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*What follows is to a large extent based on a very interesting book that I read, namely the journalist Lutz Kleveman’s “New Great Game: Blood and Oil in Central Asia”.
The First World War was the first war where the winner was determined by oil. The German Empire lost the war because it ran out of fuel. At the beginning of 1918, the conditions facing the German army were favorable. On March 1918, the Russian Communists (Bolsheviks) had deposed Tsar Nicolas II, but they needed soldiers to fight the remaining tsarist forces.
Lenin, who at the time was the Bolshevik negotiator, proposed the Germans to hold the Baltic Sea countries, plus Ukraine and Finland, in order to achieve a truce. But Erich von Ludendorff, the German army’s chief, required access to the oil of Baku too. In August 1918, the Turkish army, a German ally, was entering Baku. However this was a brief victory, since soon British troops from Persia (Iran) attacked the Turks and liberated Baku, depriving the German army from these indispensable supplies.
The Caspian oil also played a significant role in World War Two. At the beginning of 1942, the Germans attack on Russia, under Operation Barbarossa which had started in 1941, was already in progress. At the beginning of 1942, Hitler ordered Operation Blue, according to which the Germans would attempt to take control of the Caspian region, in order to get hold of the Baku oil, which was desperately needed. The German army literally ran out of fuel on the Caucasus. The Battle of Stalingrad was the failure of Operation Blue. You can see Stalingrad, today named Volgograd, just above the Caspian Sea region. The map is from
Initially Hitler refused to pull his army out of Caucasus. Finally, on January 1943, the German Army was ordered to retreat. The Germans did not gain access to the oil of Baku. Approximately two years later, the Russians were marching into Berlin. For Operation Blue you can also check the following link.
Baku is the capital of Azerbaijan, which used to be one of the Soviet Republics, and which gained its independence in 1991. Azerbaijan signed oil contracts with the American companies, in order to transfer Caspian oil and natural gas to Europe. However Russia considered Azerbaijan to belong in its sphere of influence, and wanted to stop this cooperation at any cost.
It was with the Russian support that Armenia, one of the neighboring countries, attacked Azerbaijan. During the period 1994-1997, the Russians provided the Armenians with 1 billion dollars in arms. The famous Russian missiles S-300 were part of this generous military support. Azerbaijan is a very important country for Russia, because the problem of the Americans is how to transfer Caspian energy, both oil and natural gas, from the landlocked Caspian region to the markets, thus limiting the Russian influence.
The only solution for the Americans to transfer Caspian energy to Europe was through Azerbaijan, Georgia and Turkey. This pipeline was also the only way for Azerbaijan not to be dependent on Russia. Russia approached its old rival, Iran, which is very hostile towards the Americans, in order to put Azerbaijan between Russia and Iran, and limit its capacity to cooperate with the west.
There are more spies than businessmen in Baku, most of them Russians and Iranians. However in 1999, President Clinton, met the presidents of Azerbaijan, Turkey and Georgia, and signed the agreement for the Baku-Ceyhan oil pipeline, which you can see at the above map, and which was finished in 2005. The pipeline transfers Caspian oil to the Turkish port of Ceyhan, the deep waters of which can accommodate large tankers. The source of the map is
Below you can see another map of the Baku Ceyhan pipeline from Wikipedia.
This was a partial victory for the Americans, since they also need to transfer natural gas to Europe, and both oil and natural gas to the South (Indian Pacific) and to East Asia i.e Japan etc, in order to limit both the dependence of their allies on the highly volatile Persian Gulf region, limiting the Russian influence at the same time.
In 2005, Professor Tuncay Babali, an advisor of the Turkish President, Recep Erdogan, estimated that the annual benefit of the pipeline would be 29 billion dollars for Baku, 600 millions for Georgia, and 300 millions for Turkey. You can see his paper at the following link.
For more information on the modern battle of the Americans and the Russians for Caspian oil you can go to the following links, which however are not based on Lutz Kleveman’s book, but rather on various other material.
“The Energy War Between U.S.A. and Russia”
“Why the United States Invaded Afghanistan”