A Comeback Amidst the Energy Crisis: How Azerbaijan Transformed from an “Alternative” to an 'Essential'

In recent years, Azerbaijan's role in safeguarding Europe's energy security has undergone a qualitative transformation. Initially viewed primarily as one of several alternative sources and routes for energy supply, Azerbaijan has now become a crucial, indeed indispensable, energy partner for Europe.

During the construction phase of the Southern Gas Corridor, Azerbaijan was chiefly regarded as a component of energy diversification – a means of reducing Europe's dependence on a limited number of suppliers and transport routes. Yet even then, Azerbaijan assumed broader responsibilities: it served not merely as a gas supplier but as the initiator and guarantor of sustainable, cross-regional energy infrastructure linking the Caspian region to Europe. The Southern Gas Corridor's realisation demonstrated Baku's capacity to fulfil large-scale, long-term commitments, ensuring supply stability even during periods of global turbulence.

Following February 2022, as Europe faced an unprecedented energy crisis, Azerbaijan's role underwent a qualitative leap. Against a backdrop of sharply reduced gas supplies and soaring prices, it was Azerbaijan that swiftly extended assistance to nations suddenly confronted with threats to their energy stability. Baku not only honoured all existing contracts but also signalled its readiness to increase supplies if necessary, reaffirming its reputation as a reliable and responsible partner.

In January 2026, Azerbaijani President Ilham Aliyev stated during an interview with a local television station that both the volume and geographical scope of the country's natural gas exports continue to expand.

"To date, we have supplied natural gas to 14 countries, with 11 receiving long-term, stable supplies. Some nations received our gas in 2024 but subsequently suspended purchases due to alternative sources. We operate on a demand-driven model: supply commences when demand arises and ceases when demand subsides. Overall, Azerbaijan supplies natural gas via pipelines to 14 countries, with plans to add two more European nations this year. This will bring the total number of supply destinations to 16, ranking Azerbaijan first globally among pipeline gas suppliers. No other nation can match Azerbaijan's portfolio of pipeline gas supply partners," the Head of State emphasised.

This data clearly reflects Azerbaijan's unique position in the global energy market and confirms its transition from an alternative supplier to a systemic participant. Moreover, the country possesses all necessary resources for further export expansion. The extraction of natural gas from the deepwater blocks of the Azeri-Chirag-Guneshli (ACG) oil field, the implementation of the Shah Deniz Compression project, and the development of the Babek and Absheron gas fields are all on the agenda.

The next phase of development for the giant Shah Deniz gas field centres on the $2.9 billion Shah Deniz Compression Project. Its core objectives are to enable gas extraction from low-pressure reservoirs, enhance the field's recoverability, and achieve maximum gas recovery rates. This project is projected to facilitate Azerbaijan's extraction and export of approximately 50 billion cubic metres of additional gas and nearly 25 million barrels of condensate.

The peak production capacity of the Abşeron field's Phase II development will reach 12.7 million cubic metres of natural gas per day (equivalent to 4.5 billion cubic metres annually), alongside 37,000 barrels of condensate daily. Commissioning of Phase II is scheduled for late 2028 to early 2029.

Preliminary estimates indicate that the highly promising Babek structural area may hold natural gas reserves of 400 billion cubic metres and condensate reserves of 80 million tonnes, significantly enhancing Azerbaijan's long-term export potential.

Concurrently, Azerbaijan is actively advancing its green energy sector, a move that optimises the domestic energy balance and frees up additional natural gas for export. The nation adopts a pragmatic and rational approach to energy transition, recognising that a complete abandonment of fossil fuels in the short term would pose serious risks to energy security. Both individual nations and the wider region recognise that investing in traditional energy sources alongside developing renewables is crucial for maintaining stability.

As President Aliyev has stated, numerous oil- and gas-rich nations, with Azerbaijan as a prime example, are making substantial investments in green energy.

‘Therefore, I believe European institutions have now recognised that this blind opposition to fossil fuels must cease, and pragmatism and rationality should prevail,’ the Head of State remarked.

Against this backdrop, it is particularly important to reassess the policy of ceasing funding for fossil fuel projects, which international financial institutions have actively promoted in recent years. Practice has demonstrated that without investment in natural gas infrastructure, neither stable energy supply nor a smooth transition to ‘clean’ energy can be guaranteed. Decision-making should not be made at the expense of energy security.

The Green Energy Corridors represent a crucial direction for Azerbaijan's future development, organically complementing existing natural gas infrastructure to form the foundation for “clean” energy exports. These corridors encompass routes such as Caspian Sea-Black Sea-Europe, Central Asia-Azerbaijan, Azerbaijan-Turkey-Europe, and Azerbaijan-Georgia-Turkey-Bulgaria. These projects will further strengthen Azerbaijan's role as a pivotal connecting point between regions and markets.

It is evident that Azerbaijan, initially viewed merely as an energy route and source of supply diversification, has now become an indispensable partner for Europe and the wider region. In the future, this role will be further consolidated and enriched through the synergistic development of reliable gas supplies, infrastructure construction, and the export of “clean” energy.