BAKU, Azerbaijan, July 19. Against the backdrop
of profound changes in Europe’s energy sector, logistics, and
industrial policy, relations between Azerbaijan and Germany are
gradually moving beyond the traditional “oil-for-technology” model.
On the one hand, Germany remains one of the largest European
consumers of Azerbaijani energy resources; on the other hand, it is
increasing its interest in Azerbaijan as a transit hub for the
Middle Corridor, a partner in “green” energy, and a key element of
the EU’s strategy in the South Caucasus. The combination of
economic indicators, energy contracts, transportation initiatives,
and political contacts points to a transition in bilateral
relations toward a more comprehensive and strategic phase.
Trade: Solid Foundation and a Course Toward
Diversification
In 2025, trade between Azerbaijan and Germany totaled
approximately 1.7 billion euros, and in the first six months of
2026, trade volume reached nearly $573 million. These figures
confirm the stability of economic ties, although the structure of
trade remains asymmetrical.
Oil continues to account for the bulk of German imports from
Azerbaijan. Germany ranks among the top ten buyers of Azerbaijani
oil: according to the latest data alone, 360,300 metric tons were
imported, worth approximately $210.9 million. In return, Azerbaijan
primarily purchases machinery, equipment, electronics, and
automobiles.
This distribution reflects the traditional model of relations
between a raw materials exporter and an industrialized economy.
However, the political leadership of both countries is already
openly discussing the need to change this model. President Ilham
Aliyev’s statement during German President Frank-Walter
Steinmeier’s visit in 2025 regarding the need to diversify trade,
particularly in the field of renewable energy, effectively sets a
new agenda for bilateral cooperation.
“We believe that we should take more active steps in the coming
years to diversify our trade, especially in the field of renewable
energy, where German companies have extensive experience, and
Azerbaijan has a very large program and ambitious plans,” said
President Ilham Aliyev during a joint press statement with German
President Frank-Walter Steinmeier on April 2, 2025, in Baku.
Meanwhile, the volume of foreign direct investment from Germany
to Azerbaijan in 2025 amounted to $26.3 million. Nevertheless, the
potential for investment cooperation is far from being fully
realized, and infrastructure, energy, and technology projects
remain the main drivers of growth.
Energy: From oil to a long-term gas
partnership
A key qualitative change was the start of direct deliveries of
Azerbaijani gas to Germany beginning in January 2026. Through Italy
and the Southern Gas Corridor system, Azerbaijan’s state-owned oil
company SOCAR has begun supplying German companies with Azerbaijani
gas, with the total volume of contracts amounting to approximately
2 bcm per year.
A distinctive feature of these agreements is that they are based
not only on the physical delivery of gas but also on a mechanism of
swap transactions with European importers, primarily Italian ones.
Since Italy receives about 90% of the Azerbaijani gas entering the
EU, German companies gain access to this resource through the
European gas infrastructure. This demonstrates Azerbaijan’s high
degree of integration into Europe’s energy system.
The long-term nature of the contracts — approximately ten years
— is particularly significant. Following the energy crises of
recent years, Germany has sought to reduce its dependence on a
limited number of suppliers and diversify its gas sources. For
Azerbaijan, this means transforming from a regional exporter into a
key component of European energy security.
The deepening of cooperation between SOCAR and the German
company Uniper is also significant. The Cooperation Program for
2025–2026, which was signed, indicates that this collaboration is
taking on an institutional character.
In a broader context, these developments are directly linked to
EU policy. Today, half of Azerbaijan’s natural gas exports go to EU
member states, and ten EU countries already receive Azerbaijani
gas. The Southern Gas Corridor is becoming not just an energy
project, but a tool for strengthening the strategic partnership
between Baku and Brussels.
“Green” Energy: A New Growth Driver
Alongside cooperation in the gas sector, a new area of activity
is taking shape: the export of “green” electricity. The support
provided by the German-Azerbaijani Chamber of Commerce (AHK
Azerbaijan) for the project to lay a high-voltage cable across the
Black Sea, along with Siemens Energy’s participation in
collaboration with the Green Corridor Alliance JV, demonstrates
that Germany is interested not only in hydrocarbons but also in
future supplies of renewable energy from Azerbaijan.
This is particularly important in light of European climate
policy. For Germany, participation in such projects means an
opportunity to diversify its sources of “green” electricity, while
for Azerbaijan, it represents a chance to turn its growing
potential in wind and solar power generation into an export
product.
The Middle Corridor: Economic and Geopolitical
Logic
If the energy sector provides Azerbaijan with strategic
importance for Europe today, the Middle Corridor could define its
role in Euro-Asian trade tomorrow.
Germany’s interest in this route is becoming increasingly
concrete. Rhenus Logistics, an international logistics group
headquartered in Germany, is developing its own software to manage
terminals and transshipment operations along the corridor,
signaling a shift from political declarations to practical
engagement by German businesses.
The announcement by European Commission President Ursula von der
Leyen regarding the allocation of up to 200 million euros in grants
under the Global Gateway initiative, with the potential to attract
up to 2 billion euros in investments, shows that the EU views the
transport connectivity of the South Caucasus as part of its
long-term strategy. Potential projects — such as the development of
the Port of Baku and rail connections through Nakhchivan — directly
reinforce Azerbaijan’s importance as a transit hub.
Frank-Walter Steinmeier’s comment that the Middle Corridor is of
interest to the German economy, given the limitations of existing
transport routes, is also significant. Essentially, this involves
seeking alternative routes to markets in Central Asia, China, and
Southwest Asia against the backdrop of global geo-economic
competition.
“Both of us are interested not only in Central Asia but also in
economic and trade relations with the Far East, South-West Asia,
and China. At the same time, we are well aware of how limited the
current transport routes are and how they operate within their
existing capabilities. In this regard, the Middle Corridor offers
an interesting prospect for the German economy. As the South
Caucasus continues to develop politically in a more stable manner,
this prospect will become even more attractive,” said German
President Frank-Walter Steinmeier during a joint press statement
with Azerbaijani President Ilham Aliyev on April 2, 2025, in
Baku.
Transport Diplomacy and the Institutionalization of
Cooperation
Azerbaijan’s chairmanship of the International Transport Forum
summit in Leipzig in May 2026 was a key element of this strategy.
By promoting the themes of “green” transportation, digital
logistics, and sustainability, Baku was able to position itself not
only as a transit hub but also as a key player in shaping new
transportation standards.
The signing of a memorandum of understanding on the mutual
recognition of seafarers’ certificates and discussions on expanding
cooperation in road and air transport demonstrate the gradual
institutionalization of transportation cooperation between
Azerbaijan and Germany.
Political Context: Azerbaijan as a key EU partner in the
South Caucasus
These economic developments have been accompanied by a
noticeable intensification of political contacts. Since the
beginning of the year, Baku has been visited by European Council
President António Costa, High Representative of the EU for Foreign
Affairs Kaja Kallas, Slovak President Peter Pellegrini, and
European Commission President Ursula von der Leyen.
President Ilham Aliyev’s statement regarding the unprecedented
momentum in relations with the European Commission reflects a
broader trend: the European Union is Azerbaijan’s main trading
partner. More than 40% of our trade is with the member states, and
for the European Union, Azerbaijan is the main trading partner in
the South Caucasus. Almost 70% of trade in the South Caucasus is
trade with Azerbaijan.
The region’s growing strategic importance, as noted by Ursula
von der Leyen, also strengthens Germany’s role as one of the key
European players in engagement with Baku.
The opening of the “House of Azerbaijan” in Stuttgart and the
Azerbaijani Sunday school has a broader significance than merely a
cultural initiative. The development of sustainable humanitarian
and social ties creates a long-term social foundation for economic
and political partnership.
Contemporary Azerbaijani-German relations are undergoing a phase
of qualitative transformation. Oil remains the most important
element of trade, but gas contracts, renewable energy projects,
transportation connectivity, and digital logistics are beginning to
play an increasingly prominent role.
For Germany, Azerbaijan is becoming at once a source of
diversified energy resources, a partner in Europe’s “green” agenda,
and a key link in the Middle Corridor. For Azerbaijan, Germany is
not only a market for its goods, but also a potential investor, a
technology partner, and a gateway to broader European
infrastructure projects.
The main conclusion is that cooperation between the two
countries is gradually shifting from a predominantly raw
materials-based model to a multi-level strategic partnership in
which energy, transportation, digital infrastructure, and “green”
technologies reinforce one another. It is precisely this
interconnectedness that is shaping the new architecture of
Azerbaijani-German relations within the European context.