Baku and Brussels post-election: closing “corridors”?
WHAT’S HAPPENING?
On February 7, 2024, Azerbaijani President Ilham Aliyev won a snap election to his fifth consecutive term. Six days prior, the state operators of Bulgaria, Greece, Romania, Moldova and Ukraine began the process of implementing a January MOU to establish a new “Vertical Corridor” route for gas from LNG ports and Azerbaijan via Greece and Turkey.
KEY INSIGHTS
– Capacity and demand constraints will likely hinder delivery of Azerbaijani gas to Europe through the Vertical Corridor
– Amid human rights, electoral violations and failed Western-led mediation efforts, an ongoing rift with Europe is likely to widen in Aliyev’s new term
– Narrowing avenues of EU-Azerbaijan cooperation will erode incentives for mitigating repressive internal and aggressive external policy in Azerbaijan
CONFLICTS AND PROMISES
Aliyev stated that Azerbaijan’s takeover of Nagorno-Karabakh—the subject of a decades long territorial dispute and conflict with Armenia as well as two wars—in a large-scale offensive late last year was one of the government’s motivations for holding elections before 2025, when they were officially scheduled to take place. The runup to the election was characterized by a mass crackdown on media and activists, justified by authorities as a hunt for “US spies” and “traitors,” and the OSCE concluded there were omissions, errors, transparency issues and no meaningful challengers to Aliyev in the snap election. Less than a week after the election, Armenia and Azerbaijan accused one another of wounding an Azerbaijani serviceman and causing four Armenian casualties, respectively.
In January, the Parliamentary Assembly of the Council of Europe declined to ratify the credentials of the Azerbaijani delegation, citing concerns about human rights, separation of powers and unfair elections. The assembly also raised the humanitarian impact of Azerbaijan’s months-long blockade of the Lachin Corridor connecting Armenia to Nagorno-Karabakh and the recent large-scale offensive there.
On Feb. 2, Aliyev threatened to withdraw from the Council of Europe and other European institutions. Azerbaijan had previously pledged to double its exports to Europe by 2027, a commitment given more weight in the context of Russia’s full-scale invasion of Ukraine.
THE CAPACITY CONUNDRUM
The goal of doubling exports to Europe to 20 billion cubic meters (bcm) is hindered by a variety of factors.
On the supply side, BP has expanded its gas drilling efforts in the last year and their 2023 annual gas production from the Shah Deniz and Azeri-Chirag-Deepwater Gunashli fields was nearly 30 bcm, and the total production in Azerbaijan from January-November 2023 was 44 bcm. Yet, existing pipelines connecting Azeri gas to Europe are not yet capable of exporting their full capacity of 20 bcm of gas, and would have to undergo costly expansion via compressor installations throughout. It remains unclear whether the parties to the Vertical Corridor or other European actors would invest in this expansion.
On the demand side, Aliyev stated in December 2023 that exports to Europe would reach nearly 12 bcm in that year, and Bulgaria is set to import 1 bcm in 2024. Nevertheless, Europe opened six new liquified natural gas (LNG) terminals from the beginning of 2022 through November 2023, and Europe’s LNG imports from major producers such as the United States grew 60% year-on-year in 2022, with that year’s record surpassed in 2023. Despite concerns about the United States’ recent indefinite ban on LNG exports, the US Department of Energy insists it will not affect existing exports to allies and that exceptions could be made in the interest of national security. Meanwhile, LNG import capacity by 2023 is expected to exceed gas consumption as early as 2030 amid gas reduction policies in Europe. In this context, it is highly likely that the lack of demand for Azerbaijani gas in Europe will hinder the expansion of transit pipelines necessary for it to reach prospective Vertical Corridor customers.
WINDOW TO EUROPE: CLOSING DOORS
As relations between Europe and Azerbaijan have waxed and waned, France retained its role as co-chair of the OSCE’s Minsk Group aimed at finding a peaceful resolution to the Nagorno-Karabakh conflict over the course of nearly three decades. However, the ceasefire ending the 2020 war was ultimately brokered by Russia, following previous unsuccessful mediation efforts by France and the United States. The most recent full-scale offensive also occurred despite ongoing peace talks hosted by Brussels. After his recent reelection, Aliyev dismissed the need for further international mediation, and the statement released by his Ministry of Foreign Affairs following the February 12 wounding of an Azerbaijani serviceman cast doubt on the purposes of the European Union Mission in Armenia. This traditional vehicle for diplomatic relations between Azerbaijan and Europe is unlikely to meaningfully reopen in the near to medium term.
Energy has long been another area where the West has been willing to cooperate with Azerbaijan despite diplomatic tensions. Energy talks with entities like the European Commission have often happened concurrently with a push for peace with Armenia from the European External Action Service. This area of cooperation has been brought to the forefront as concerns about the implications of Europe’s reliance on Russian gas have been exacerbated by the war in Ukraine that began in 2014.
Indeed, EU enlargement czar Olivier Várhelyi met with the Azeri foreign affairs minister to discuss strategic transport and energy projects as recently as September 2023. Some members of the European Parliament (MEPs) urged sanctions on Azerbaijan later that month, including a halt to gas imports, in the aftermath of the full-scale offensive in which Nagorno-Karabakh was taken. These MEPs expressed concerns that gas payments to Azerbaijan contributed to funding aggression, and that some gas could be coming from Russia. However, a spokesperson for the European Commission dismissed this latter concern as unsupported by the volumes of gas imported, and stated that sanctions could only be levied by EU member states themselves.
Even if Russian gas does not reach Europe, increased exports may require a repeat of Azerbaijan’s 2022 deal to import Russian gas to compensate for domestic demand and undercut hopes for creating economic costs for Russian aggression in Ukraine. Given historical precedent and the pressing geopolitical imperative to mitigate Russian levers of influence, though, it is unlikely that worsening relations in other spheres alone would substantially affect Europe’s energy cooperation with Azerbaijan in the short to medium term.
Decreasing demand from Europe over time will accomplish what policy may not in this respect. In the context of deteriorating relations in the human rights, governance and diplomatic spheres, this trend indicates that ties between Europe and Azerbaijan will only worsen in this next chapter of Aliyev’s presidency with little to no chance of rapprochement or energy promises fulfilled. This widening rift will mean little incentive for Azerbaijan to curb its crackdown on civil society as it has in the past under international pressure, nor to abstain from further military action in regard to Armenia.
Any views and opinions expressed in this article are those of the author and do not necessarily reflect the position of Internews.
