The Daily Baku
International
Armenia–Azerbaijan trade: natural gas is the ultimate prize
January 8, 2026
17:26
Prime Minister Pashinyan has stated that Armenia and Azerbaijan are currently discussing a list of goods that could be traded, in addition to gasoline that Azerbaijan already sells to Armenia. The key question, however, is what the real prospects for trade between the two countries are.
There are significant obstacles to meaningful bilateral trade, including the absence of direct transport links and the lack of cooperation between enterprises in Armenia and Azerbaijan.
Armenia could, in principle, supply Azerbaijan with a variety of goods through re-exports, drawing on its extensive experience in re-exporting products to Russia. However, Azerbaijan is unlikely to be interested in Armenia playing such a role. More realistically, Armenia could export jewellery products—which constitute a significant share of Azerbaijan’s current imports—as well as some processed food products and certain vegetables. Aluminium and copper could also become viable trade items.
Azerbaijan, for its part, could expand the range of its exports to Armenia to include cement, plastics, and other processed petrochemical products.
Azerbaijan’s ability to increase gasoline exports is currently limited until modernization of the Heydar Aliyev Oil Refinery is completed. Once the upgrade is finalised, however, Azerbaijan could potentially cover a substantial share of Armenia’s annual petroleum products consumption, which amounts to roughly half a million tonnes.
The true game changer would be the supply of Azerbaijani natural gas to Armenia. Technically, Azerbaijan is capable of fully meeting Armenia’s gas demand through existing pipeline networks via Georgia. Achieving this, however, would require addressing Armenia’s existing contractual obligations with Russia.
The Daily Baku Editorial Team
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