A decline in oil prices below the projected level could lead to a weakening of oil and gas revenues and, consequently, the fiscal balance of the consolidated budget, as well as a reduction in the assets of the State Oil Fund of Azerbaijan (SOFAZ), APA reports.
This is reflected in the 2027 State Budget Package of the Republic of Azerbaijan, submitted for discussion at the Economic Policy, Industry and Entrepreneurship Committee of the Milli Majlis.
The document notes that analyzing the potential impact of price fluctuations in the global energy market, production prospects and geopolitical developments on fiscal indicators is of particular importance.
To account for uncertainties in the oil market, various risk scenarios have been developed based on oil prices deviating by $10, $15 and $20 above and below the baseline forecast. Taking into account expectations in the global oil and gas market, the impact of different oil price scenarios for 2027–2030 on the consolidated budget balance, budget revenues and the assets of the State Oil Fund has been calculated.
According to the baseline scenario, SOFAZ's assets are expected to approach $78.3 billion in 2030. Under extreme scenarios, this figure could differ from the baseline by approximately $8 billion in either direction.
The document also notes that the fiscal break-even oil price is projected to reach $65 per barrel in 2030. This is significantly lower than the current figure of $85.
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