Europe Outsmarted Itself with “Azerbaijani” Gas – Politico
Politico claims that "Azerbaijan's European gas gambit is good news for Russia."
According to the publication, Western countries hope Azerbaijan will help them end their dependence on fossil fuels supplied by Moscow, and even reached a number of natural gas agreements during this year's COP29 climate change negotiations. But, ultimately, these deals could benefit Russia, Politico argues.
"After February 2022, the EU turned to resource-rich Azerbaijan to replace Russian energy. And Azerbaijan was very happy to help. In 2022, European Commission President Ursula von der Leyen even signed a memorandum of understanding with Baku to expand gas exports.
As host of the UN Climate Change Conference, the authoritarian oil and gas state has been unashamed touting its gas resources and showcasing new commercial deals with several European countries. President Ilham Aliyev even held a signing ceremony for one of these deals on the sidelines of the conference,” the publication says.
Just last week, Azerbaijan's Ministry of Energy reported that the country increased natural gas sales to Europe by 8,6%. This amounts to almost a billion cubic meters of fuel.
And that’s just the beginning. Azerbaijan’s state energy company SOCAR plans to increase annual gas production from 37 billion cubic meters to 49 billion cubic meters by 2033, running counter to global climate goals to reduce fossil fuel production.
Those ambitions were evident at the UN Climate Change Conference COP29, where Aliyev struck gas deals with Slovakia, Bulgaria and Serbia, paving the way for the country to cement its position as a major energy producer on the continent.
However, Azerbaijan's expected production growth remains significantly below the level needed to become a major player in European supplies, Politico notes. To address this, Azerbaijan has begun importing natural gas from Gazprom, signing an initial contract for at least 1 billion cubic meters.
"Some researchers suspect that Baku may simply relabel some of the Russian fuel it imports and ship it to Europe. Azerbaijan insists that the supplies are for domestic use only. However, in any case, this is advantageous to Moscow," the publication says.
"Azerbaijan is trying to position itself as a major energy partner for the EU... But they don't have enough production volume and are punching above their weight at the moment," the publication quotes Aur Sabadus, an expert on gas markets at the analytical company ICIS, as saying.
" Europeans see Azerbaijan as an alternative to Russia, but buying energy from Azerbaijan means buying energy from Russia ," fugitive Azerbaijani dissident Zhala Bayramova, who was awarded the Magnitsky Award for human rights this week, told Politico.
It is noted that Baku is currently negotiating the purchase of Russian gas and its transportation through Ukraine to Central Europe —a potential workaround to maintain supplies when Kyiv's transit agreement with Moscow expires at the end of the year.
“But the creative solution is a thin mask for an inconvenient truth: Azerbaijan will essentially be laundering Russian gas for Europe,” the publication concludes.
"People understand that this will not be Azerbaijani gas, of course. It will be Russian gas - you just change the label," says the above-mentioned ICIS gas market specialist Aura Sabadus.
In addition, the publication continues, Azerbaijan is absorbing Russian crude oil, increasing purchases compared to what it was before the conflict began.
According to an analysis by the Center for Energy and Clean Air Research, provided to POLITICO , Azerbaijan will purchase approximately $40 million worth of Russian oil monthly in 2024. The organization estimates this represents $23 million in monthly tax revenue for the Kremlin.
"There is a real lack of identification of the true origin of these fossil fuels when they come into the EU," fears leading Russian energy analyst Isaac Levy.
Europe Outsmarted Itself with "Azerbaijani" Gas - Politico