Iran-Azerbaijan energy cooperation: current realities and new prospects

The model of energy cooperation established between Iran and Azerbaijan has emerged as one of the most significant pillars of bilateral relations in recent years. Contacts held during Baku Energy Week demonstrate that both sides are committed to advancing existing projects and launching new initiatives, reflecting a strong political will to further deepen cooperation.

Collaboration between the two neighbouring countries extends far beyond the exchange of energy resources. The integration of electricity systems, implementation of joint hydropower projects and development of energy infrastructure along regional transport corridors are contributing to stronger regional cooperation. This process not only generates economic benefits but also enhances energy security across the South Caucasus.

At a time when uncertainty in global energy markets continues to grow, the effective utilisation of opportunities by Azerbaijan and Iran is becoming increasingly important. The two countries' abundant resources, industrial capabilities and strategic geographical positions create favourable conditions for expanding cooperation in oil, gas, energy transit and renewable energy. In this regard, recent discussions suggest that the partnership may be entering a new phase of development.

Speaking to News.Az, Alireza Jabbari, Deputy Head of Mission at the Embassy of the Islamic Republic of Iran in Azerbaijan, said that meetings held during Baku Energy Week once again highlighted the strategic importance of energy cooperation between Iran and Azerbaijan.

Photo: Alireza Jabbari, Deputy Head of Mission at the Embassy of the Islamic Republic of Iran in Azerbaijan

"The active participation of a delegation headed by a deputy oil minister of the Islamic Republic of Iran in events organised within the framework of Baku Energy Week, its presence at the D-8 Energy Ministers' Meeting, as well as bilateral discussions with the energy minister of the Republic of Azerbaijan and the leadership of SOCAR, once again confirmed the crucial role of energy in Tehran-Baku relations and the need to make full use of the existing potential," he added.

According to him, the energy partnership between the two countries has been built over many years around significant projects based on mutual interests.

"Iran and Azerbaijan, thanks to their deep historical, cultural and geographical ties as neighbouring countries, possess unique opportunities for cooperation in the energy sector, particularly in the Caspian basin," he said.

"For this reason, following Azerbaijan's restoration of independence, energy cooperation between the two countries has centred on three key areas: gas swap operations, electricity exchange, and the joint construction and operation of the Khudafarin and Giz Galasi hydropower complexes on the Araz River," Mr Jabbari noted, adding that these projects have played "an exceptional role" in ensuring regional energy security, particularly by providing gas and electricity supplies to the Nakhchivan Autonomous Republic.

He stressed that the resources and infrastructure available in both countries provide a strong foundation for the implementation of new joint energy projects.

"In addition, the rich hydrocarbon resources of both countries, their extensive energy infrastructure, advanced engineering and technical capabilities, and strategic geographical positions along international transport and energy corridors create unique opportunities for the implementation of joint projects in the oil, gas, petrochemical and renewable energy sectors," he said.

The Iranian diplomat emphasised that strengthening regional cooperation has become especially important amid rising risks in global energy markets.

"In the current era, marked by increasing challenges and risks related to global energy security, deepening the regional partnership between Iran and Azerbaijan is more important than ever," Mr Jabbari said, adding that Baku Energy Week could pave the way for new joint initiatives, encourage mutual investment and elevate technological cooperation between Tehran and Baku to a qualitatively new level.

The deputy ambassador also believes that contacts established through international platforms contribute to strengthening trust and accelerating economic integration across the region.

"Undoubtedly, such international platforms help reinforce mutual trust among regional states, accelerate economic integration and expand strategic partnerships," he said.

"The Iran-Azerbaijan energy dialogue, as part of this broader trend, has the potential to enter a more dynamic and productive stage of cooperation through a constructive approach and forward-looking policies," Mr Jabbari concluded.

News.Az