Almost from the start of the international oil boom of the late 19th century, Russia was a major player. The city of Baku, now in Azerbaijan but then a southern outpost of the empire, was producing half the world’s oil in 1900, and though it lost market share during the years of revolution and civil war, Russia remained an oil power through the Soviet era. Soviet geologists discovered oil in the Volga-Urals basin and then, most rewardingly, in western Siberia. The Samotlor field, discovered in 1965, was one of the largest in the world, and its oil would subsidise Soviet military and social programmes throughout the period of late socialism, right up until the collapse of world oil prices in 1985. In a lesson about oil dependence that was quickly forgotten, the price collapse was followed by the collapse of the entire country.
Since 1991, two things have happened to Russian oil. First, as the Russian economy was opened up to global competition, hydrocarbons became not less but more important: no one wanted Russian cars or electronics or Russian shoes, but Russian oil was pretty much as good as any other. And so the great post-Soviet fortunes were largely oil fortunes. It was oil that paid for Roman Abramovich’s purchase of Chelsea football club, and it was oil that paid for Mikhail Khodorkovsky’s attempt to mount a challenge against Vladimir Putin. Most important of all, it was oil that paid for the Russian economic “miracle” of the Putin era, when oil prices rose steadily for years on end, and Russian living standards with them, and Putin got all the credit.
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