By Ilham Shaban, Head of the Oil Research Centre.
“Cooperation between Germany and Azerbaijan in the energy sector will extend across a broad range of areas,” President of Azerbaijan Ilham Aliyev stated during a joint press conference with German Chancellor Friedrich Merz.
For his part, Chancellor Merz referred to Azerbaijan’s expanding natural gas resources and expressed hope that the southern regions of Germany would increasingly be supplied with Azerbaijani gas.
It is worth noting that, since 2026, SEFE, a company owned by the German government, has been importing 1.5 billion cubic metres (bcm) of natural gas annually from Azerbaijan under a ten-year contract. In addition, Germany’s Uniper purchases natural gas from the Shah Deniz field through Italy and has announced its intention to increase these volumes to 1.5 bcm per year under new agreements.
On 21 July, the Republic of Azerbaijan and the Federal Republic of Germany signed a Joint Declaration on the Strategic Agenda for Bilateral Partnership in Berlin. During the same event, the two sides also signed a Joint Declaration on the Establishment and Operation of the Azerbaijan–Germany Business Council.
President Aliyev stated that the agreements envisage concrete action plans in a number of areas. Several working groups will be established to implement these initiatives, as reflected in the documents signed that day.
To date, Germany’s cumulative direct investment in Azerbaijan has reached US$937.5 million. Of this amount, US$53.4 million has been invested in the oil and gas sector, while US$884.1 million has been directed to other sectors of the economy. Azerbaijan, in turn, has invested US$667.5 million in the German economy.
During the first half of 2026, bilateral trade between Azerbaijan and Germany totalled US$573 million. Azerbaijan’s exports amounted to US$234.77 million, while Germany’s exports to Azerbaijan reached US$338.11 million.
In 2025, total trade turnover between the two countries amounted to US$1.376 billion.
Germany currently imports crude oil and natural gas from Azerbaijan.
