ABSTRACT
Since its origins in 1875, oil and gas development in the Caspian has had a long and chequered history, and Baku oil has not always lived up to investor expectations. Nevertheless the early development of oil at Baku with its international oil terminal at Batumi on the Black Sea laid down the technical and commercial foundations of global oil. In 1900 Baku oil production led the world. But it was also a time of serious exploitation of the oil workers that led to socialist revolution in the Caucasus. Yet Baku oilmen were amongst the first to demonstrate the competitive advantage of applied technology. The commissioning of the Baku-Batumi pipeline in 1905 saw the construction of the world’s first long distance trans-national pipeline for oil exports to international markets. Also from pioneering investments at Batumi, the Rothschild family set new parameters for risk financing in international oil and gas. But from its earliest days Baku oil was sensitive to the global oil price. Before the First World War this involved international price wars between oil producers in Europe and the United States.
