UNION OF INTERESTS

The visit of the Prime Minister of the Czech Republic, Andrej Babis, to Azerbaijan, and the Azerbaijan-Czech business forum held in Gabala, sent a clear signal to business circles in Europe and the South Caucasus. In the context of ongoing restructuring of energy routes, challenges to logistics chains, and new industrial competition, Baku and Prague have successfully transitioned from a conventional trade model to exploring a strategic economic alliance. Furthermore, this issue concerns not only oil, which for many years remained the foundation of bilateral ties, but also gas, transport, industrial cooperation, investments, and new technologies.

It is clear that the decision of Babis to visit Azerbaijan as his first foreign destination is of significant importance. As President Ilham Aliyev noted, "We see this as a sign of friendship, a demonstration of respect, and also as proof that both countries genuinely need each other… Today, Azerbaijani-Czech friendship and cooperation are once again confirmed, opening up excellent prospects for us."

Energy without alternatives

Again, the negotiations were primarily focused on energy. This is an organic development: the European market is currently seeking reliable suppliers, while Azerbaijan is consolidating its position as a stable exporter of raw materials and gas.

President Ilham Aliyev emphasised that Azerbaijan "is among the reliable countries exporting its energy resources to global markets," with Azerbaijani gas currently supplied to 16 countries, ten of which are members of the European Union. "Among them, Azerbaijan exports natural gas to countries neighbouring the Czech Republic. We can confirm that this issue was discussed at today's meeting, and it was agreed that we will cooperate in this area in the future. We adopt a comprehensive approach to this matter. These will not be mere trade transactions or energy resource exports. We view this as broader, long-term cooperation," stated the Azerbaijani leader.

Energy is of particular importance for the Czech Republic in its economic relations with Azerbaijan. Andrej Babis made the following statement: "Azerbaijan is the largest supplier of oil to the Czech Republic. Azerbaijan is a significant source of imported oil, accounting for 42% of the total. This is indicative of a genuine reliance of one of Europe's industrial hubs on reliable supplies from the Caspian region, a situation that has thus far been unproblematic. As both leaders emphasised, oil accounts for the lion's share of trade turnover between the countries, which reached €1.75 billion by the end of 2025.

A key focus during the visit was also on gas, as would be expected given the current geopolitical situation, which is directly affecting the global gas market.

"The Czech Republic has already sent four letters to all state leaders, the European Commission, and the EU. We are concerned about the European 'green' policy, which needs to be completely revised. At present, it is having a negative effect on European industry through ETS-1 and ETS-2, and is also having an adverse impact on the lives of European citizens. We are currently facing a situation in the Strait of Hormuz. Europe is turning back to oil and gas," Babis noted.

He added that the Czech semi-state company ČEZ had arrived in Baku with the intention of signing a gas supply contract. Consequently, in addition to its role in the oil sector, Azerbaijan has the potential to become a strategic partner for the Czech Republic in this sector as well.

In light of the current volatility in the European gas market, this interest represents a pragmatic step. For Azerbaijan, this means expanding its presence in Central European markets and strengthening its export geography.

Another key point to note is that Baku provides partners with a comprehensive energy agenda. According to Ilham Aliyev, strategic cooperation could encompass "oil, gas, petroleum products, petrochemicals, fertilisers, electricity, artificial intelligence, data processing centres." This transition exemplifies Azerbaijan's strategic shift from a primary raw material supplier to a prominent platform for industrial and technological solutions.

Investment and industrial shift

While energy remains the foundation of these relations, a new agenda is emerging around investments and joint production. The Azerbaijani president provided a detailed overview of the macroeconomic factors that make the country an attractive investment prospect. The most important of these is the stability of the national currency, which is a key indicator for any investor of predictability and reduced currency risk.

Furthermore, the scale of attracted capital is noteworthy: over the past two decades, $350 billion has been invested in Azerbaijan, with almost half of this amount originating from foreign partners. Statistics of this kind are important for two reasons. Firstly, they provide a retrospective view. Secondly, they act as a signal to new market participants.

Another factor fostering trust is the improved international assessment of the country. Aliyev also recalled that Moody's had upgraded Azerbaijan's credit rating to investment grade with a positive outlook.

Meanwhile, Czech economic interest in Azerbaijan is pragmatic. A delegation of 50 companies arrived in Baku, representing sectors such as mechanical engineering, energy, transport, defence industry, geology, finance, and infrastructure solutions. Babis stated that demand was so high that they were considering 100 companies. This is an exceptional instance of the provision of such comprehensive business assistance accompanying a political visit.

It was also mentioned that defence industry cooperation remains an important area between the countries—Azerbaijan is known to purchase many military products from the Czech Republic. During the visit, President Ilham Aliyev confirmed that negotiations on specific joint production projects are ongoing. The head of state expressed confidence in the sector's potential for large-scale development, noting that Azerbaijan's defence capacity is partly ensured through domestic production.

For Azerbaijan, the localisation of production is of particular importance. Ilham Aliyev's remarks about prioritising "industrial development and joint production" can be regarded as a key formula for future cooperation.

Logistics and transport

The third area that is gradually gaining momentum is transport connectivity. In a global context where traditional supply chains are frequently impacted by geopolitical events and conflicts, the role of transit states has significantly increased. Azerbaijan is focusing precisely on this niche.

Ilham Aliyev noted that the country is investing heavily in developing the East-West corridor, which is currently experiencing unprecedented demand due to disruptions in traditional supply chains and challenges with logistics and transit. "Azerbaijan ensures safe and reliable transit from east to west and back, as well as north to south and south to north. We are strategically located at the intersection of both corridors. Large-scale infrastructure investments in recent years have enabled us to create a significant asset that is required by many countries," added the president.

For the Czech Republic, which is strategically located at Europe's market centre, connecting to such infrastructure will create new trade opportunities from Asia and the Caucasus. This has led to a significant increase in interest from Czech transport companies. The prime minister specifically promoted Škoda Transportation and other firms operating in railway technology, rolling stock, and intelligent infrastructure. He expressed his hope that Czech companies would be successful in projects related to Baku's metro system.

The discussion on aviation cooperation was equally symbolic, covering topics from cargo transportation to the expansion of Karlovy Vary Airport with Azerbaijani capital involvement. According to Babis, this could contribute to the development of tourism between the two countries.

The Gabala meeting demonstrated that Azerbaijani-Czech relations are reaching a new level. If the plans currently under discussion are realised, Baku and Prague could form one of the most pragmatic partnership models between the EU and the Caspian region.