The conflict around Iran could create additional export opportunities and budget revenues for Azerbaijan amid rising energy prices, APA-Economics reports, citing the international rating agency Fitch Ratings.
According to the agency’s assessment, if energy prices remain high for a prolonged period, this could lead to increased export and fiscal revenues for hydrocarbon exporters located outside the Gulf region – Azerbaijan, Angola, Argentina, Brazil, Colombia, Ecuador, Gabon, Kazakhstan, Nigeria, and Congo.
According to Fitch, Azerbaijan has one of the highest shares of fossil fuel exports in GDP among selected developing countries. Thus, net fossil fuel exports account for 28.8% of GDP.
The agency also notes that in 2024 the volume of fossil fuel subsidies in Azerbaijan amounted to approximately 5.5% of GDP.
At the same time, Fitch points out that if instability within Iran intensifies, Azerbaijan, Iraq, and Türkiye may be affected by a possible influx of refugees from Iran.
According to the agency’s baseline scenario, if the actual closure of the Strait of Hormuz lasts for less than one month and the region’s oil infrastructure does not suffer serious damage, the impact on the credit ratings of developing countries will be limited.
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