“GEGHARD”
SCIENTIFIC ANALYTICAL
FOUNDATION
2025
2025
2025-08-19
Recently, Russian airstrikes in Ukraine have destroyed oil refineries, a significant portion which either belongs to Western Europe or serves its economic interests. Azerbaijan is an important player in this context. It participates in bypass schemes to supply oil and petroleum products to Ukraine. Baku controls significant assets in Ukraine and, most importantly, supplies oil to Ukrainian refineries for processing. These strikes, which have inflicted considerable damage on Baku’s economic interests, further aggravate the already tense Russian-Azerbaijani relations. By openly supporting Kyiv, Baku seeks to strengthen its position in the West as a reliable partner.
At the end of July 2025, an agreement on the supply of Azerbaijani gas was signed between Ukraine’s state-owned company Naftogaz and SOCAR Energy Ukraine.[1] For the first time, a trial gas delivery was carried out via the Trans-Balkan route through the Bulgaria–Romania–Ukraine corridor. The signed agreement is of strategic importance for Ukraine, as due to the war the country’s gas reserves in 2025 have reached their lowest level in the past 11 years. Although earlier this year it became known that Kyiv has been preparing for the winter, financial difficulties have created serious obstacles to acquiring the necessary gas reserves.
This Azerbaijani-Ukrainian cooperation may also create an opportunity for the transit of Azerbaijani gas to Europe. It is noteworthy that the agreement was signed amid a sharp escalation in Russian-Azerbaijani relations and could contribute to European countries’ final renunciation of Russian gas supplies.
In January, the Ukrainian President Volodymyr Zelensky spoke about possible developments in the transit of Azerbaijani gas to Europe, and in February the country’s Foreign Ministry announced ongoing work in that direction. This was followed by the visit of Ukraine’s foreign minister Andriy Sybiha to Baku, where he held meetings with Azerbaijani President Ilham Aliyev, minister of economy Mikayil Jabbarov, and foreign minister Jeyhun Bayramov.
As expected, Moscow quickly reacted to the agreement signed between Azerbaijan and Ukraine. Konstantin Zatulin, first deputy chairman of the Russian State Duma Committee on CIS Affairs, stated that “Azerbaijan’s primary desire is to position itself as a state that, at the very least, does not behave as an ally of the Russian Federation and that in no way intends to limit its ties with Russia’s opponents and enemies.”
Baku is taking advantage of the situation surrounding Russia, seeking to strengthen its positions both domestically and internationally.
The euphoria of victory that emerged in Azerbaijani society after the 44-day war is gradually fading, while the Aliyev regime needs a new external “enemy” image to distract people from economic problems and to restrain internal discontent. In the realm of foreign policy, Azerbaijan’s economic interests with European countries necessitate the establishment of good-neighborly relations.
Recently, Russian strikes on oil refineries and terminals in Ukraine were framed by Baku as economic damage it had suffered. This refers to the destroyed Kremenchuk and Drohobych oil refineries in Ukraine, which had been operating on Azerbaijani crude. Before its destruction, the Kremenchuk refinery was producing about 500,000 tons of output annually. Back in 2017, Kyiv and Baku had reached agreements to supply 1.3 million tons of oil per year to Kremenchuk’s refineries. Moreover, the oil was delivered via the Odesa transshipment terminal, which is under the control of Azerbaijan’s state oil company (SOCAR).
Azerbaijan’s SOCAR has also actively invested in the operation of the Illichivsk oil loading terminal, which was likewise damaged by Russian strikes. According to experts, as a result of the destruction of the oil refineries, Baku has already lost millions of dollars, while further developments could deprive it of a stable market.
The energy sector is of vital importance to Azerbaijan, as the country’s economy is heavily dependent on oil and gas exports. According to the State Statistical Committee, in 2023 Azerbaijan’s total exports amounted to $33.898 billion, of which 91.5%, or $31.171 billion, consisted of exports of mineral fuels and mineral oils. In other words, any issue related to oil and gas—the country’s main source of revenue—can have serious consequences for Azerbaijan’s economy.
At the beginning of July, Ukraine’s president expressed his gratitude in a phone call to Ilham Aliyev for the support provided to Ukraine and its territorial integrity.
On July 10–11, Azerbaijan’s deputy foreign minister Yalchin Rafiev participated in the Ukraine Recovery Conference in Rome, assuring that Azerbaijan will continue to provide support to Ukraine. In addition, Azerbaijan, which is also assisting Ukraine in demining, announced its readiness to supply the necessary spare parts and to provide training for specialists.
On July 19, during a forum held in the occupied city of Shushi, Ilham Aliyev, drawing parallels between Ukraine and Nagorno-Karabakh, advised Kyiv to “never accept occupation.” Later, a video circulated online showing Ukrainian journalist Yelena Kurbanova presenting Aliyev with the emblem of the Ukrainian Armed Forces.
As a demonstration of “sincere support, friendship, and solidarity between the two peoples,” Azerbaijan has also hosted 300 Ukrainian children for restorative treatment and recreation.
It should be noted that the total value of humanitarian aid provided by Azerbaijan to Ukraine, including assistance for recovery and reconstruction, has already exceeded $44 million.
A few days ago, on August 11, Azerbaijan allocated $2 million in humanitarian aid to Ukraine. The first batch of electrical equipment has already been sent to Ukraine, and the second batch is scheduled to be delivered in the coming days.
In the light of the rapprochement between Ukraine and Azerbaijan, on August 6 Russia carried out drone strikes on gas infrastructure near the Ukrainian-Russian border, through which natural gas from Azerbaijan was supplied to Ukraine. According to local experts, restoring the station could take several months. Another attack by Russian forces occurred on August 8 at the SOCAR petroleum storage facility in Odesa, damaging the diesel fuel pipeline as well.
On the night of August 17, Geran-2 drones once again struck Azerbaijani SOCAR facilities in Odesa.
Thus, by demonstrating its willingness to support Ukraine, Baku is simultaneously expressing solidarity with Kyiv and sending a message to the West. This positioning becomes even more evident against the backdrop of worsening Russian-Azerbaijani relations, as Azerbaijan seeks not only to strengthen ties with the West but also to gain a strategic advantage over Moscow. Meanwhile, such moves by Azerbaijan are met with a strong response in Russia, both in terms of propaganda and practical measures.
[1] A subsidiary of Azerbaijan’s state oil company, SOCAR.