The industrial history of Azerbaijan is largely a history of oil. Iron, copper and other ores also lie in the country's soil, but mining remained comparatively modest. Agriculture dominated the territory of the present-day state until the run on oil began.

Oil and its by-products have been used for thousands of years: Bitumen as early as prehistoric times to seal boats, later asphalt in the road construction of the Babylonians. In the early Middle Ages, historians first reported on the natural oil sources on the Abşeron Peninsula on the Caspian Sea. Marco Polo told of oil from the region that was transported on camels over the Silk Road. It was used as a medicinal remedy, as fuel for lamps and for "Greek fire", a weapon similar to a flamethrower. However, a boom did not set in until the middle of the 19th century, when petroleum lamps became popular for households and street lighting.

Under the tsars, masters of most of present-day Azerbaijan since 1813, the first successful oil drilling took place on the Abşeron peninsula in 1846. Subsequently, factories for crude oil products such as paraffin and paraffin were established. When the Russian government began selling state-owned land in Abşeron and granting oil concessions in 1872, the drilling rigs just shot out of the ground. Foreign investors from the booming European industrialised countries flooded into the country, and the centre of oil processing known as the "Black City" developed in Baku. On the "white" side of the rapidly growing metropolis, Robert and Ludvig Nobel had the prestigious "Villa Petrolea" built, which today houses a museum of the oil industry. The Nobels, like their brother Alfred both entrepreneurs and inventors, founded the company "Branobel" in 1878, developed steel oil tanks and laid the first pipelines from the oil wells to their refinery. To speed up transport to the heart of the Tsarist empire, they commissioned the first seaworthy oil tanker, which then carried the "black gold" across the Caspian Sea to the Volga.

"Branobel" was soon one of the largest oil companies in the world, but in 1883 Alfons Rothschild established a competing distribution channel: he financed a railway line from Baku to the Georgian Black Sea port of Batumi in order to supply his refinery on the Mediterranean with crude oil by ship from there. Russia, together with the USA, now produced almost 100% of the world's oil. Baku became a multi-ethnic metropolis with European flair, but in the rest of the country the economy stagnated. Despite successful innovations such as rotary drilling, oil production in Abşeron declined from the turn of the century onwards.

The first Azerbaijani state, founded in 1918, was occupied by the Red Army two years later. The Soviet Union immediately intensified oil production: foreign companies were granted concessions and new fields were developed. In 1920, the Polytechnic Institute, today's "State Oil and Industrial University", opened in Baku as the first training centre for engineers in the oil industry. In 1928, natural gas production also began. In 1947, the first oil wells were drilled in the Caspian Sea.

The industrial district in Kirovabad (now Gǝncǝ) contributed to economic diversification, where an aluminium smelter, chemical and textile factories were built before the Second World War. In 1948, the construction of a large hydroelectric power plant on the Mingǝçevir reservoir led to the emergence of the city of the same name, which was mainly home to light industry for the production of building materials and textiles. North of Baku, with its countless refineries, Sumqayıt, the most important foundation, was established in 1949 with chemical plants for the further processing of crude oil; in addition, energy-intensive companies such as an aluminium smelter and a tube and rolling mill began operating there.

From the 1950s, Azerbaijani oil lost importance because new fields were discovered in the Volga-Ural region and later in Siberia, but oil and gas remained the country's most important economic factors. Since the USSR disintegrated, Azerbaijan has therefore been at odds with other former Soviet republics that still depend on the subsidised energy supplies of the socialist economic network.

Azerbaijan was a union republic of the 'Union of Soviet Socialist Republics (USSR)', which was dissoluted in 1991.
Therefore, for completeness, also read our articles on the industrial history of the other former soviet republics