Germany seeks more Azerbaijani gas and oil as Merz and Aliyev sign strategic pact, while Baku backchannel surfaces

Energy partnership deepened

Chancellor Friedrich Merz and Azerbaijani President Ilham Aliyev met at the Chancellery in Berlin on Tuesday and signed a Joint Declaration on the Strategic Agenda of the Bilateral Partnership, along with an agreement to establish a German-Azerbaijani Economic Council. Merz described Azerbaijan as one of the few countries in the region with an energy surplus, calling it an interesting partner for securing Germany's long-term energy supply. The two leaders discussed expanding gas and oil imports, with Merz stressing that diversification should eventually include hydrogen.

Azerbaijan is one of the few countries in the region that produces more energy than it consumes. In that respect, Azerbaijan is an interesting partner for us when it comes to securing Germany's energy supply.

Gas and oil: the numbers

Azerbaijan has been delivering gas to Germany since the start of 2026 under a ten-year contract for 1.5 billion cubic metres per year. That volume equals roughly 15 terawatt-hours, less than 2% of Germany's total gas consumption of 845 TWh last year. Aliyev said his country exported about 25 billion cubic metres of gas in 2025, around half of it to EU member states, and that Germany is now among the buyers. On oil, he stated that Azerbaijan can supply whatever volumes Germany needs, either from its own production or through the trading arm of state energy company SOCAR.

Infrastructure and investment hurdles

Aliyev made clear that any significant increase in deliveries requires new long-term requests beyond the existing contract, expanded pipeline infrastructure, and fresh investment. He urged the EU and European banks to provide financing, noting that lenders are currently reluctant because they prefer to fund green projects. The EU had already agreed with Azerbaijan in 2022 to raise imports from 8.1 billion cubic metres per year to 20 billion within a few years, with an interim target of 12 billion in 2023. That target was missed; in 2025 the EU received 11.3 billion cubic metres, about 4% of its total gas imports.

We can increase this volume, but several conditions must be met. First, a corresponding request must be made to us. Second, the existing gas infrastructure must be expanded. And of course the question of investment must be solved, because European banks currently do not want to finance such projects.

Peace dividend in the South Caucasus

Merz congratulated Aliyev on the peace treaty that Azerbaijan and Armenia signed in 2025 in the presence of US President Donald Trump. The Chancellor said the historic agreement opens the chance to overcome a decades-long conflict and that greater regional stability would enable stronger economic cooperation. The prospect of a more stable South Caucasus feeds directly into Germany's energy calculus, as secure transit routes become more viable.

The Baku Connection surfaces

Aliyev indirectly confirmed a secret meeting in Baku that has been the subject of media reports for days. According to border-control information cited by the Azerbaijani president, former Brandenburg Minister-President Matthias Platzeck (SPD) and former Chancellery Chief Ronald Pofalla (CDU) flew from Berlin to Baku on 12 July. In the following days, former Russian Prime Minister Viktor Zubkov and Russian Human Rights Commissioner Valery Fadeyev, both described as confidants of Vladimir Putin, arrived in the Azerbaijani capital. Merz told journalists he knew nothing of such a meeting. Aliyev said he had received no information from either Germany or Russia, but added that if the gathering helps end the war between Russia and Ukraine, it can only be welcomed. The so-called Baku Connection has reportedly been meeting regularly since 2024.

If this meeting should contribute to ending the war between Russia and Ukraine, we can only welcome it.