Russia and Caucasus Observatory

Caucasus Essentials Pt.2 – Caucasus in the short Twentieth Century: Dealing with oil, domination and war

by Giovanni Zorra*

In the previous part, we tried to resume all those geographical issues which are relevant for a better understanding of the Caucasus. This second contribution approaches the region on the historical side, addressing the focus on three macro-arguments, which can provide an interesting reading key. These three arguments are broad and obviously they cannot be exhausted with these highlights. At the same time, it is necessary to keep them in consideration as frame for any further deepening.

The Oil Rush

In the previous article, we affirmed that Caucasus was disputed for its geographical position but not for intrinsic reasons. This started to be no longer so true when Azerbaijani oil wells met the industrial revolution.

Even if Azerbaijani oil extraction was reported already in Marco Polo’s travels, it remained almost an artisanal activity up to the end of the XIX Century. The real turning point was the beginning XX Century, when Azerbaijani oil industry, under the control of the Tsarist Russia, started growing up to the point to become the main world producer. This incredible opportunity attracted capitals from the main Western countries and from the major capitalist families (Rockefeller, Rothschild, Nobel). Everybody was there, everybody trying to get their piece of the cake, world and regional powers, companies and even lone adventurers.

The Caucasus sow a fast development of an industry sector and financial services related to oil extraction, processing and export. One more time the region was the centre of a rush from external actors. This tendency exploded in the first decades of the century, in particular as consequence of the WWI. To notice as even Bolsheviks, conscious of the potential of this industry, tried to keep high the production; Lenin himself invited western companies to keep working in oil wells.

This rush had its symbolic pick with the Battle of Stalingrad, last attempt of Nazi Germany to reach the Caucasus and Azerbaijani oil wells, which could have represented new “fuel” or the already struggling Wehrmacht. After the WWII, production of oil decreased slowly. For several reasons, but mostly because Russian-centric USSR was scared by a too influent Caucasus.

The Oil and Gas sector had a second rush in the 90s, after the independence of the Caucasian Republics, becoming one of the economic and geopolitical engines of the new Caucasus.

Soviet Era

October Revolutions appeared as a new beginning for the population under the control of the Tsarist Empire. Chaos and hope condensed first in the aleatory Federative Transcaucasia (from February to May 1918), later in the three Democratic Republics (Armenia, Azerbaijan and Georgia) which, even if they were backed by European Powers, had short life too, being forcedly absorbed by Soviet Union between 1920 and 1921. This short as much as enthusiastic period is still considered the funding moment of the three modern Caucasian Republics.

Modern Caucasian Republics call this period “occupation”, implying their peoples kept a submissive role in the power dynamics inside the Union. This remains a questionable statement.

During those contradictory years the Caucasus undoubtedly played a role in soviet politics. Thanks to the influence of local communist political class (from Stalin onwards), Caucasians Soviet Republics always maintained a certain level of independence and wellness even in the darkest periods of authoritarianism. Even more, the Caucasus, with its rich cuisine, its famous wines, the warm climate and impressive landscapes became, the holyday place by excellence for the nomenklatura and for the tiny Soviet “middle class”

During the World War II, the Caucasus contributed strenuously to the cause of the “Great Patriotic War”, providing one of the highest numbers of soldiers in relation to the population. Stalingrad Battle and all Volga Line were considered by locals as a struggle to defend their land and even civils were involved in the effort. Today, in the Caucasian Republics the Victory Day, on 9th May, still commemorates the defeat of the Nazi enemy.

In the second half of the XX century, Caucasus gradually lost its relevance in the internal dynamics of the USSR. This can be considered a deliberate decision to prevent independentist sentiments. The main strategy was a slowing down of the production of oil and the shifting from high value agricultural products (wine, oil, fruit) to monocultures. Besides, there was a push of popular internal tourism.

All these moves had the same goal: increase the level of dependence from Russia. This had, and partially still has, tremendous consequences on the economy of the region.

It is not easy to say if it was a cause or a consequence of this distrust, but it is sure that time before the 1989, local communist élites were working to perpetrate their power, even after the end of the soviet experience. They were playing with dormant national sentiments, accusing Moscow of those problems afflicting their countries, not always with good reasons; in Georgia and Armenia, they created a hidden alliance with local Churches, to prepare people about the idea of nation and independence.


When, in 1991, Armenia, Azerbaijan and Georgia obtained their independence through referendums, the situation was ready to escalate. Heavy nationalistic rhetoric was at that point normalized, territorial claims were on the agenda of new republics as well as of minorities. And the heritage of soviet domination consisted also in a huge amount of military supplies, almost abandoned in several sites.

Tragic consequence of this situation was a puzzle of territorial wars, often backed by ethnic and nationalistic motivation, always interlined with the will of power of new and old leaders, ready to do all the necessary to maintain their dominance. An explosive situation.

The climax brought Georgia to a bloody civil war (1991-1993), passing through the conflicts in South Ossetia and Abkhazia, the intervention of Russian forces and a coup d’état in Tbilisi. This war ended with few losers and no winners, freezing an uncertain calm between central government and breakaway regions.

In Azerbaijan, a couple of years of tensions and attempts of ethnic cleaning (from both sides) evolved in an open confrontation between Armenian and Azerbaijani armies (1992-1994), ended with the occupation the Azerbaijani region of Nagorno-Karabakh by Armenian forces. A situation which lasts until now.

These conflicts were dramatic but brief, since they were officially closed in a couple of years. They left behind a series of open issues, a huge number of internal displaced people, a general revanchism feeling and the cumbersome presence of the Russian big brother, unwilling to be left out of the picture.

This brought to a normalization of violence in internal political speech, in particular dealing with minority issues. So, when in 2008, during the opening night of the Beijing Olympic Games, Georgian army tried to get back South Ossetia with a military expedition, no one was really surprised.

The early enthusiasm flaunted by the Georgian government leaded by Mikhail Saakashvili was soon damped by Russian intervention. In a few hours the Kremlin totally overturned the situation in favour of South Ossetian forces, bombing some Georgian cities and reaching the suburbs of Tbilisi with its tanks.

The consequence of this 9 days war was exactly the opposite of what Georgian authorities expected to reach: from that moment Russia would have recognized Abkhazia and South Ossetia as state entity, putting a strong protectorate on them.

Similarly, the Nagorno-Karabakh conflict too never reached a solution and it is now considered a frozen conflict. There are often irrelevant skirmishes, more by habit than backed by any tactics. Only in April 2016 there was a real resurgence of conflict, with the so called “Four Days War”, as violent as totally useless for both sides.

Suggested readings:

Le Vinne Steve, “Oil & glory”, Random House Inc, 2007

Tierke Wilhelm, “The Caucasus and the Oil: German-Soviet War in the Caucasus, 1942/43”, Fedorowicz, 2008

*Since he was a teenager Giovanni has always been interested in politics. Over time he has developed a peculiar interest in public institutions and their functioning, which has resulted in the decision to graduate in European Affairs. Nowadays, Giovanni is working as researcher for the University of Bologna in the field of public administration. His main themes of interest consist of Eastern Partnership (specifically Caucasus), geopolitics of energy, cybersecurity, EU politics.

By Giovanni Zorra

Un bresciano europeo, da non prendere troppo sul serio.

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