Shorouk Express 
BAKU, Azerbaijan, June 18. It appears that oil
price uncertainty is a major channel through which the geopolitical
tension in the Middle East could affect Azerbaijan, Dmitry Dolgin,
Chief Economist, Russia and CIS at the Netherlands-based ING
banking group, told Trend.
“Based on our estimates, each $1 per barrel of oil price
translates to approximately $300 million in annual fuel export
receipts and around $190 million in annual fuel-related fiscal
revenues. Currently, the Brent crude oil price significantly
exceeds the $60-65 per barrel range, which is the breakeven range
for Azerbaijan’s current account and consolidated budget. However,
the sustainability of this price movement is in question, given
that oil prices were as low as $60 per barrel just over a month
ago,” he said.
Dolgin noted that in terms of geography, Azerbaijan’s trade
routes have limited direct exposure to the tensions surrounding
Iran.
“If the situation escalates further and tensions are prolonged,
it could negatively impact the investment sentiment towards the
broader region. Nonetheless, it is important to note that trade
flows have been more significant for Azerbaijan compared to foreign
capital inflows,” said the analyst.
Dolgin pointed out that while tensions in the Middle East are
certainly important to monitor, Azerbaijan’s investment case in the
long run are more strongly influenced by relationships with
Türkiye, Armenia, and the European Union.
Israel launched airstrikes on Iran in the early hours of June
13, killing a significant number of military personnel. Among the
dead were Iran’s Chief of the General Staff Mohammad Bagheri, IRGC
Commander-in-Chief Hossein Salami, Khatam al-Anbiya Central
Headquarters Commander Gholamali Rashid, and IRGC Aerospace Force
Commander Amir Ali Hajizadeh. Nine nuclear scientists and several
high-ranking officials were also reported killed.
That same evening, Iran responded with a large-scale attack,
firing more than 150 ballistic missiles and over 100 drones at Tel
Aviv and other locations. The strikes caused civilian casualties
and extensive damage.
