Kazakhstan and Azerbaijan Aim to Enhance Strategic Partnership
Author: Toghrul Aliyev
Apr 17, 2023
On April 10, Azerbaijan’s President Ilham Aliyev met in Astana with Kazakhstan’s President Kassym-Jomart Tokayev to further build their bilateral ties. With a delegation of ministers from Azerbaijan and Kazakhstan, the Presidents discussed key issues of the Kazakhstan-Azerbaijan strategic partnership, including regional and international issues such as strengthening political, economic, cultural, and humanitarian cooperation. Notably, the leaders reiterated their commitment to the further development of the Middle Corridor’s capacity and transport logistics. As Kazakhstan committed to sending an additional 950,000 barrels of oil from its Aktau Caspian Sea port to Azerbaijan’s Baku-Tbilisi-Ceyhan pipeline (BTC) during April, the development of the Middle Corridor route stood out as the priority of cooperation during the discussions.
Prior to this meeting, the Middle Corridor had been seen as only a small part of Kazakhstan’s export diversification efforts. However, as Tokayev committed to transitioning this route into “long-term status,” this meeting served to establish the framework for a durable trade partnership that aims to expand the region’s international consumer markets.
During the meetings in Astana, the two sides confirmed their commitment to maximize the full capacity of the Middle Corridor. President Tokayev emphasized the implementation of the roadmap for development of the Middle Corridor for 2022-2027 signed by transport and foreign ministers of Türkiye, Azerbaijan, Kazakhstan, and Georgia: “We have agreed that it is essential to take full advantage of the growing interest in this route and involve third countries in its infrastructure development.” In this line, it was noted that the current discussions are centered around improving logistical services, creating unified transport operators, and modernizing technical and tariff conditions, as well as eliminating administrative barriers and chokepoints.
Among the many significant geopolitical consequences of Russia’s war against Ukraine has been the boost in regional integration along the Middle Corridor. As the shortest pathway connecting Europe and Asia, the Trans-Caspian Corridor allows Central Asian states like Kazakhstan to bypass their traditional, Russia-oriented export routes for natural gas and crude oil, as well as to diversify their supply chains through introducing new land freight lines.
Another prominent topic in the meetings between Tokayev and Aliyev was cooperation in the energy sector. Specifically, the flow of oil from Kazakhstan to European markets through Azerbaijan is set to increase this year, following an agreement reached during the meetings. Earlier in March 2023, the State Oil Company of Azerbaijan (SOCAR) and KazMunayGas announced the first shipment of Kazakh oil through the BTC pipeline, with the second batch of oil transported on March 27. Now that the Middle Corridor sea route has successfully delivered oil to the BTC pipeline, the next goal is to increase the volume of shipments along this corridor.
During President Aliyev’s visit, both parties agreed to conduct 12-14 tanker voyages amounting to 1.5 million tons of oil between the ports of Baku and Aktau before the end of 2023. Historically, Kazakh crude oil has been mainly transported to worldwide markets through Russia via the Caspian Pipeline Consortium (CPC). However, the uncertainties stemming from the sanctions imposed on Russia following its invasion of Ukraine have prompted the Kazakh government to seek viable alternative routes for its energy exports.
While both states funnel investments into the Middle Corridor’s transit logistics and infrastructure upgrades, Tokayev stated that their “primary task in the current period is to diversify the shipment of our energy resources to world markets.” Once new markets are reached, and additional trade partnerships are established, the Middle Corridor has great potential to attract foreign investments to further improve its capacity.
Increasing bilateral trade is also among the priorities on the agenda for Kazakhstan and Azerbaijan. During his visit to Baku for the 19th meeting of the Azerbaijan-Kazakhstan Intergovernmental Commission, Kazakhstan’s Deputy Prime Minister and Minister of Trade and Integration, Serik Zhumangarin, stressed the importance of developing trade cooperation. He noted that the current trade turnover between the two countries, which is between $400 and $500 million per year, is a “very low volume,” and that there are vast opportunities to unlock the full potential of the benefits from increased trade. In this regard, the Kazakhstani side prepared a list of over 100 items totaling $300 million to be offered for sale in the Azerbaijani market, with specific proposals on potential cooperation projects.
The two countries have had a longstanding partnership; however, the past year has seen great improvement in their economic relations. Tokayev reflected on this, stating “-relying on the unshakable bonds of centuries-old friendship and mutual support, we have built effective interstate cooperation, which today is developing in the spirit of a true strategic partnership and alliance." President Aliyev further emphasized the importance of building upon bilateral cooperation: “The fact that we meet so often during official visits speaks both of the nature of our relations and of the fact that there is a need to be in contact - because our meetings are of regular nature at various international venues, but the bilateral format is the most effective.”
Looking ahead, further developments in the bilateral cooperation between Azerbaijan and Kazakhstan are expected to intensify, especially in light of the uncertainties caused by the Russian invasion of Ukraine. Russian aggression in Ukraine, and its spillover effects in the form of sanctions, trade restrictions, and political pressure, have re-emphasized the need to boost cooperation in the Caspian Sea region, which has traditionally been referred to as a Russian sphere of influence.
Being on a strategic trade route such as the Middle Corridor, Kazakhstan and Azerbaijan’s roles in global political economy have become more important. As a part of the transit route connecting Europe to Asia, the Middle Corridor is more cost-effective and faster compared to the Northern Corridor that runs through Russia. Thus, full utilization of the route’s promising potential necessitates further strengthening bilateral relations between Kazakhstan and Azerbaijan, as the two presidents are clearly working to do.