As an economic experiment, the communist system of central planning constituted a major hindrance to development. This was especially true for Russia’s oil sector.
In 2017, Russia ranks among the world’s largest oil producers, contributing about 12 percent of global production. That production percentage is similar to that of a century ago: in the revolutionary year of 1917, around 15 percent of the world’s petroleum came from the oilfields of Baku, which at that time was part of the Russian Empire.
Between the booms of pre-Revolutionary Baku and post-Soviet Russia, the Soviet Union built its own massive and globally influential oil sector, although it operated in ways that differed substantially from the world’s capitalist oil industry. The major Soviet discoveries of oil deposits in the Volga-Urals during the 1940s and 50s (prompting the region to be dubbed as the ‘Second Baku’) and in Western Siberia during the 1960s and 70s thus flowed along distinctive paths—into the world’s first socialist oil industry.
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