Baku and Washington: a new perspective on business cooperation Diversifying beyond oil

Azerbaijani President Ilham Aliyev’s working visit to Washington in August marked a key step in strengthening Azerbaijan–U.S. business relations. Since then, several initiatives have been launched to expand cooperation in energy, finance, IT, and broader trade and business partnerships.

Recently, the first meeting of the Strategic Working Group was held online to develop a Charter of Strategic Partnership between Azerbaijan and the United States. Ahead of this, a videoconference took place between Azerbaijan’s Minister of Economy, Mikayil Jabbarov, and Caleb Orr,  Assistant Secretary of State for Economic, Energy, and Business Affairs, during which the parties discussed energy projects in the Caspian region and the South Caucasus..

Even back in the distant 1990s, the energy sector became the foundation on which the bulk of Azerbaijan–U.S. business cooperation was later built. Following the signing of the “Contract of the Century,” American oil companies accounted for roughly 47% of all foreign investments attracted to domestic oil production. However, over time, these proportions shifted, with Azerbaijan’s oil and gas sector drawing investors from other regions of the world, and some American companies significantly reducing their stake in the contracts. Nevertheless, U.S. interest in Azerbaijan’s energy sector—and in the Caspian region as a whole—has never waned.

“During the videoconference with Caleb Orr, Assistant Secretary of State for Economic, Energy, and Business Affairs of the United States of America, we discussed key aspects of the Azerbaijan–U.S. economic partnership and underscored the strategic importance of cooperation in the energy and business sectors,” wrote Minister of Economy M. Jabbarov on his social media page yesterday. “We exchanged views on energy projects implemented in the South Caucasus and the Caspian region, gas transportation initiatives, and opportunities to further diversify joint activities in this field.”

The signing of historic documents in August this year is contributing to the expansion and diversification of Azerbaijan–U.S. ties in the energy sector. In particular, during the visit, a memorandum of cooperation was signed between the State Oil Company of Azerbaijan (SOCAR) and U.S. ExxonMobil (involved in the development of the Azeri-Chirag-Gunashli block), aimed at the American company’s participation in the development of a major hydrocarbon field in our country.

 At the same time, prospects for Azerbaijan’s partnership with ExxonMobil in exploring the potential of renewable energy sources (RES) are being discussed. The U.S. partner is also of interest in areas such as technology transfer for reducing methane emissions, optimising operating costs, and implementing modern technologies to increase oil and gas production. The U.S. government has also expressed support for Azerbaijan’s efforts to strengthen the Southern Gas Corridor (SGC), including the potential integration of suppliers from the Central Asian region.

Energy continues to remain the backbone of Azerbaijan’s exports; however, over the past decade, the role of the non-oil sector has been steadily increasing, with its share of the country’s GDP surpassing 68%. As a result, special attention is now being paid to attracting direct foreign investment into non-resource sectors, and in this regard, Azerbaijan has accumulated considerable experience in partnering with the United States. Over the past quarter-century, American construction companies, hotel chains, and manufacturers of passenger and cargo aircraft have operated very productively in Azerbaijan.

Leading U.S. vendors have participated as contractors, integrators, and equipment suppliers in the domestic telecommunications and IT markets, expanding access to broadband satellite internet services. The American payment system Mastercard and operators of banking networks have been involved in digitising Azerbaijan’s financial sector, particularly in building cashless infrastructure. While these areas remain important, today Azerbaijan is primarily interested in cooperating with American vendors and chipmakers, as well as developers of artificial intelligence (AI) solutions, digital infrastructure, and cybersecurity know-how.

Unfortunately, Azerbaijan has not yet achieved significant results in this area, and it is necessary to quickly overcome the lag behind regional neighbours. In November, global media reported prospects for attracting direct American investment to Armenia and launching projects in AI, semiconductors, and technology education. This involves participation by American tech giants such as Google, AWS, Meta, OpenAI, as well as Firebird, Dell, and NVIDIA in Armenian initiatives. Therefore, Azerbaijan–U.S. business agendas should primarily focus on IT production and digital technologies.

Cooperation in the financial sector is another important vector that Baku and Washington need to develop. During the recent 80th anniversary session of the UN General Assembly in New York, meetings were held with leading North American financial companies specialising in alternative investment management and interested in expanding partnerships with the State Oil Fund of Azerbaijan (SOFAZ). To jointly finance strategic projects, the creation of a joint Azerbaijan–U.S. investment platform has also been proposed, and work in this direction has already begun in collaboration with the U.S. Export-Import Bank (US EXIM Bank).

Diversifying investment flows in the non-oil sector requires new institutional solutions. To this end, a bilateral working group was established to develop a “Charter of Strategic Partnership,” and according to Azerbaijan’s Ministry of Foreign Affairs, its first meeting was recently held online: “During the session, the current state and prospects for bilateral cooperation were discussed in the areas of energy, regional transport connectivity—including trade and transit—economic investment, including in artificial intelligence and digital infrastructure.”

Baku and Washington see the need to establish direct contacts between the business communities of the two countries and to organise reciprocal B2B visits of business delegations. They also aim to develop cooperation in tourism and expand collaboration in transport and logistics within the framework of the Middle Corridor, including prospects for American companies’ participation in building the infrastructure of the “Trump Route for International Peace and Prosperity” (TRIPP).

All these steps contribute to the diversification of Azerbaijan–U.S. trade: from January to November 2025, bilateral trade reached nearly $1.365 billion, showing a slight increase compared to the previous year. Currently, the bulk of mutual trade consists of imports by American companies—cars, equipment, food products, gadgets, and computer hardware—while Azerbaijani exports are mainly oil, polymers, and gold.

Regarding domestic non-oil exports, in 2013 and 2019, with the support of the Azerbaijan Export and Investment Promotion Foundation (AZPROMO), attempts were made to enter the U.S. alcohol market through the Flavors of Azerbaijan and Wine & Spirits of Azerbaijan projects. However, it seems that at the present stage, additional efforts and the search for partners will be required to tap into the large American food market and expand exports of Azerbaijani wine and processed agricultural products.