Germany and Azerbaijan are moving beyond a traditional energy-focused partnership, with bilateral trade reaching around €1.7 billion in 2025 and more than 250 German companies now active in the country. The shift reflects a broader European effort to diversify supply chains away from Russia, particularly since Moscow's full-scale invasion of Ukraine.
“Azerbaijan is gradually ceasing to be perceived by Germany solely as an energy supplier and is increasingly becoming part of a new Eurasian industrial and logistics architecture,” said Orkhan Yolchuyev, director of the CASPIA Analytical Center in Baku.
German exports to Azerbaijan now centre on industrial equipment, machinery, and transport systems, with companies operating in manufacturing, construction, logistics, and energy. The relationship deepened further in early 2026, when Azerbaijan began direct gas deliveries to Germany and Austria, part of a wider European push to reduce reliance on Russian energy.
Beyond energy: industrial cooperation takes centre stage
Yolchuyev emphasised that the real change is not in the trade figures themselves but in what they represent. “They indicate that bilateral relations are evolving toward a higher level of industrial cooperation,” he said, pointing to Germany’s need for new export markets and more resilient supply networks.
German firms already established in Azerbaijan could soon be drawn into the country’s reconstruction programmes and expanding industrial zones, particularly in engineering, transport, renewable energy, and advanced manufacturing. Much of this activity is tied to the Middle Corridor, the transport route linking China and Central Asia with Europe via the Caspian Sea, Azerbaijan, Georgia, and Turkey.
Russia’s war in Ukraine has given the Middle Corridor new urgency, as European companies seek alternatives that insulate their supply chains from disruption. Azerbaijan sits at the logistical centre of this route, with sea and rail links that are increasingly central to transcontinental trade.
Yolchuyev argued that the corridor’s value lies less in cargo volumes than in the nature of what it carries. “The higher the share of high value-added products, such as automotive components, industrial machinery, electrical equipment, electronics or chemical products, the greater the economic efficiency of the route,” he said. He pointed to the expansion of the Port of Baku and the Alat Free Economic Zone as drivers of new manufacturing and logistics investment.
Energy still at the core
Despite the widening scope of cooperation, energy remains central. Azerbaijan has positioned itself as a dependable gas supplier, and since early 2026 has been sending gas directly to Germany and Austria. Farid Shukurlu, a non-resident fellow at the Research Institute for European and American Studies, said Russia’s invasion marked a turning point.
“Traditionally, economic relations between Azerbaijan and Germany were concentrated in a limited number of sectors, including heavy machinery, automobiles and pharmaceuticals,” he said. “However, Russia’s full-scale invasion of Ukraine fundamentally reshaped the bilateral economic relationship.”
Within five months of Azerbaijan’s first crude shipment to Germany, the country had exported 360,300 tonnes of crude oil and petroleum products worth approximately $210.9 million (€196 million), Shukurlu noted. He believes Azerbaijan could eventually become a transit route for Kazakh oil and Turkmen gas bound for Germany and other European markets.
Germany’s shift carries particular weight given its past reliance on Russian gas. Italy remains the largest European buyer of Azerbaijani gas via the Trans Adriatic Pipeline, but Germany is now moving in the same direction.
Manfred Scherer, mayor of the Verbandsgemeinde Sprendlingen-Gensingen in the Mainz-Bingen district, recalled meeting Azerbaijan’s current energy minister, Parviz Shahbazov, during his time as ambassador to Germany. “Economic relations between Germany and Azerbaijan have developed positively in recent years. There is strong potential to further strengthen cooperation,” Scherer said. “I have fond memories of the visit of the current minister of energy, Parviz Shahbazov, to our municipality during his time as ambassador of Azerbaijan to Germany. At that time, we discussed opportunities to deepen our relations through a municipal partnership and to strengthen cooperation between our regions.”
A wider European shift
Germany’s pivot fits a broader European turn toward the South Caucasus and Central Asia, partly in support of the Armenia-Azerbaijan peace process, which could unlock further energy diversification and regional connectivity. High-level visits have piled up: European Commission President Ursula von der Leyen said the partnership with Azerbaijan “matters greatly to the European Union” and had “real momentum”. European Council President António Costa travelled to Baku for talks on deeper EU re-engagement, while EU foreign policy chief Kaja Kallas visited in May.
The evolving relationship also comes as Germany faces internal debates about economic resilience and talent retention. A recent survey found that over half of Germany’s top earners are considering leaving the country, a trend that could affect the availability of skilled workers for international partnerships. Meanwhile, the expansion of renewable energy across Europe, including record solar power generation in Germany, Spain, and Poland, aligns with Azerbaijan’s growing role in the Middle Corridor and its potential to supply clean energy to European markets.
