Azerbaijan and Serbia relations gain new impetus Baku’s pivot to the Balkans

On November 23, Azerbaijani President Ilham Aliyev paid an official visit to Belgrade upon the invitation of his Serbian counterpart, President Alexander Vucic. The visit came amid Azerbaijan's pivot to the Balkans, given President Aliyev's recent visits to Albania and Bulgaria and vis-à-vis meeting with the president of Macedonia. Azerbaijan's rapprochement with the Balkan states can be explained mainly by the growing global energy crisis triggered by Russia's military intervention in Ukraine.

While European countries faced severe energy shortages, the search for additional reliable energy partners became vitally important. In this vein, Azerbaijan emerged as another safe and economically stable energy-rich country that is keen to increase its natural gas export volume to Europe. Since 2022, Azerbaijan has held several high-level meetings with EU officials regarding exporting additional gas volumes to Europe. It is noteworthy that non-EU countries like Serbia, Albania, and Macedonia are keen on deepening energy partnerships with Azerbaijan.

President Aliyev’s recent visit to Belgrade is crucial for Serbia to join the Southern Gas Corridor network and diversify energy imports, decreasing the Russian energy monopoly. As for Azerbaijan, deeper engagement with non-EU states and energy partnerships is a good way to avoid falling under the total influence of the EU and avoid certain internal regulations, such as the Third Energy Package.

Although the bilateral relations envisage a large spectrum of fields, the priority is given to energy partnership given Serbia's vulnerable position in the region and poor energy sources. Reportedly, the natural gas flow to Serbia will start in 2023, as it requires the shift of necessary infrastructure of both countries. The import of additional gas volumes from Azerbaijan could help Serbia to avoid severe energy shortages amid Russia’s declining energy role due to the Western-imposed sanctions.

Reportedly, Serbia plans to buy up to 40 per cent of the necessary gas from Azerbaijan in 2023 via the EU-supported Serbia-Bulgaria gas interconnector – a 171 km natural gas interconnector that will connect Nis (Serbia) and Sofia (Bulgaria) and become fully operational in 2023.

However, this time Serbia is not only interested in increasing additional volumes of natural gas from Azerbaijan but also electricity. Serbia has long been suffering from the lack of modern electricity power infrastructure caused mainly by poor management of local private companies. After brief negotiations in August 2022, Azerbaijan approved an interstate agreement with Serbia to purchase electricity from Azerbaijan on favourable terms. Also, according to Serbian media, Azerbaijani companies have been developing green technologies in Serbia in order to produce green energy and sell it on the EU market.

During Aliyev’s visit to Belgrade, a few more documents were signed between various governmental bodies, namely "Joint Statement between the President of the Republic of Azerbaijan and the President of the Republic of Serbia," "The Memorandum on the Establishment of the Strategic Partnership Council between the Republic of Azerbaijan and the Republic of Serbia.” These documents are aimed at enhancing the cooperation between various governmental institutions, including the Ministry of Internal Affairs, the Ministry of Digital Transformation, the Ministry of Economy, and others.

Serbia and Azerbaijan have long been enjoying cordial relations upgraded to a strategic partnership during the Vucic administration, though there was a short crisis period between the two in 2020. In August 2020, deadly tensions between Azerbaijan and Armenia occurred in the northern border region of Tovuz/Tavush and caused a death toll on both sides. Eventually, amid skirmishes, the Azerbaijani side accused Serbia of providing ammunition to Armenia. The discovery not only shook the strategic partnership between Serbia and Azerbaijan; the biggest danger for Serbia was upsetting both great and regional powers with interests in the Caucasus.

In July, the discovery of Serbian ammunition among Armenian forces put Belgrade's ties with Baku in serious trouble. The Azerbaijani Foreign Ministry summoned Serbia’s chargé d’affaires in Baku for a grilling. This episode was bad news for Serbia; Azerbaijan is one of the six countries with which Serbia has a strategic partnership agreement, alongside Russia, China, the UAE, France, and Italy.

However, the situation was quickly resolved through intensive diplomatic traffic. The rekindling of the bilateral relations enabled Belgrade and Baku to enhance their partnership, particularly at a time of uncertainty. As a result, both states increased trade turnover in the following year. As such, trade turnover amounted to $4.2 million during the first four months of 2021, while the total turnover between Azerbaijan and Serbia in 2020 amounted to $9 million.

With the deepening energy crisis and economic recession, Azerbaijan’s pivot to the Balkan region is likely to grow. President Vucic's statement that "Azerbaijan and Ilham Aliyev are reliable partners, and we believe in him" explains the level of trust and confidence in Serbia regarding Azerbaijan's role in ensuring the country's energy security. Moreover, the current problematic situation with energy supplies in Europe enables Azerbaijan to strengthen its position and boost its image as a safe and reliable energy partner, which gives it additional leverage to neutralize anti-Azerbaijani sentiments in the West and pursue fruitful cooperation with regional states.