ottoman Empire signed the Armistice of Mudros with the Entente. Turkey practically acknowledged its defeat in the war. Based on the armistice, Turkey evacuated its military forces from Baku, and the city came under the influence of the Entente.
In connection with that, the Azerbaijani delegation met with the commander of British troops, General Thomson, in Anzali. The Azerbaijani government was ordered to withdraw its troops from Baku 2. With the arrival of British troops in Baku the intentions of the UK became clear. General Thompson immediately announced that he had a mandate for the occupation of Baku supported not only by the international community, but also by the All-Russian Provisional Government in Ufa and a number of anti-Bolshevik parties. Thomson often talked about solidarity with the White Guard in the preservation of Russia as a "single and indivisible" unity and, in fact, questioned the viability of an independent Azerbaijani state. Soon, however, Thompson informed the command of the Volunteer Army, which was controlled by Denikin that it did not have a right to cross the Kyzyl-Burun-Zagatala line. He claimed that "all Russian factories, railways, institutions and property on the territory of Azerbaijan belonged to him. The Volunteer Army was only able to rent them based on agreements with the Azerbaijani government" and that "the Voluntary Army could not consider Baku and Dagestan as its base."
Thus, with time, Britain began to consider the possibility of separating Azerbaijan from Russia as a more effective means of acquiring the oil wealth. The British were well aware that in the capacity of guarantors of Azerbaijani independence, they could count on solid concessions on the part of the Azerbaijani government. These calculations were well-grounded.
On November 17th 1918 the Turkish troops left Baku and the British troops led by General M. M. Thomson, who had declared himself governor-general, arrived there. The British immediately established rigid control over the export of oil. The former owners of the oil fields kept their possessions, but their right to export became limited: it required a special permit from the new masters of the city. Being in their grips, the Azerbaijani government openly made concessions to the British. Already on December 12th 1918 the Council of Ministers of Azerbaijan issued a decree by which the Ministry of Trade and Industry was to meet "all the requirements of the Allied forces concerning the export of petroleum products." Another resolution provided the British commanders the right of free import and export of goods without special permission and without taxes.
The British made full use of access to the oil wealth of Azerbaijan. From November to December of 1918 oil and oil products were almost not exported from Baku. The British decided to increase oil reserves to provide their army with cheap raw materials for the future. However, from December 10th 1918 until May 1st 1919 all in all 85% of all fuel and 72% of all gasoline were exported from Baku to Batumi at the disposal of the British command. In any case, in 1919 the British had a complete monopoly on the export of oil. During that time the market price for oil was only 2 rubles per pud. In this regard, the researcher A. Igolkin noted that "those who were able to export oil products pocketed huge profits, almost great, almost a tenfold return on every invested ruble." 1 An exemplary circumstance: in fact, the British almost did not pay anything for oil products and wrote off the debts of petroleum businessmen to the state bank. 2 But even in this case, the British acquired the petroleum products at prices which were 25% below world market prices.3 Oil owners were allowed to export kerosene more freely, but the amount of exported product was not sufficient to cover the costs of the oil companies. This policy led to a shortage of money. There was a unique economic situation: having and realizing a great part of their large oil reserves, Azerbaijani companies were left without working assets. Attempts by the Azerbaijani government to improve the situation with the help of loans secured by crude oil had no lasting effect. Under the conditions of that time the export of petroleum products was the main problem.
The Civil War in Russia considerably shrunk the market. According to Igolkin, in 1919 Baku produced 225.3 million puds of oil. The British were putting all their efforts into blocking exports of oil to Russia, which always used to be the traditional market for Baku oil. The Azerbaijani government did not dare to go against the British.
