168: The path of expansion of economic cooperation between the European Union and Azerbaijan

On March 11, the military confrontation breaking out in the Middle East to the landscape, President of the European Council, Antonio Costa had visited Բաքու՝ what?heto attach With Aliyev։ As a result of negotiations fthe interlocutors reconfirm are committed to strengthening cooperation on a wide range of issues, from energy and communications to security and economic development.

According to the results of the meeting, Koshtan and Aliyev performed with a joint statement to the press, in which they emphasized the “strategic importance of the partnership between Azerbaijan and the EU” and expressed determination to deepen political dialogue and practical cooperation. Baku and Brussels intend to build on the “positive dynamics observed during recent high-level meetings” by expanding cooperation in areas such as security, energy and transport.

of the document according to which the partnership contributes to “peace, stability, establishment of ties and sustainable development in the Black Sea region, South Caucasus and Central Asia”. The parties will continue negotiations on a new comprehensive agreement, which is designed to form a modern legal basis for cooperation and to replace the current partnership agreement that regulates relations between the countries.

The leaders of the Council of Europe and Azerbaijan discussed regional security and the development of the peace process between Baku and Yerevan, welcoming the agreement reached at the summit in Washington on August 8, 2025. «historical impulse» in the process of regulating relations.  Costa reaffirmed that Brussels supports the ongoing bilateral dialogue aimed at achieving sustainable peace in the South Caucasus.

During the summary press conference, Aliyev noted the wide range of cooperation between the EU and Azerbaijan, emphasizing that the alliance is the main economic partner of the Caspian country. almost 50 percent of the merchandise turnover of Azerbaijan in January fell to European Union countries, moreover, in the coming years, this indicator will increase due to the expansion of economic projects and mutual investments.

Energy remains the central element of bilateral partnership. Gas exports from the fields of the Western Caspian Sea to the European market continue to grow. In January, supplies via the Trans-Adriatic pipeline reached Germany and Austria. so Azerbaijan supplies gas to 16 countries, including 12 European countries. Azerbaijan last year exported about 25 billion cubic meters of natural gas, receiving an income of about 8.8 billion dollars, thein which about 13 billion cubic meters went to the European Union. These figures confirm Azerbaijan’s reputation as a reliable energy partner at a time when Europe continues to reduce its dependence on Russian energy resources. The country’s geographical location and infrastructure allow it to serve as an energy bridge between the Caspian region and European markets.

Costa supported Aliyev’s words, calling energy security “the cornerstone of our bilateral cooperation”. He reminded: In 2022, the European Union began to diversify energy sources, and Azerbaijan played a key role in this effort thanks to the Southern Gas Corridor..  Partnership is even more important became as Europe seeks to reduce dependence on Russian energy carriers.

In Baku, attention was repeatedly drawn to the need to increase European investments for the maintenance and expansion of the country’s energy capacities: Speaking At the annual advisory meeting of the Southern Gas Corridor initiative, Aliyev noted that the existing pipeline network is already operating at full capacity, stressing the need to expand transportation infrastructure and build new pipelines to deliver additional volumes of gas to European markets.

Investments in Azerbaijan’s energy sector have traditionally been a point of contention between Baku and European politicians: Aliyev at the Davos conference at the beginning of the year had criticized In his opinion, Europe’s financial support to Azerbaijan’s energy sector is insufficient. “Europe is not particularly interested in investing in fossil fuel or renewable energy extraction in Azerbaijan,” when long-term guarantees of demand and capital investment are needed to justify new extraction and infrastructure expansion projects.

In the coming years, Azerbaijan is going to increase its production capacity. Several new projects are expected to increase production, including additional development phases for large offshore fields such as «Shahdeniz», and: «A:Mrsheron» expansion of gas field production. According to Baku’s forecasts, these projects will allow to increase production by 10-15 billion cubic meters of gas per year, at the peak of production at the end of the decade.

In addition, Azerbaijan is expanding the renewable energy sector by cooperating with international partners. By the early 2030s, Govt provides generate six to eight gigawatts of renewable electricity through investments in wind, solar and hydropower projects. Some of this electricity could eventually be exported to Europe in projects such as the Black Sea Submarine Cable, which aims to transmit renewable energy from the South Caucasus to South-Eastern Europe.

US and Israeli aggression against Iran has led to increased tension in global energy markets. Liquefied natural gas supplies from Qatar collapsed after Iran retaliated. During his visit to Baku, Costa diplomatically noted that the ongoing military tensions in the Middle East and the cessation of oil and gas supplies through the Strait of Hormuz indicate the need for a reliable energy partnership, the clear prospects of which are not clearly visible.

In addition to energy, aspects have been important as well as cooperation in the fields of regional communication and transport: Europe Connecting Central Asia and China «Middle corridor» Azerbaijan’s role in development has strengthened its position as a transit link: The European Union reaffirms its commitment to support connectivity initiatives under the Global Gateway program, including the development of the railway project in Nakhijevan and new economic cooperation mechanisms designed to promote trade and investment.

Costa’s visit to Baku showed the general interest in deepening ties with the European Union, which persists in its confrontational anti-Russian course. For Azerbaijan, the expansion of projects for the export of energy carriers and the creation of transport corridors provides an opportunity to strengthen its position in the dialogue with the West, but the real dynamics of gas production far from a winning relationship։

Either way, Baku expects the European Union to take practical steps, especially in terms of investments, to modernize energy and transport links, and move from declarations to concrete actions.

Alexander Grigoriev

vpoanalytics.com

Translation by Zhanna Avetisyan

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