The study of problems related to the modernization of the oil industry at the end of the 19th - beginning of the 20th centuries allows asserting that the rapid technical re-equipment of oil refineries was due to the targeted state scientific and technical policy that was being implemented at that time, as well as to the highly effective system of privileges (patents) and mass promotion of technical knowledge and achievements. Besides, the role of entrepreneurs that supported individual inventors and research companies providing "brain gain" and investment in Russia was also significant. This contributed to the rapid introduction of technical innovations in production. Thus, the transition to extensive use of oil as industrial fuel contributed to a more intensive development of the factory industry. Modernization of the oil industry became a powerful incentive and, at the same time, a part of Russian industrialization. One of the most successful and quickly implemented innovations that were at the same time crucial for the changing nature of the Russian energy sector and the economy in general was the invention of "Nobel burner". It seemed that this solved the problem of oil residues. However, it proved to be extremely uneconomical to burn large amounts of oil fuel under the boilers of steam engines. Thus, "oil" energetics formed. The "oil imbalance" resulted in the suppression of the coal industry of the country. At the same time identifying the causes of the fuel crisis as one of the most important factors that led to the collapse of the Russian Empire allowed us to formulate a conclusion that the decline in oil production and increased demand for fuel oil in the First World War by the military and metallurgical industries, railways, the shortage of fuel and rising prices led to the disorganization of the whole economy, disruptions in the supply of food, raw materials and weapons.