Kamran Nasirli writes:
When speaking about Azerbaijani oil, it is important not to confuse “the first extraction of oil” with “the first industrial oil production.” Oil had been used in Absheron since ancient times, but the beginning of the modern industrial stage is usually considered to be the first mechanically drilled well in Bibiheybat in 1846.
Between 1863 and 1872, Baku’s oil production increased from 395,470 poods to 1,536,000 poods. This is approximately 25.2 thousand tons, or about 184 thousand barrels of annual production. On average, this equals around 500 barrels per day. At today’s approximate price of 75 dollars per barrel, the annual gross value of this volume would be about 13.8 million dollars.
However, the “real big oil money” appeared in the late 19th and early 20th centuries. According to official sources, Azerbaijan produced 11 million tons of oil in 1901, which accounted for more than half of global production. Eleven million tons equals approximately 80.6 million barrels. At today’s price of 75 dollars per barrel, this scale would mean an annual gross value of about 6.05 billion dollars in current prices. In other words, Azerbaijani oil first began on a small industrial scale, but within a very short period it turned into a source of wealth of global significance.
This money did not go only to “Azerbaijani millionaires.” Local oil entrepreneurs such as Haji Zeynalabdin Taghiyev, Musa Naghiyev, and Shamsi Asadullayev gained enormous wealth during that period, and official Azerbaijani sources present them as the main figures of a new generation of local entrepreneurs. At the same time, foreign capital was also very powerful. According to an official source, the Rothschild bank controlled 42% of Baku’s oil exports. Other historical reviews show that, on the eve of the First World War, several major foreign-Russian corporate groups controlled a large part of production. Both local Azerbaijani millionaires and foreign capital earned enormous revenues from oil; in many stages, the main export channels were even under the control of foreign financial groups.
During the period of the Azerbaijan Democratic Republic, the situation was different. The ADR wanted to benefit from oil, but war, the closure of markets, transportation problems, and political instability seriously hindered this. Historical reviews indicate that 3.6 million tons of oil were produced in 1919, but due to the closure of the northern market, only 0.6 million tons were exported. 3.6 million tons equals approximately 26.4 million barrels, while 0.6 million tons equals about 4.4 million barrels. If we calculate this at today’s price of 75 dollars per barrel, the gross value of all oil produced in 1919 would be about 1.98 billion dollars, while the value of the exported part would be about 330 million dollars. Therefore, the ADR possessed oil wealth, but it could not fully monetize it.
At the same time, oil indirectly played an important role in the ADR budget. Economic reviews of that period identify customs duties and especially excise taxes applied to oil products as among the main sources of state budget revenue. Yes, the ADR was able to benefit from oil, but only in a limited way. The state could not extract stable and large-scale revenues from oil. Nevertheless, oil still remained one of the main pillars of the budget.
After 1920, the Soviet stage began, and the issue became much harsher. Oil was no longer treated as market revenue, but as an imperial resource. Historical studies show that, for Lenin, Baku oil was essential for the survival of Soviet Russia. After Bolshevik rule was established, the oil sector was nationalized, and Azerbaijan’s oil industry was entirely directed toward the needs of the USSR. Official and academic sources show this clearly: Baku oil was one of the main instruments used to supply Soviet Russia.
The volumes extracted during the Soviet period were enormous. In 1941 alone, Azerbaijan produced 23.5 million tons of oil, which accounted for 71.4% of total USSR production. According to official sources, during the war years Azerbaijani oil workers supplied the country with 75 million tons of oil and 22 million tons of gasoline. This fact alone shows that Azerbaijan’s wealth was directly one of the supporting pillars of the Soviet military-industrial system. 23.5 million tons in one year equals approximately 172 million barrels. At today’s prices, this scale is worth tens of billions of dollars.
Data related to 1971 states that the total amount of oil extracted up to that year had reached 1 billion tons; in simple terms, a jubilee was celebrated. The newspaper Pravda, materials of the USSR State Statistics Committee, and Soviet industrial reports confirm this.
This 1 billion tons includes both the Tsarist and Soviet periods. If we want to separate them: the Tsarist period, approximately 1870–1918, produced around 200–250 million tons, which equals 1.4–1.8 billion barrels. At today’s price of 75 dollars per barrel, this would be worth 100–135 billion dollars.
For comparison, Tsar Alexander II sold Alaska to the United States in 1867 for only 7.2 million dollars, which is equivalent to approximately 120–150 million dollars in today’s prices.
Just imagine how valuable Azerbaijan appeared compared to Alaska.
Although various regions in the post-Soviet space played important roles in the imperial economy, in terms of a highly profitable resource integrated into the global market, no other republic created the same level of economic value as Azerbaijani oil. Ukraine fed the empire; Azerbaijan financed the empire.
During the Soviet period, by 1991, the final figure generated from black gold must have been even higher. Therefore, for the Soviet period, approximately 1.0–1.3 billion tons can be taken as a conservative order-of-magnitude estimate. This equals 7.33–8.80 billion barrels. At today’s price of 75 dollars per barrel, the gross value of this production would fall within the range of approximately 550–660 billion dollars. This is the estimated gross value, in today’s prices, of oil extracted from the territory of Azerbaijan during the Soviet period.
During the Soviet period, Azerbaijani oil created wealth equivalent to hundreds of billions of dollars, and its main beneficiary was not the Azerbaijani budget, but the central Soviet system. Baku oil was the strategic fuel of Soviet industrialization and the wartime economy.
In the period of independence, the model changed. In Azerbaijan’s official energy policy, the turning point is considered to be the 1994 “Contract of the Century.” In the following stage, with the BTC pipeline and other export infrastructure, oil and gas revenues began to enter Azerbaijan’s own state financial system. The strongest official indicator for this period is SOFAZ. According to official data as of September 2025, SOFAZ’s assets stood at 70.16 billion dollars. Moreover, by the end of 2025, this figure reached around 73.5 billion dollars. At the same time, according to statements by SOFAZ leadership, since its establishment the fund has transferred more than 140 billion dollars to the state budget. In other words, public oil and gas money passing through SOFAZ alone already exceeds 210 billion dollars. This figure does not include revenues retained by SOCAR itself or separate tax flows. Therefore, the total sector revenue of the independence period is even higher.
This can be summarized in one sentence: during the Tsarist period, Azerbaijani oil created wealth both for local millionaires and foreign capital; during the ADR period, oil existed, but could not be fully utilized; during the Soviet period, oil was mainly used for the central USSR system; and during the independence period, at least 210 billion dollars of oil revenues have visibly accumulated within the state financial system.
Approximately 2.2 billion manats enter the country every month. This equals 66 million manats per day, 2.7 million manats per hour, 46 thousand manats per minute, and approximately 770 manats per second. In my calculations, I use an approximate low price of 70 dollars per barrel. As of today, 02.04.2026, prices are 112 dollars; if we calculate based on 112 dollars, or even take 100 dollars as an average figure, the numbers would increase by around 30–35%. In other words, it would not be 2.2 billion manats, but more than 3 billion manats.
The calculations are based on current realities. That is, daily oil production has been taken at approximately 600 thousand barrels, which corresponds to Azerbaijan’s current production figures.
At the same time, it should be noted that Azerbaijan has also experienced periods of higher oil production. For example, in the 2010s, daily production rose to nearly 1 million barrels. During that period, with production of 1 million barrels and a price of 90 dollars, daily revenue reached approximately 153 million manats, while monthly revenue reached around 4.6 billion manats. This was equal to 95% of the oil volume and revenue generated in Kuwait.
Of course, this is not net income; there are general expenses. After deducting the shares of foreign companies and costs, oil revenue first goes toward covering expenses, and then the remaining funds are redistributed among the companies. At this stage, foreign companies both recover their costs and additionally receive a share of the profit.
In the modern period, Azerbaijan produces approximately 600 thousand barrels of oil per day, which means more than 200 million barrels per year. SOCAR alone had a total turnover of 119 billion manats in 2022.
For comparison, during the period of the Azerbaijan Democratic Republic, daily production was approximately 100 thousand barrels. This is about six times less than the current figure.
In other words, in the modern period, both in terms of production and financial turnover, Azerbaijan’s oil sector has grown many times compared to the historical period.
The oil money that has passed through this country is no longer merely in the hundreds of billions, but far above hundreds of billions — at the level of several hundred billion dollars. In some calculations, this figure is estimated to be close to half a trillion.
This means approximately 500 billion dollars. This is equal to Azerbaijan’s entire economy for 6–7 years. With this amount, each citizen would receive approximately 50 thousand dollars. With this money, it would have been possible to build thousands of kilometers of metro lines and millions of apartments.
The construction of a fully modern sewage and drainage system for Baku is estimated at approximately 5–10 billion dollars. This is only a few percent of the oil revenues that passed through the country during the independence period.
What do we see in return for such wealth?
Here, I am drawing your attention only to the funds generated from oil. These figures do not include gas, other natural resources, or additional sources of income.
Now let us compare.
When we look at neighboring Caucasus countries — Armenia and Georgia — we see that they do not have any serious oil reserves. They do not possess such billion-dollar resources.
Nevertheless, in these countries, rain does not paralyze cities, people do not remain trapped in water, and basic infrastructure does not experience collapse at this level.
Therefore, the issue is now completely clear: the problem is not the absence of resources. The problem is how those resources are used.
Kamran Nasirli.
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