Azerbaijan deepens ties with Germany beyond oil and gas
Azerbaijan’s relationship with Germany is shifting beyond energy, with the two countries deepening ties across industry and logistics as Europe works to diversify its supply chains away from Russia.
ADVERTISEMENT
ADVERTISEMENT
“Azerbaijan is gradually ceasing to be perceived by Germany solely as an energy supplier and is increasingly becoming part of a new Eurasian industrial and logistics architecture,” said Orkhan Yolchuyev, director of the CASPIA Analytical Center.
Bilateral trade between the two countries reached around €1.7 billion in 2025, driven by German exports of industrial equipment, machinery and transport systems, Yolchuyev said.
Over 250 German companies now operate in Azerbaijan, spanning manufacturing, construction, logistics and energy.
The shift has accelerated since Azerbaijan began supplying gas directly to Germany and Austria in early 2026, part of a wider European push to reduce dependence on Russian energy following Moscow’s full-scale invasion of Ukraine.
Beyond energy
The real change, Yolchuyev said, is not in the trade figures but in what they represent.
“[They] indicate that bilateral relations are evolving toward a higher level of industrial cooperation,” he said, pointing to Germany’s need for new export markets and more resilient supply networks.
German companies already active in Azerbaijan could soon be drawn into its reconstruction programmes and expanding industrial zones, particularly in engineering, transport, renewable energy and advanced manufacturing.
Much of this shift runs through the Middle Corridor, the transport route linking China and Central Asia with Europe via the Caspian Sea, Azerbaijan, Georgia and Turkey.
Russia’s war in Ukraine has given the route new urgency, as European firms hunt for alternatives that insulate their supply chains from disruption.
Azerbaijan sits at its logistical centre, with sea and rail links increasingly central to the transcontinental route.
Yolchuyev said the corridor’s value lies less in cargo volumes than in what it carries.
“The higher the share of high value-added products, such as automotive components, industrial machinery, electrical equipment, electronics or chemical products, the greater the economic efficiency of the route,” he said, pointing to the expansion of the Port of Baku and the Alat Free Economic Zone as drivers of new manufacturing and logistics investment.
Energy still at the core
Energy remains central despite the widening scope of cooperation. Azerbaijan has positioned itself as a dependable gas supplier and, since early 2026, has been sending gas directly to Germany and Austria.
Farid Shukurlu, a non-resident fellow at the Research Institute for European and American Studies, said Russia’s invasion marked a turning point.
“Traditionally, economic relations between Azerbaijan and Germany were concentrated in a limited number of sectors, including heavy machinery, automobiles and pharmaceuticals,” he said.
“However, Russia’s full-scale invasion of Ukraine fundamentally reshaped the bilateral economic relationship.”
Within five months of Azerbaijan’s first crude shipment to Germany, the country had exported 360,300 tonnes of crude oil and petroleum products worth approximately $210.9 million (€196mn), Shukurlu said.
He believes Azerbaijan could eventually become a transit route for Kazakh oil and Turkmen gas bound for Germany and other European markets.
Germany’s shift carries weight given its past reliance on Russian gas. Italy remains the largest European buyer of Azerbaijani gas via the Trans Adriatic Pipeline, but Germany is now moving in the same direction.
Manfred Scherer, mayor of the Verbandsgemeinde Sprendlingen-Gensingen, a collective municipality in Germany’s Mainz-Bingen district, recalled meeting Azerbaijan’s current energy minister, Parviz Shahbazov, during his time as ambassador to Germany.
“Economic relations between Germany and Azerbaijan have developed positively in recent years. There is strong potential to further strengthen cooperation,” Scherer said.
“I have fond memories of the visit of the current minister of energy, Parviz Shahbazov, to our municipality during his time as ambassador of Azerbaijan to Germany,” he continued.
“At that time, we discussed opportunities to deepen our relations through a municipal partnership and to strengthen cooperation between our regions.”
A wider European shift
Germany’s pivot fits a broader European turn toward the South Caucasus and Central Asia, partly in support of the Armenia-Azerbaijan peace process, which could unlock further energy diversification and regional connectivity.
The high-level visits have piled up. European Commission President Ursula von der Leyen said the partnership with Azerbaijan “matters greatly to the European Union” and had “real momentum”.
European Council President António Costa travelled to Baku for talks on deeper EU re-engagement, while EU foreign policy chief Kaja Kallas visited in May.
Italian Prime Minister Giorgia Meloni and Slovak President Peter Pellegrini have also held high-level talks with President Ilham Aliyev.
