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Azerbaijani Politics Oil / Natural Gas / Green Energy

Ukraine eyes key role in Azerbaijani gas transit to Europe

COMMENT: Ukraine eyes key role in Azerbaijani gas transit to Europe

Ukraine is positioning itself as a key transit hub for Azerbaijani gas to Europe, a move that could significantly alter the region’s energy landscape.

If successful, this would carve out a new role for Kyiv after Russian supplies stopped flowing to the rest of Europe via Ukraine on January 1, pushing up European wholesale energy prices.

The expiration of the Russian gas deal at the beginning of 2025 and Kyiv’s decision not to prolong the agreement triggered heated debates within the European Union as countries like Hungary and Slovakia harshly criticised Ukraine, accusing it of igniting the energy crisis with no drastic impact on Russia.

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Azerbaijani Politics Oil / Natural Gas / Green Energy South Caucasus Region Turkey-Azerbaijan Partnership

Azerbaijan’s SOCAR Invests in Türkiye’s Energy Sector

SOCAR Turkey expects rise in EBITDA to $1 bln in 2021 – The Tribune
Publication: Eurasia Daily Monitor Volume: 22 Issue: 6

Executive Summary:

  • On January 6, the State Oil Company of the Republic of Azerbaijan (SOCAR) announced plans to invest in Türkiye’s energy sector. This move would strengthen bilateral ties and allow Baku to expand its influence in Europe and the Middle East.
  • SOCAR is critical in meeting Türkiye’s growing natural gas demand while advancing eco-friendly initiatives such as sustainable aviation fuel production, aligning with Azerbaijan’s green energy strategies.
  • Azerbaijan’s soft power is fueled by SOCAR through investments and diplomatic engagement, including potential energy supplies to Syria. This reflects Baku’s multivector foreign policy amid shifting Middle East geopolitics.

On January 6, the State Oil Company of the Republic of Azerbaijan (SOCAR) announced plans to invest $7 billion in Türkiye’s energy sector in the coming years (Report.az, January 6). Between 2008 and 2024, SOCAR Türkiye, SOCAR’s local subsidiary, invested $2 billion into the development of the petrochemical facilities of the Petkim petrochemical company privatized by SOCAR. The total investments of the company in the Turkish economy accounted for more than $18 billion in the same period, making the company the largest foreign investor in the country (ABC.az, January 6).

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Azerbaijani Politics Pax Caucasia

Could Iran open new fronts against Israel and Azerbaijan?

Azerbaijan and Israel Hold Talks on Regional Security and Bilateral Relations

Hikmat Hajiyev, assistant to Azerbaijan’s President Ilham Aliyev, held a face-to-face meeting with Israel’s President Isaac Herzog and Foreign Minister Gideon Sa’ar in Jerusalem on December 9. This visit surprised many as the Jewish state continues to fight on several fronts against its enemies, including Hezbollah remnants repeatedly hitting more than 300 sites in Syria in recent days.

While Hajiyev’s trip came unannounced, it also came at a very critical and specific time in light of the overthrow of Syria’s Bashar Assad following 13 years-long bloody civil war. Although analysts for many years claimed that Bashar Assad “won the civil war” with the help of Iran and Russia, he prolonged the war, giving rise to a more solidified and regrouped opposition, which ultimately kicked out Iran’s fighters and the top-flight of the Syrian regime.

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Azerbaijani Politics Oil / Natural Gas / Green Energy

Will COP29 become a milestone in Azerbaijan’s long-term energy strategy?

COP29 çərçivəsində “SOCAR Green” və “PowerChina” şirkətləri arasında Anlaşma Memorandumu imzalanıb | Şərq qapısı

Despite its heavy reliance on fossil fuel exports for many years, Azerbaijan has now shifted its long-term energy strategy by steadily switching to renewable energy sources.

Thus, the 29th Conference of the Parties to the UN Framework Convention on Climate Change (COP29) in Baku became a vital platform for Azerbaijan’s main energy giant SOCAR and its affiliate SOCAR Green LLC (established in December 2023) to ink new agreements with countries and companies in the field of green energy, smart technologies and decarbonisation.

Focus on gas

It is noteworthy that SOCAR started supplying North Macedonia with natural gas on November 15, while Azerbaijan was hosting the major climate event on its soil. Considering that natural gas is the cleanest fossil fuel, in contrast to crude oil, Baku did not hesitate to announce the new partnership during COP29.

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Azerbaijani Politics Iran in Caucasus and Beyond Karabakh in the Post-War Period South Caucasus Region

New Azerbaijan-Iran Railway Agreement Grapples With Regional Tensions

News

Executive Summary:

  • In October, Azerbaijani and Iranian officials discussed the Aras Corridor railway project, a strategic alternative to the contested Zangezur Corridor, amid ongoing Azerbaijan-Armenia tensions and diplomatic efforts to enhance regional connectivity following the 2020 Karabakh War.
  • The Aras Corridor strengthens Azerbaijan–Türkiye–Central Asia ties and aligns with Iran’s International North-South Transportation Corridor, enhancing regional connectivity and trade routes toward Russia.
  • Azerbaijan’s focus on the Aras Corridor reflects regional tensions, including opposition to the Zangezur Corridor, Iran-Israel conflicts, and Russia’s war against Ukraine. The project highlights Azerbaijan’s strategy of adapting to navigate shifting alliances and maintain regional goals.

On October 15, Chairman of Azerbaijan Railways Rovshan Rustamov arrived in Tehran to meet his Iranian counterpart Jabbar Ali Zakeri Sardroudi to discuss the construction of a railway line linking Azerbaijan’s East Zangezur region and its Nakhchivan exclave through Iran (News.az, October 15). The meeting came amid intensive diplomatic negotiations between Azerbaijan and Iran regarding the Aras Corridor transit route linking Azerbaijan to Nakhchivan and further to Türkiye via Iran after a period of silence and diplomatic rifts between the two neighbors (see EDM, March 27).

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Azerbaijani Politics MENA in Turbulence South Caucasus Region

Can Turkey Undercut Israel’s Alliance with Azerbaijan Over the Gaza War?

Azerbaijan has built strong partnerships with Israel in energy and defense for the last two decades despite also maintaining ties with Turkey and Iran

The impact of the geopolitical turmoil in the Middle East stemming from the ongoing Israel–Hamas war extends far beyond the region.

Since Hamas’s brutal October 7 terror attack on southern Israel, Israeli forces have conducted large-scale military operations in Gaza to try to destroy Hamas and armed radicals affiliated with the militant Palestinian group. Although many countries in Europe and Asia voiced support for Israel at least initially, others have tried to remain neutral, while countries such as Iran, Russia, Turkey, Ireland, and Spain have blamed Israel for the excessive use of force in Gaza and disregard of civilian lives.

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Azerbaijani Politics South Caucasus Region

Azerbaijan and Slovakia Expand Strategic Partnership

Publication: Eurasia Daily Monitor Volume: 21 Issue: 81

Executive Summary:

  • Azerbaijan and Slovakia recently signed an agreement on defense cooperation that opens the door to joint defense production, with Slovakia set to produce weaponry funded by Baku.
  • Slovakia’s expansion of its strategic partnership with Azerbaijan takes on a significant geopolitical dimension, potentially reshaping the dynamics of EU-NATO relationships and the balance of power in the region.
  • Russia’s full-scale invasion of Ukraine presented Azerbaijan with an opportunity to expand its energy trade with Europe and to build individual strategic partnerships with EU and non-EU members.

On May 7, Slovakian Prime Minister Robert Fico arrived in Azerbaijan for an official visit to meet with Azerbaijani President Ilham Aliyev. The visit marked a significant milestone in the Azerbaijani-Slovakian partnership, as the two leaders discussed new opportunities, such as transporting Azerbaijani gas to Slovakia, and upgraded bilateral ties to a strategic level (President.az; Azertag, May 7). In recent years, Azerbaijan has focused on building individual strategic partnerships with both EU and non-EU states in Europe, despite the strained relations between Baku and Brussels.

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Azerbaijani Politics Oil / Natural Gas / Green Energy

Azerbaijan’s new strategy is to become a green energy hub

COMMENT: Azerbaijan’s new strategy is to become a green energy hub

Two agreements signed at the end of May advanced Azerbaijan’s efforts to establish itself as a key energy provider in Southeast Europe, going beyond its role as a producer of hydrocarbons to enter the electricity markets in the region as well.

On May 29, Azerbaijan, Georgia, Romania and Hungary signed a memorandum to create a joint venture as part of the implementation of the Black Sea Energy Caspian-Black Sea-Europe Green Energy Corridor project. The first agreement regarding the submarine cable was signed in 2022 and it is supposed to be fully operational in 2029. The Black Sea submarine cable will be 1,195 km long and is set to be an important pillar of the transition to green energy, with the plan to integrate it into the EU’s internal electricity market. As an attempt to diversify energy supplies in response to Russia’s war in Ukraine in February 2022, the Black Sea cable is of particular importance.

Categories
Azerbaijani Politics Turkey-Azerbaijan Partnership

Azerbaijan invites business to help reconstruct Nagorno-Karabakh

Since its victory in the Second Karabakh War with Armenia in 2020, the Azerbaijani government has begun a massive reconstruction of the former war-torn region.

Azerbaijan has demonstrated a firm commitment to reconstructing Nagorno-Karabakh, which was largely neglected and left unattended for three decades. According to the Azerbaijani state media, between 2020 and 2023, the authorities have allocated AZN12 billion to Karabakh’s reconstruction/rebuilding process and an additional AZN4 billion AZN in 2024. Overall, the state program dubbed “Great Return” envisions the allocation of AZN30.5 billion from the state budget between 2022 and 2026.

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Azerbaijani Politics Iran in Caucasus and Beyond South Caucasus Region

How pragmatism drives Azerbaijan-Iran shift on regional transit

Iran’s President Ebrahim Raisi meets with his Azerbaijani counterpart Ilham Aliyev in Tashkent, Uzbekistan on Nov. 9, 2023. (Photo via Iranian presidency)

After rising confrontation and a war of words in recent years, Azerbaijan and Iran have returned to the diplomatic track—emphasizing regional connectivity and infrastructure projects based on pragmatism.

Having pursued coercive diplomacy to contain the rising influence of Israel and Turkey in Azerbaijan since 2020, Tehran has opted for reversive diplomacy towards Baku to de-escalate tensions. The shift is part of a broader Iranian strategy of seeking rapprochement with neighboring states, including Saudi Arabia.

Transit in focus

Regional infrastructure projects lie at the heart of the current pragmatism in the Azerbaijan-Iran relationship, putting political disputes on the back burner.

In Oct. 2023, Baku and Tehran laid the foundation for a new route connecting Azerbaijan to its Nakhchivan exclave through Iranian territory. The ceremony gathered Azerbaijani Deputy Prime Minister Shahin Mustafayev and Iran’s Minister of Roads and Urban Development Mehrdad Bazrpash. Per the initial agreement, a road bridge will be constructed between the two countries, followed by new motorway and railway connections. Although there is currently a functioning road connection between Azerbaijan and Nakhchivan via Iran, the new highway will significantly reduce travel time.