Russian oil makes profit for Azerbaijan

Purchases of Russian oil allow Azerbaijan to increase oil exports. There is a growing shortage of raw materials for domestic consumption in the country, according to a study by the Institute for the Study of World Markets.

"Azerbaijan relies heavily on Russian oil," reads the study "Limitations of Azerbaijan's Multi—vector Policy" conducted by the Institute for the Study of World Markets.

They cited data that oil exports from Azerbaijan in January —May 2025 amounted to 10.3 million tons, exceeding the figure of the same period in 2024 by 5%.

"However, the value of exports decreased to $ 5.64 billion, which is 9.8% less than last year's level. Oil and condensate production in Azerbaijan amounted to 6.9 million tons in the first quarter, a decrease of 5.5% compared to the same period of the previous year. At the same time, oil exports increased by 7.3%, exceeding 6 million tons. The production of petroleum products decreased by 7%, while their exports increased by more than 16%," analysts at the Institute for the Study of World Markets write.

In their opinion, such dynamics indicates a growing shortage of oil for domestic consumption, which is compensated by external supplies.

"In the first quarter of 2025, imports amounted to 419.5 thousand tons in the amount of $ 212.9 million, which in quantitative terms exceeds the January—March 2024 figure by 1.8 times, and in value by 1.6 times," the study says.

The Institute for the Study of World Markets noted that Russia provides 90% of oil imports to Azerbaijan. Deliveries increased 2.2 times and amounted to 377.7 thousand tons worth $ 190.3 million in the first quarter.

"Without Russian oil, the role of this commodity in the overall export structure of Azerbaijan will continue to decline. In the first five months of 2025, the share of oil in the country's exports decreased from 56% to 51%," the Institute for the Study of World Markets summed up.

Igor Yushkov, a leading analyst at the Federal National Economic Development Fund and an expert at the Financial University under the Government of Russia, notes that the import of Russian oil provides an opportunity to generate additional income for Azerbaijan.

"Why are they buying it? Not because there is not enough, but because they get it cheaper, and sell their own more expensive. There is also a discount on Russian oil, and the fact that their refineries can process more sulfurous, heavier Russian oil without compromising the quality of the resulting oil products," the expert says.

In this case, we are not talking about a deficit, but about the level of profit.

"Low-sulfur light Azerbaijani oil is more expensive, it goes to the world market. Thus, they optimize their export-import operations and get more money. There will be no such operations, yes, they will earn less, but this will not create a deficit in the domestic market," says Igor Yushkov.