New chapter in Azerbaijan-US economic relations post Washington summit “Contract of the century” and beyond

The triumphant visit of Azerbaijan’s President Ilham Aliyev to Washington has laid the groundwork for a significant upgrade in bilateral trade and economic relations. During a recent special session of the Cabinet of Ministers dedicated to the results of the president’s visit to the US, new directions for Azerbaijani-American business cooperation were announced. 

Among the priorities are increasing trade turnover, supporting promising projects through the US EXIM Bank, establishing an Azerbaijani-American investment platform, and implementing joint initiatives in energy, green technologies, IT, transportation, and logistics.

Since gaining independence, Azerbaijan has prioritised developing political, economic, and humanitarian ties with the United States as a central part of its foreign policy. Diplomatic relations were established on February 28, 1992. 

In 1996, the US Chamber of Commerce officially opened its office in Azerbaijan, now representing around 250 American companies and business associations and coordinating their activities. Additionally, a working group on bilateral relations has been formed within Azerbaijan’s parliament, the Milli Majlis. Over the years, the two countries have signed several bilateral agreements covering trade, investment, avoidance of double taxation, and other key areas of economic cooperation.

A crucial milestone that defined the nature and goals of long-term economic ties between Azerbaijan and the United States was the signing of the "Contract of the Century" in September 1994. Under this landmark agreement, leading American oil companies—Amoco, Exxon, as well as Pennzoil and Unocal Corporation (the latter now part of Chevron)—were involved in oil contracts, accounting for approximately 47% of all foreign investment attracted to the oil sector at that time. 

The prominent American engineering and construction firm McDermott also participated in implementing numerous projects under the "Contract of the Century." US energy companies were additionally involved in the establishment of the consortium for the development of Azerbaijan’s "Dan Ulduzu" and "Ashrafi" fields in December 1996, where American companies Amoco and Unocal Corporation held a 55.5% stake.

"Overall, from 1995 until the end of March 2025, the United States has invested $18.9 billion in Azerbaijan’s economy, including $17.4 billion in the oil and gas sector and $1.5 billion in the non-oil sector," Economy Minister Mikail Jabbarov said at a special Cabinet meeting dedicated to President Ilham Aliyev’s visit to the US. "The United States ranks fifth in Azerbaijan’s foreign trade turnover and fourth in imports."

As the minister noted, a comprehensive legal and contractual framework has been established between the two countries on the business track, comprising 87 documents. It is also worth recalling that in 2007, the Azerbaijan-US Economic Partnership Commission was created as an institutional mechanism for cooperation between the two nations; the most recent meeting of the commission took place in May 2019 in Baku.

Energy is far from the only area of Azerbaijani-American economic relations: American construction companies and hotel chains have long been present in the local market, and relations with Boeing have been particularly fruitful, with the company’s aircraft playing a significant role in Azerbaijan’s passenger fleet for several decades.

Additionally, American businesses are among the leaders in Azerbaijan’s telecommunications and IT sectors, as well as in the digitalisation of the financial sector. Microsoft, Cisco Systems, Oracle, Symantec Corporation, Lockheed Martin, Trimble Navigation, HP, Booz Allen Hamilton, Harris Corporation—this is by no means a complete list of leading American vendors who have participated at various times as contractors, integrators, and equipment suppliers in projects implemented in Azerbaijan. More recently, broadband satellite internet services from the American company Starlink have become available in Azerbaijan.

As of August 2025, approximately 300 US companies are registered in Azerbaijan, operating across sectors such as agriculture, industry, transportation, construction, and trade. Of these, 220 companies are active and conduct business in the local market. Recently, trade relations between Azerbaijan and the United States have become particularly vibrant.

“Trade cooperation between Azerbaijan and the United States has been steadily growing for many years,” Jabbarov stated at a special government session. “In 2024, the volume of mutual trade reached $1.7 billion, representing a 94% increase compared to 2023.”

Judging by the outcomes of Azerbaijan’s President Ilham Aliyev’s visit to Washington, new positive trends are expected to emerge soon in Azerbaijani-American trade and investment relations.

“The historic documents signed during the visit contribute to elevating Azerbaijani-US relations to a new stage of development and to the level of strategic partnership,” Prime Minister Ali Asadov stated recently at a special government session. 

The Prime Minister also emphasised the importance of signing the memorandum of cooperation between the State Oil Company of Azerbaijan Republic (SOCAR) and ExxonMobil during the visit, marking the implementation of a new phase of partnership initiated under the national oil strategy established by the ‘Contract of the Century.’

“Azerbaijan expects the discovery of a major oil field with the support of the American company ExxonMobil,” Mikail Jabbarov said during the meeting. “Overall, the memorandum of cooperation will have a positive impact on the development of the partnership in the energy sector.” The Minister of Economy also emphasised that Azerbaijan’s electric power resources, including its renewable energy potential, make the country attractive for investment.

Overall, the positive discourse being shaped today provides grounds to believe that in the future, Azerbaijani-US business ties may expand through increased investment, including the creation of joint ventures and investments in the non-oil manufacturing sector.

“To jointly finance strategic projects in the region, we propose creating a joint Azerbaijani-American investment platform and will collaborate closely with the US Export-Import Bank [US EXIM Bank],” Minister Jabbarov said. 

He highlighted that during a recent meeting with the US EXIM Bank’s president and chief advisor—attended by SOCAR’s president—productive discussions were held on Azerbaijan’s economic development and diversification, as well as new opportunities for major investment projects. The minister emphasised that the US EXIM Bank will provide financial support tools for projects in Azerbaijan’s energy sector, green transition, transit and logistics, and innovation.