Azerbaijan plays crucial role as energy supplier to Türkiye – trade minister (Exclusive interview)

 Azerbaijan plays a crucial role as an energy supplier to Türkiye, Trade Minister of Türkiye Omer Bolat told Trend in an exclusive interview.

Complementary each other, economies of Azerbaijan and Türkiye

“Azerbaijan is an important supplier of energy resources to Türkiye. Oil is transported to Türkiye through the Baku-Tbilisi-Ceyhan pipeline, and natural gas is transported through the Baku-Tbilisi-Erzurum gas pipeline. This increases Türkiye’s access to energy resources and makes Azerbaijan an important supplier in terms of energy imports,” said the minister.

He noted that Türkiye’s foreign trade volume in 2022 amounted to $617.9 billion.

“The volume of trade between Azerbaijan and Türkiye is $6.5 billion, or 1.05 percent of our total foreign trade volume. Moreover, Türkiye ranks second in both exports and imports for Azerbaijan. In the first nine months of 2023, the trade volume between our countries increased by approximately 18 percent compared to the same period of the previous year, exceeding $5.5 billion. Trade between the two countries is balanced and based on the ‘win-win’ principle,” he said.

Bolat mentioned electrical equipment, metal products, vehicles, chemical products, and textile products to be the main exports from Türkiye to Azerbaijan, while natural gas, oil, iron and steel, textile raw materials, and non-ferrous metals are the main imports from Azerbaijan to Türkiye.

“The complementary economic structures of our countries and our trade cooperation provide the opportunity to develop partnership on a productive basis. Azerbaijan is the first among Turkic states with which we have signed a preferential trade agreement. This reflects our deep and strong connections in international trade,” he noted. “In 2022, 84 percent of our exports were carried out by road transport, nine percent by air, five percent by sea, and 0.1 percent by rail. In 2022, 74 percent of our imports were delivered through pipelines, 13 percent by road transport, 12 percent by sea, and 0.1 percent by air.”

The role of Azerbaijan in the Trans-Caspian International Transport Corridor

Omer Bolat said cooperation between Türkiye and Azerbaijan contributes significantly to the regional supply chain, connecting countries from the Mediterranean to the Caspian Sea.

“Azerbaijan is a strategically important country along the Trans-Caspian International Transport Corridor (TITR, or Middle Corridor) route due to its location on the Caspian Sea coast and its realized potential. We anticipate the establishment of the Zangezur corridor, which will strengthen Azerbaijan’s position in the region,” he said.

The minister said that traditionally, trade between Türkiye and Central Asia has been routed through Russia and Iran, however because of the armed conflict in Ukraine and Russian sanctions, there are risks associated with transporting goods from China to Europe, which has increased the search for alternative routes. In this context, the Middle Corridor serves as an important alternative to ensure continuous trade between East and West.

“The efficient use of the Caspian Sea for transporting goods along the Middle Corridor is of great significance. However, efforts should be made to make transportation to Turkmenbashi in Turkmenistan and the ports of Aktau and Kuryk in Kazakhstan more effective. Ro-Ro (roll-on/roll-off) shipments on the Caspian Sea are irregular and need to become more regular and cost-competitive compared to the Iranian route,” he said.

Bolat noted that since March 2023, the tariff for Ro-Pax freight transport on the Turkmenbashi-Baku-Turkmenbashi route has been reduced to increase trade volumes through the Caspian Sea and enhance Turkmenistan’s transit transportation capabilities.

“Recently, Azerbaijan has taken significant steps to improve Caspian Sea transportation and has provided discounts, but Ro-Ro shipments in the Caspian have not yet reached the desired level due to high costs, small Ro-Ro vessel sizes, capacity issues, and transportation disruptions, especially in winter conditions. Improvements in these regions will encourage not just Azerbaijan and Türkiye, but also regional carriers, to adopt this route,” he said.

Thus, the reduction of high transportation costs on Azerbaijani highways, the complete liberalization of transit document quotas, an increase in the number and capacity of Ro-Ro vessels and the number of voyages, as well as a reduction in transportation time, will make the Middle Corridor more attractive and facilitate its development, Bolat noted.

“Meanwhile, the commissioning of the Zangezur Corridor, connecting Türkiye to Central Asia through the Nakhchivan Autonomous Republic and the main part of Azerbaijan, will facilitate trade. All these developments will contribute to improving the logistics position and strengthening the power of Azerbaijan and Türkiye,” he said.

By Nadeem Faisal Baiga