Azerbaijan
Azerbaijan exhibits keystone-species dynamics: the BTC pipeline carries 74.5% of its oil to Europe while the Middle Corridor positions it as a China-Europe transit hub.
Azerbaijan controls the critical infrastructure that connects Caspian oil and gas to European markets. The Baku-Tbilisi-Ceyhan (BTC) pipeline carries 74.5% of Azerbaijan's oil exports—20.5 million tons in the first nine months of 2025—while the Trans Adriatic Pipeline (TAP) delivers gas that Europe is doubling by 2027 to reduce dependence on Russia. This pipeline infrastructure makes Azerbaijan a keystone species in European energy security.
The geography creates contradictions. Azerbaijan has 800 km of Caspian coastline but remains landlocked—the Caspian Sea connects to no ocean. The Nakhchivan exclave, separated from the mainland by 32 km of Armenian territory, has become central to regional negotiations: the proposed Zangezur corridor would connect Azerbaijan's two parts while providing Turkey land access to the Caspian. The August 2025 peace treaty with Armenia, signed at the White House, may enable this transit route.
Hydrocarbons dominate: 50% of GDP, 90% of exports, 60% of fiscal revenues. But oil production has declined since 2010 as Caspian fields deplete—output fell 5% year-on-year in early 2025. A new offshore platform launched in April 2025, and rising gas production temporarily offsets the decline. The government is allocating $2.5 billion to reconstruct territories regained from Armenia.
Azerbaijan's strategic positioning extends beyond energy. The 'Middle Corridor' concept—a multimodal route connecting China to Europe via Central Asia, the Caspian, and Turkey—positions Azerbaijan as a transit hub bypassing both Russia and Armenia. In July 2025, parliament authorized casinos on artificial Caspian islands. Whether these diversification efforts can replace depleting oil revenues will determine if Azerbaijan's infrastructure advantages outlast the hydrocarbons that built them.