18th Mar 2018

Azerbaijan diverts EU oil to Russia and Iran

Azerbaijan is sticking to plans to reduce oil exports to the EU and increase shipments to Russia and Iran, as the South Caucasus country - home to another Russia-influenced frozen conflict in Nagorno-Karabakh - seeks to spread risk.

In the immediate aftermath of the Georgian crisis Azerbaijan decided as a temporary move to reduce shipments through Europe's only direct import route from the energy-rich Caspian Sea – the Baku-Tbilisi-Ceyhan (BTC) pipeline - and to increase exports to Russia.

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  • President Aliyev (r) is hedging his bets between the EU and Russia (Photo: Ilham-Aliyev)

But Elhar Nasirov, vice-president of Socar, the Azeri state oil company, told the Financial Times on Thursday (25 September) that Azerbaijan would continue exporting oil to Russia and Iran even though shipments through Georgia had resumed, because of the increased risks in the Caucasus.

"We don't want to insult anyone ... but it's not good to have all your eggs in one basket, especially when the basket is very fragile," he said. Separately, Elmar Mammedyarov, the foreign minister, told the FT: "We are trying to be friends with everybody, at the same time as acting in accordance with our national interests."

Unlike Russia-critical Ukraine, Azerbaijan has remained silent over Russia's invasion of Georgia despite disruptions caused to its oil business.

With presidential elections coming up on 15 October, Azerbaijan's head of state, Ilham Aliev, is trying to strike a balance between a re-assertive Russia and the West, especially since his country also has a frozen conflict on its own territory.

The majority-Armenian populated region of Nagorno-Karabakh split from Azerbaijan in a civil war in 1991 and remains under Armenian occupation, with Russia and Armenia enjoying close ties.

More than 20 Azerbaijani and Armenian soldiers have been killed in Nagorno-Karabakh since July, an Azerbaijan government official said Thursday in claims denied by the Armenian side.

An alleged Armenian-Russian link during the Georgian conflict was highlighted by the chairperson of the European Parliament's foreign affairs committee, Jacek Saryusz-Wolski, who asked EU's foreign policy chief Javier Solana in a public hearing on 10 September if Russian bases in Armenia were used to launch missiles at Georgia during the conflict.

Mr Solana said he could not confirm the information.

After talks held with Russian President Dmitri Medvedev in Moscow last week, Azerbaijani President Mr Aliev said his country sought "predictability" in the Caucasus, while his foreign minister said Azerbaijan's main task was to preserve its independence and sovereignty.

During a visit in Baku last week, the United States' chief mediator in the region, Matthew Bryza, said it was more important than ever to resolve the dispute after the Russia-Georgia war.

"The recent events in Georgia underscore the importance of a timely resolution of the Nagorno-Karabakh conflict," he said, adding that the US strongly support the sovereignty and territorial integrity of Azerbaijan.

Armenia-Turkey initiative

Meanwhile, in New York, a trilateral meeting between the foreign ministers of Turkey, Armenia and Azerbaijan was due to take place on Thursday (25 September), with Turkey recently opening a new chapter in Armenian diplomacy.

Turkish President Abdullah Gul made a historic visit to Armenia on 6 September to watch a football match between the two nations which have had a closed border and no diplomatic ties since 1993, when Turkey backed Azerbaijan over the Nagorno-Karabakh conflict.

Armenian media hope that Turkey's increasing distance from the US and closer ties to Russia could work in its favour over the frozen conflict, and could end-up rerouting future Caspian-EU energy links through its territory instead of Georgia.

"Turkey's pressure on Azerbaijan is also an option. The reason lies in the Baku-Tbilisi-Ceyhan (BTC) pipeline, which became insecure after the Georgian war. Actually the BTC proved that no long-term political project can be profitable if it is realised on the pretensions of politicians and their unquenchable ambition to isolate the neighbouring country, which in this particular case is Armenia," analyst Karine Ter-Sahakian wrote for Pan-Armenian Network.

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