Azerbaijan: New challenges of oil prices instability

Vugar Bairamov, Center for Economic and Social Development (Azerbaijan, Baku)

Subscribe for Newsletter

Download PDF

While the Qatar crisis put the economic stability of the country in danger as well. Though the Azerbaijani foreign policy gives some hope for the  better future

Domestic Policy: Nagorno-Karabakh conflict escalates

In the mid-June, the Armed Forces of Armenia and Azerbaijan had another clash, resulting in the death of several soldiers from both sides. Azerbaijan claimed one, while Armenia claimed three losses.

Both sides accused each other in provocations and escalation of the situation. During the clashes,  both countries used the high-caliber weapons and the artillery guns. The event yet again brought the conflict issue to the county’s agenda. The public consensus in Azerbaijan is in favor of the military measures.

The escalation happened a few days prior to the visit of the OSCE co-chairs to the region, signifying the lack of the results in the international peace building efforts. As it was highlighted by the Permanent Representative of Azerbaijan to the OSCE Galib Israfilov, for the last 23 years since the establishment of the OSCE Minsk Group there are no any significant and effective result of its work yet, and at the moment the group doesn’t even hold meetings and all the group’s work is carried out only by its co-chairs.

The tension at the conflict line is only likely to grow in the future.

Economy: Qatar crisis affects Azerbaijani economy

The Qatar crisis, related to the threats by the other Persian Gulf countries to cut ties with Doha for its alleged relations with the terrorist organizations and Iran, affected Azerbaijani economy as well.

The Qatar crisis caused a sudden change in the oil prices and may cause some additional problems for Azerbaijan

This crisis caused a sudden change in the oil prices. First the markets saw it as a threat to the oil transportation, that caused a rise in the energy prices. Following the sudden short rise, the oil prices felt by more than 1%, that is a significant fluctuation for the sector.

The debates on the Qatar crisis impact over the oil prices continue, but the situation demonstrated the current notion unstability. For Azerbaijan, which intends to revise its budget for 2017, this may cause some additional problems.

Foreign Policy. Azerbaijan-Poland relations deepen

On  26 June the President of Azerbaijan made an official visit  to Poland and had a one-to-one and extended meetings with the Polish president. Afterwards two presidents and the high-ranking officials signed documents expanding the economic, scientific, and political cooperation, as well as the “strategic partnership” between their countries. Also, during the press-conference, the Polish president stated the will to build “a direct railway line between Azerbaijan and Poland through Georgia and Ukraine”. The presidents also talked about the energy projects. Currently the Azerbaijani oil is delivered to the Polish market, and the Southern Gas Corridor project implementation will secure a delivery of the Azerbaijani gas to Europe. The

Following the visit, President Aliyev tweeted about the support of the Azerbaijan’s territorial integrity by Poland.

The results of the visit are evaluated in positive terms. In the light of EU-Azerbaijan re-approachment, Azerbaijan and Poland demonstrated a will to get closer and build more beneficial cooperation. In many cases, Azerbaijan in the Caucasus and Poland in the Eastern Europe are seen as the countries, that can mobilize their forces against the Russian expansion.