Alihüseyin Guluzade: Prospects for Economic Cooperation between Azerbaijan and Russia within the Framework of the St. Petersburg International Economic Forum (SPIEF-2025)

This material will assess the prospects of Azerbaijan’s use of the SPIEF-2025 platform not only in the context of practical interaction with Russia in the spheres of trade, logistics, energy, and digital technologies, but also from the point of view of a key strategic instrument in achieving its foreign and domestic economic goals.

Introduction

In 2025, relations between Azerbaijan and Russia demonstrate a complex and, at first glance, paradoxical character: a controversial situation in the diplomatic corridors (in connection with the plane crash) is intertwined with deepening economic cooperation. The coexistence of these two divergent vectors testifies to a deep pragmatism in the Baku-Moscow track, where strategic economic imperatives prove stronger than political turbulence.

I. Current Economic Dynamics

Trade turnover between the countries has continued to show steady dynamics in recent years. For instance, in 2023, it reached a historic high of $4.4 billion, an increase of 17.5%. In 2024, this trend continued: trade turnover grew by another 10.1% to almost $4.8 billion (1). It is worth noting that some sources provide an even higher estimate, approaching $7 billion (2), which is likely due to differences in calculation methodologies.

However, the most indicative dynamics were seen in early 2025, at the height of the diplomatic crisis between Baku and Moscow. Specifically, from January to April 2025, trade turnover jumped to $1.824 billion (3), showing a staggering growth of 39.4% compared to the same period in 2024. This surge can be explained primarily by a sharp increase in imports from Russia to Azerbaijan, which grew 1.5 times, while exports from Azerbaijan to the Russian Federation slightly decreased.

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Incidentally, Russia continues to maintain its status as a key economic partner for Azerbaijan, especially in the non-oil sector, where it accounts for more than 30% of all non-oil Azerbaijani products.

In addition, one cannot overlook the Russian-Azerbaijani investment cooperation, which continues to demonstrate a high level. For example, accumulated Russian investments in the Azerbaijani economy are estimated at $8.7 billion, while Azerbaijani investments in Russia, in turn, exceed $1 billion(4).

II. Cooperation within Changing Geopolitical Realities

Given the unstable, complex geopolitical situation in the world and the erosion of the traditional foundations of international security that formed after the end of World War II, several factors are creating a completely new format of interaction for Baku with Moscow in the current conditions.

– First and foremost, this includes the possible easing of sanctions against Russia, which could open up prospects for the completion and restoration of major joint projects with Azerbaijan.

– A simultaneous reduction in tensions on the RF–US track and, in the long term, signs of intensified peace negotiations with the Ukrainian side could also improve the investment climate between Baku and Moscow, reducing geopolitical risks for both sides.

III. North–South ITC and the Zangezur Corridor

Overall, Baku has managed to create an effective transport system that fits organically into key transit corridors, thereby turning the country into an international transport and logistics hub.

The North–South International Transport Corridor has shown a 42% increase in cargo traffic since 2023. For example, the Baku port, as part of this project, handled about 15 million tons of cargo last year (2024), and an increase in capacity to 25–30 million tons is expected in the coming years (5).

It is worth noting that Azerbaijan’s role as a key link in the North-South ITC has become strategically indispensable for Moscow, providing the latter with access to the markets of Iran, India, and the Persian Gulf countries. Thus, economic relations for Russia have acquired the character of a strategic necessity, which provides Baku with significant leverage.

An important role should also be assigned to the implementation of the Zangezur Corridor through Nakhchivan (Azerbaijan), which, according to various estimates, is capable of handling up to 35 million tons of cargo per year (6).

IV. Agro-industry, Digitalization, and AI Strategy

In recent years, Azerbaijan has continued to actively strengthen its position in the Russian agricultural market and in the processing industry.

In January-April of this year, Azerbaijan exported non-oil and gas products to Russia worth $321.4 million, which is 1.2%more than in the same period last year (7), representing an 18% increase compared to the same period in 2024, amounting to $1.1 billion.

Azerbaijan is actively integrating artificial intelligence (AI)into its agricultural sector to increase efficiency and productivity, providing flexible opportunities for large projects in agro-parks and optimizing business planning and budget control (8).

AI is seen as a key tool whose effectiveness increases manifold when integrated with cloud solutions, the Internet of Things (IoT), and cybersecurity, allowing farmers to timely analyze plant conditions and optimize irrigation and temperature monitoring processes.

The use of AI is already being implemented in a number of farms (9), in particular, through the installation of AI-based climate stations, which are a prerequisite for receiving subsidies for intensive fruit orchards and provide farmers with important data on weather and growing conditions.

Conclusion and Expectations

🔘 The intensive growth of trade turnover, large-scale infrastructure projects, and digital integration with Russia very clearly demonstrate that Azerbaijan is on the path to becoming a systemic player in the Eurasian space and in the countries of the Global South, and not just remaining a transit hub between Europe and Asia, and North and South.

🔘 Azerbaijan will most likely view SPIEF-2025 not just as another economic forum, but as the starting point for a new economic engine for the country. Specifically, in the context of cooperation with Russia, by 2026, the total turnover could reach $1–1.2 billion, and investments could grow by 20–25% per year.

🔘 Along with the increase in trade and economic cooperation between Russia and Azerbaijan, questions about preserving the concepts of regionalism and non-interference of third forces in the South Caucasus will periodically arise. Therefore, in this context, the implementation of the North–South and Zangezur Corridor projects provides Baku with additional geopolitical flexibility, reducing dependence on routes through third countries.

🔘 On the sidelines of SPIEF-2025, it is highly probable that discussions may be held on the improvement of agro-complexes in Gabala and Agdam, as well as the intensification of the introduction of Halal certification between the two countries. The introduction of AI-technological solutions (R&D) for pest control and crop monitoring cannot be ruled out either.

🔘 It is also worth noting the discussions on improving logistics and promoting products to the markets of the CIS and the Middle East.

🔘 Also within the framework of SPIEF-2025, discussions may take place on the creation of a single operator for railway and port infrastructure, the simplification of customs and sanitary procedures, as well as the development of digital logistics using a single IT platform for tracking and managing cargo flows.

🔘 Thus, Russia can become a key market for high-quality products, agro-technological solutions, and related infrastructure for Azerbaijan.

Sources:

1 Товарооборот между Азербайджаном и РФ в 2024 г. вырос на 10% – https://www.finmarket.ru/news/6327833

2 Товарооборот Азербайджана со странами СНГ вырос за четыре месяца вырос – https://www.alta.ru/external_news/119701/

3 В первом квартале товарооборот между Азербайджаном и Россией вырос в 1,6 раза – https://www.finmarket.ru/news/6382589

4 Импорт и экспорт Азербайджана и России – https://scs-aero.ru/blog/import-i-eksport-azerbajdzhana-i-rossii/#:~:text=Суммарные%20российские%20инвестиции%20в%20экономику%20АР%20—%20около%208%20млрд%20US%24.%20Встречно%20и%20Азербайджан%20вложил%20в%20российскую%20экономику%20более%201%20млрд%20100%20млн%20US%24

5 Контейнерные перевозки по восточной железнодорожной ветке МТК «Север – Юг» выросли на 63% в I квартале – https://www.infranews.ru/logistika/containeri/67489-kontejnernye-perevozki-po-vostochnoj-zheleznodorozhnoj-vetke-mtk-sever-yug-vyrosli-na-63-v-i-kvartale/

6 Ставка на Зангезур: геополитический фактор повысил интерес к коридору – https://oxu.az/ru/politika/stavka-na-zangezur-geopoliticheskiy-faktor-povysil-interes-k-koridoru

7 Azərbaycan Rusiyaya qeyri-neft-qaz ixracını 1 %-dən çox artırıb – https://report.az/biznes-xeberleri/azerbaycan-rusiyaya-qeyri-neft-qaz-ixracini-1-den-cox-artirib/

8 Attilio Somma: “Aqrar sahədə süni intellekt yalnız vasitədir, əsas inteqrasiya və planlaşdırmadır” – https://report.az/ask/attilio-somma-aqrar-sahede-suni-intellekt-yalniz-vasitedir-esas-inteqrasiya-ve-planlasdirmadir/

9 Azərbaycanda aqrar sahədə süni intellektin tətbiqinə başlanılıb – https://report.az/ask/azerbaycanda-aqrar-sahede-suni-intellektin-tetbiqine-baslanilib/