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Executive Director: SOFAZ considers risks and uncertainties related to oil and gas sector

Israfil Mammadov, Executive Director of the State Oil Fund of Azerbaijan (SOFAZ)

30 December 2025 14:31 (UTC +04:00)

The SOFAZ’s budget for the next year is prepared in close coordination with the state budget, and assumptions regarding oil prices are based on the medium-term forecasts of international organizations, said Israfil Mammadov, Executive Director of the State Oil Fund of Azerbaijan (SOFAZ), an interview with APA-Economics.

He stated that within the framework of the consolidated budget, when forming the state budget’s revenues and expenditures, maintaining SOFAZ’s budget indicators and the sustainability of its assets are considered among the main priorities.

"Overall, potential changes in oil prices during the year and the resulting possibility of revenue declines are taken into account in advance in the Fund’s planning and risk management mechanisms. At the same time, the role of income from investment activities increases in mitigating the impact of possible decreases in oil revenues. When forming its diversified investment strategy, State Oil Fund of the Republic of Azerbaijan considers the risks and uncertainties related to the future trajectory of the oil and gas sector, and decisions in portfolio management are based not on a single indicator but on a comprehensive model and prudent assumptions," Israfil Mammadov added.

In addition, SOFAZ pays special attention to maintaining an appropriate level of liquidity in the portfolio to ensure the execution of its budget obligations. The role of liquid assets, including bonds and money market instruments, in the portfolio is one of the key factors that provides fiscal flexibility during such periods.