Azerbaijan energy source diversification key to energy security amid oil output drop

Azerbaijani President Ilham Aliyev said June 1 that reliable energy security is directly linked to diversifying energy sources and applying innovative technologies, as the country grapples with declining oil output.

Azerbaijan's oil output has fallen in recent years. It produced 470,000 barrels/day of crude in April, according to the Platts OPEC+ survey by S&P Global Energy, Platts reported May 12. This is down from 650,000 barrels/day in January 2020.

Independent energy analyst George Voloshin said that Azerbaijan is unlikely to increase its crude oil production anytime soon due to the natural depletion of its mature oil reserves.

"The high oil prices Azerbaijan is currently receiving do not reverse the physical reality of aging infrastructure and depleting wells," Voloshin said.

Global oil prices have risen significantly in 2026, as conflict in the Middle East has hit oil production and supply infrastructure.

Platts, part of S&P Global Energy, assessed Dated Brent at $93.555/b on May 29, up from $70.94/b on Feb. 27, the day before the US and Israel attacked Iran.

Azerbaijan's Azeri Light yields significant portions of jet fuel, diesel and gasoline, often trading at a premium. Platts assessed Azeri Light CIF Augusta at $98.01/b May 29.

Aliyev said June 1 that the country's main priorities are efficient management of energy resources, development of renewable energy sources, accelerating the transition to green energy and the application of modern technologies, during his speech.

Azerbaijan is balancing the development of green energy projects with its existing significant oil and gas production.

"The implementation of large-scale 'green energy' projects with international energy companies and the coverage of natural gas exports in a wide geography further strengthen our country's role as a reliable and strategic partner in the global energy system," Aliyev said, in a speech during Baku Energy Week, according to a transcript of his speech posted on his official website.

Azerbaijan is a significant gas supplier to the EU, which has prioritized source diversification away from Russian imports since Russia invaded Ukraine in 2022.

It shipped 6.5Bcm for export in the first quarter of 2026, primarily to the EU and Turkiye, according to energy ministry data. It exports gas to 16 countries, including 10 in the EU.

Azerbaijan produced 12.6 bcm of natural gas in the first quarter of 2026. BP said June 1 that it has launched commercial gas production at the Azeri-Chirag-Gunashli oil field offshore Azerbaijan.