Azerbaijan and Armenia plunge back into war, complicating EU hunt for energy Analysis by Politico

Politico has published an article about the possible reasons and consequences of the recent flare-up on the Azerbaijani-Armenian border, saying that the EU needs more energy, and it’s looking to Azerbaijan. Caliber.Az reprints the article.

Armenia and Azerbaijan’s decades-old conflict turned bloody Tuesday, but the EU’s ability to mediate is hampered by the perception that it can’t be even-handed because of its growing energy alliance with oil- and gas-rich Azerbaijan.

Those worries were realized Tuesday, when Azerbaijani forces unleashed a colossal artillery barrage deep into Armenian territory, prompting retaliatory attacks.

The Armenian foreign ministry said that a number of cities including Vardenis, Sotk and Goris were targeted, while footage posted online showed smoke rising from residential areas. Around 49 Armenian soldiers and 50 Azeri troops were killed in the border clashes, both sides said.

The attacks are being blamed both on the boost in confidence Baku is receiving from its closer ties with the EU, as well as Russia's growing inability to police its former sphere of influence thanks to its disastrous war in Ukraine.

“The reaction of the EU, as well as other global players, to this crisis is very important,” said Gegham Stepanyan, human rights ombudsman for the Republic of Artsakh, the ethnic Armenian enclave of Nagorno-Karabakh. Stepanyan said the West’s growing reliance is creating a “double standard” compared to its efforts to cut off the fossil fuel revenues Russia has used to fund its invasion of Ukraine. 

“Unfortunately, when it comes to aggression from Azerbaijan, we see international actors refrain from making targeted statements and applying sanctions,” Stepanyan said.

Russia is a traditional ally of Armenia and its troops are supposed to guarantee a tenuous ceasefire between Armenia and Azerbaijan after a lightning war in 2020 that saw Azerbaijan retake much of the disputed territory of Nagorno-Karabakh.

Armenia applied to Moscow to intervene, citing a mutual defence pact. Russian presidential aide Yury Ushakov said Moscow is "extremely concerned" over the fighting but Russia isn't activating its troops.

Azerbaijan blames Armenia.

“Armenia has been violating the commitments of the ceasefire — stationing personnel on our territory, planting landmines and posing problems for opening all economic and transport links,” said Leyla Abdullayeva, a spokesperson for Azerbaijan’s Foreign Ministry. “We are not interested in tensions in the region — we are interested in peace and normalization, and the Armenian side has not been reciprocating.”

Brussels is calling on both sides to back down.

"We urge immediate cessation of hostilities and return to the negotiation table," said EU foreign policy chief Josep Borrell.

But it's easy to see why Yerevan is worried that the EU's close relationship with Baku could be a problem.

Energy ties

In May, Brussels unveiled the REPowerEU strategy, committing member countries to divest completely from Russian hydrocarbons within the next eight years and firing the starting pistol on a race to secure alternatives.

In addition to stepping up its gas exports, Baku has also signed a number of solar and hydrogen energy projects to help it meet the EU’s growing demand for clean power.

“Renewables are critical for our economy to ensure the inflow of ‘green’ investments for future generations,” said Orkhan Zeynalov, head of international cooperation at Azerbaijan’s Energy Ministry. 

In August, his colleagues signed a multi-million dollar contract with the United Arab Emirates firm Masdar to build a 230-megawatt solar plant near Baku, just weeks after appointing the same company to help build a 2-gigawatt offshore wind-to-hydrogen gas plant. The EU has plans to import some 10 million tons of hydrogen by 2030, and according to Zeynalov, the string of development deals is just the start.

“It’s a challenging road, but Azerbaijan’s background as a traditional energy producer is extremely useful,” he said.

Armenia has much less to offer. It imports all of its gas and is hemmed in by a hostile Turkey making it difficult to access world markets.

Azerbaijan's main oil and gas export pipelines run through Georgia to Turkey and the Mediterranean, but now it's using its newfound power to try to browbeat Armenia into opening more trade routes.

Baku is demanding that Armenia allow a trade to flow between mainland Azerbaijan and its western enclave of Nakhchivan, lying along the border with Turkey and separated from the rest of Azerbaijan by Armenia. 

On July 18, European Commission President Ursula von der Leyen touched down in Baku to sign a deal that will see Azerbaijan provide the EU with an annual 20 billion cubic meters of natural gas by 2027.