Azerbaijan and Turkey’s growing strategic role in Euro-Asian economic relations

Currently, the security of energy and trade routes is one of the main considerations globally. In the shadow of recent world events, the importance of energy resources is more likely to become a mainstream issue as the global economy demands the enormous needs of these resources.

Europe’s energy supply, especially southern and south-eastern Europe, depends on a single source. However, the European Commission is accelerating economic diversification processes starting with gas routes in order to reduce economic dependence. Therefore, the EU has already had various discussions with energy players such as Egypt, Qatar, the United States, South Korea, Nigeria and Azerbaijan to increase the supply of natural gas in the event unexpected gas crisis.[1]

– Role of Azerbaijan and Turkey in EU energy policies

Recently, Azerbaijan supplied gas via Turkey to some EU countries such as Italy, Greece and Bulgaria via the Southern Gas Corridor. One of the main advantages of using this route is the minimal possibility or absence of a gas crisis and price disputes. These show that the role of Azerbaijan as a gas supplier and Turkey as a credible transit hub in European energy security will increase significantly in a short period of time.

Azerbaijan is officially recognized as a strategic energy partner for the EU and plays a central role in bringing Caspian energy resources to the EU market. As an important energy partner of the EU, Azerbaijan currently supplies around 5% of EU gas demand.[2] Thus, cooperation between Azerbaijan and the European Union, particularly in the field of energy, is of a strategic nature.

– Carried out well-prepared policies and colossal projects by Azerbaijan and Turkey

Certainly, the existing geo-economic realities are the result of long-term targeted policies and implemented mega-projects. Despite the challenges, Azerbaijan and Turkey have demonstrated their leadership and strong commitments in many cases in regional development projects, which aimed at diversifying and improving energy and logistics routes between Asia and the United States. ‘Europe. For example, the construction of the South Caucasus Pipeline (SCP) aimed to export gas from Shah Deniz to the European continent via Georgia and Turkey. This energy corridor is unquestionably the unique project through which natural gas from the Caspian Sea meets its consumers in European markets. Baku-Tbilisi-Ceyhan Oil Pipeline, Baku-Tbilisi-Kars Railway, Baku-Tbilisi-Erzurum Gas Pipeline, Western Route Export Pipeline (oil) and other projects can also be mentioned in this regard. The successful implementation of these projects and strong commitments are generally aimed at restoring the ancient Silk Road and developing cooperation of countries in the region.[3]

It is evident that these projects have far-reaching impacts on the energy and trade maps of the region and that new players, such as Azerbaijan and Turkey, are acting as more active initiators and key implementers in the new geoeconomic realities. . Therefore, it is no coincidence that Turkey has become one of the power centers not only regionally, but globally recently.

– New geoeconomic realities and perspectives

On March 8, the European Commission announced its plans in 2022 to reduce the EU’s dependence on Russian gas by two thirds.[4] Additionally, the EU and the US reached an agreement on March 25 to increase US LNG shipments to Europe by 15 billion cubic meters before the end of this year. Additional increases of up to 50 bcm per year are expected in subsequent years.[5] At the same time, the use of renewable energy resources is a highly anticipated trend.[6] However, it is clear that these resources will not meet all the needs of European consumers in a short period of time. Thus, the increasing role of new energy routes will be one of the main trends in European markets in the short term.[7]

In addition to the projects mentioned above, Azerbaijan, Iran and Turkmenistan signed an agreement on Turkmen gas exchange on November 28, 2021. The size of the gas exchange agreement can reach 2 billion cubic meters per year.[8] The diversification of gas routes and the availability of such agreements signed by Azerbaijan, Iran and Turkmenistan opens a new era for the possibilities of exporting energy resources from the Caspian Sea to European markets through these channels. Therefore, the utilization of its intact gas reserve potential in the Caspian Sea as well as access to natural gas sources from other countries in the Caspian Sea region such as Turkmenistan and Iran, the Azerbaijan and Turkey have huge prospects for increasing gas resources to Europe.

The importance of alternative trade and energy routes between Europe and Asia has become more visible after the Evergreen ship crisis, the tension on the border between Poland and Belarus and the imposition of new sanctions on Russia. Currently, around 50% of EU-related rail freight passes through Russia and Belarus[9]. Given the sanctions against Russia, the shift of trade routes to the Middle Corridor via Azerbaijan and Turkey is more likely to occur as this is the only viable alternative route connecting West and East in the current situation.[10]. In addition, the implementation of the Zangezur Corridor will enhance the potential of energy and trade routes that cross Azerbaijan and Turkey. Obviously, the concept of the Zangezur Corridor creates opportunities not only for the opening of railways between Europe and Asia, but also for the exploitation of energy, roads, trade routes, airlines, electricity, etc. along this transport artery.

Therefore, current processes show that the importance of energy and trade hubs in the Eurasian region will be even greater in the near future. Thus, the role of Azerbaijan and Turkey as key players, which have managed to establish effective and reliable relations with all economic partners and have become economic centers by using geographical opportunities, will be further expanded. This kind of growing role of Turkey and Azerbaijan in regional economic processes will make all stakeholders and global players interested in the stable development of geoeconomic and geopolitical conditions around Azerbaijan and Turkey.

* The opinions expressed in this article are those of the author and do not necessarily reflect the editorial policy of Anadolu Agency.

[1] https://www.Reuters.com/world/…

[2] https://ec.europa.eu/neighbor…

[3] https://www.dailysabah.com/opi…

https://www.bp.com/en_az/azerb…

https://www.bp.com/en_az/azerb…

https://www.eurasian-research….

[4] https://www.euractiv.pl/section…

[5] https://www.theguardian.com/us…

[6] https://jamestown.org/program/…

[7] https://jamestown.org/program/…

[8] https://www.aa.com.tr/en/world…

[9] https://theloadstar.com/ukrain…

[10] https://top-center.org/en/anal…

https://www.railfreight.com/be…

Sharon P. Juarez