Nature's Evil

A family of Russian entrepreneurs of Swedish origin, the Nobels, established their first refinery in Baku in 1876. The father had been making equipment for the Russian Navy for decades, and three sons inherited his business in St Petersburg. In 1873, Robert Nobel went to the Caucasus to purchase walnut timber for a new model of rifle but spent his funds instead on buying oil parcels. By 1916, the Nobel Brothers company, Branobel, controlled a third of Russian oil and the largest private fleet in the world. They transported kerosene across the Caspian Sea on tankers – the first was named Zoroaster – and then up the Volga. 8 Working for the Nobels, the brilliant Russian engineer Vasily Shukhov was the first to use the residue left after the production of kerosene. After a trip to the International Exhibition of Arts and Manufactures in Philadelphia in 1876, he invented an injection nozzle that allowed steam engines to run on oil fuel. Thanks to his inventions, ships and locomotives in southern Russia used oil instead of coal. This was a sign of progress: nowhere else was oil used so widely.

The population of Baku – the Caucasian Eldorado – swelled thanks to the influx of people, who lived cheek by jowl and ran their ethnic businesses. The Russians and Germans operated oil derricks, the Armenians and various Europeans controlled trade, and the Muslim Azerbaijanis worked as unskilled labourers. The Russian administration, led by a Georgian governor, reined in over-energetic Armenians. Social-democratic propaganda circulated in the oilfields. A young Georgian, who went by the undercover name of Stalin, led the agitation. In December 1904, he took part in a successful strike by oil workers: dozens of rigs on Nobel’s oilfields were set on fire, and the employers agreed to a nine-hour working day. Stalin later wrote, tongue-in-cheek: ‘Thanks to the strike, a certain order was established, a certain “constitution”.’

In 1888 the young Calouste Gulbenkian, a graduate of King’s College London, arrived in Baku. He was hired by Alexander Mantashev – a flamboyant Armenian millionaire who toured his oilfields on horseback and distributed cash without dismounting; he was also celebrated for the orgies which he held all over Europe. A refugee from the Armenian massacres, Gulbenkian went on to start up his own oil companies and sell them on. Each time he founded a company – Shell, Total and others – he retained 5 per cent ownership. ‘Better to have a little piece of a big pie than a big piece of a little pie,’ he used to say. Acting as middleman, he was able to create an oil empire of his own. The title of his recent biography, like that of Jakob Fugger, includes the phrase the World’s Richest Man . 9

With the demand for oil increasing every year, Baku was booming. But in 1905 bloody conflicts broke out between the Armenians and the Azerbaijanis. Hundreds of people died every day in street fighting, the governor was killed, and thousands of families fled from the town. The events in Baku coincided with strikes by factory workers in St Petersburg – they laid the ground for the first Russian revolution. In August 1905, a spectacular fire broke out in Baku, and most of the oilfields and refineries went up in flames. The export of kerosene from Russia halved, tax receipts dwindled, and even the bread supply to the Russian capital was under threat. The pipeline to the Black Sea finally opened in 1906 – its sponsor was Alexander Mantashev, the kerosene king. The Rothschilds’ Caspian company also extended its railway to the Black Sea. It so happened that the delivery routes opened at exactly the moment when production fell dramatically – the oilfields had been largely destroyed by fire or sabotage.

The unrest in Baku continued. The oil colony was turning into the empire’s gravedigger. The Donets coal basin also saw a powerful strike that turned into an armed uprising. Sprawling, overpopulated Baku was like the mining towns of the Donbas, but the bloody chaos there was different. The miners took part in the general strike and revolution of 1905 that led to the creation of the Russian Parliament. Destructive and isolated, the Baku events were provoked largely by ethnic conflicts, local propaganda and the vicious circle of violence. But it was actually Baku rather than Moscow or the Donbas that was the cradle of Soviet power.