Baku, sometimes known as Baky or Baki, is the capital and the largest city of Azerbaijan, a tiny former Soviet Republic that shares the distinction -along with the U.S. -of being the only two countries to have been the world's majority oil producer. The basis of Baku's economy is petroleum, the existence of which has been known since the 8th century. In the 10th century, the Arabian traveler, Marudee, reported that both white and black oil were being extracted naturally from Baku. By the 15th century, oil for lamps was obtained from hand-dug surface wells.
In 1872, commercial exploitation began and the oil belt of Baku became known as a lack City. Shortly thereafter, legions of Swiss, English, French, Belgian, German and American firms set up shop there, including those of the Nobels and Rothschilds. By the early 1900s, Baku was producing half of the world's oil supply; the city had more than 3,000 oil wells, of which 2,000 were producing oil at industrial levels
Towards the end of the 20th century, much of the onshore petroleum had been exhausted, and drilling had extended into the sea offshore. The World War II Battle of Stalingrad was fought to determine who would have control of the Baku oil fields. In 1940, 22.2 million tons of oil were extracted (72% of all the oil extracted in the USSR). During the Soviet-German War, ten defense zones were built around the city to prevent a German invasion. In 1941, the Baku workers extracted a record level of oil -23.482 million tons, an amount that has not been surpassed till date.
Azerbaijan and the United States are the only two countries ever to have been the world's majority oil producer.
Currently the oil economy of Baku is undergoing a resurgence, with the development of the massive Azeri Chirag Gunashli field and the Shah Deniz gas field.
In April 2006, news sources reported that a 1,000-mile pipeline would begin pumping oil from Azerbaijan's Caspian Sea coast, through neighboring Georgia, to a Turkish port on the Mediterranean Sea. Industry experts say this pipeline will allow Azerbaijan to eventually quadruple its oil exports, but political opponents in Azerbaijan worry that the oil money will help the government of the former Soviet republic stifle pro-democracy efforts. The $4 billion project is backed by the United States, in part because it gets Caspian Sea oil wealth out to the international market, without going through Azerbaijan's much larger neighbors, Russia and Iran.
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