Purchases of Russian oil no longer help Azerbaijan maintain exports

In 2024, Azerbaijan continued to increase purchases of Russian oil, increasing them by almost a third. However, this did not help to keep the export of raw materials.

For 11 months of last year, Azerbaijan increased oil imports by 3.3% compared to January-November 2023 to 1.53 million tons. At the same time, the share of Russian raw materials has grown even more. Over the year, its supplies jumped by 30.7% to 1.53 million tons.

However, this still did not help Azerbaijan to support its own oil exports. Production of raw materials in the country is declining and in 2024 dropped by 1.1 million tons to 29.1 million tons, according to Energy Minister Parviz Shahbazov. At the same time, exports decreased slightly less — by 0.8 million tons, to 24.4 million tons.

Azerbaijan has been actively buying Russian oil since 2023, when Western countries began to provide discounts on it due to sanctions, and the producers themselves had to look for new markets due to the ban on supplies to the EU. Then oil purchases abroad increased more than fourfold and 65% of them were Russian.

Oil production is declining in Azerbaijan and the country needs to support exports. S&P Global Ratings estimated that in 2025, production in the country will continue to decline to 28.9 million tons. The Azerbaijani government predicted that in 2027 oil production will decrease to 26.9 million tons.

The volumes of Russian oil purchased in Azerbaijan account for 6% of exports. Nevertheless, it is profitable for Azerbaijan to buy Russian oil because of the price difference, Igor Yushkov, a leading analyst at the National Oil Research Foundation and an expert at the Financial University under the Government of Russia, told EADaily.

"They can import oil at a discount and consume it on the domestic market. This allows you to free up the volume of your raw materials for export. In addition, some of the Russian oil in refined form can be exported — even to the EU, as it is not prohibited. India went this way," the expert said.