Price War

The price war between the oil giants came to an end. At the same time, the so-called БЂњSakhalin oil concessionБЂ«occupied a special place in the Soviet leadershipБЂ™s oil strategy, vividly demonstrating the priority political interests held over purely economic interests in the economic policy of the USSR in the 1920s. The story of the Sakhalin oil concession began back in 1921, when the Far Eastern Republic, an ally of Soviet Russia, began holding talks with the American company Sinclair on the development of oil-bearing land in North Sakhalin.40 With regard to the draft concession, the Bolshevik government thought: БЂњA clash of interests between Japan and America in the Far East would be extremely beneficial politically.БЂ«After the Far Eastern Republic joined Soviet Russia, the agreement with the Americans was endorsed in Moscow on January 26, 1923. Sinclair, however, was unable to begin developing the field as Japanese troops still remained in North Sakhalin. Moreover, the Japanese were extracting Sakhalin oil without permission from the Soviet government and without paying for it; in 1924 they extracted 13,300 tons of oil at the rich Okha fields ...»