The conflict around Iran could create additional export and budget revenues for Azerbaijan amid rising energy prices.
“Elchi” reports that this was stated by the international rating agency “Fitch Ratings”.
According to the agency’s assessment, for hydrocarbon exporters located outside the Gulf region – Azerbaijan, Angola, Argentina, Brazil, Colombia, Ecuador, Gabon, Kazakhstan, Nigeria, and Congo – a prolonged period of high energy prices could lead to an increase in export and fiscal revenues.
According to “Fitch”, Azerbaijan has one of the highest shares of fossil fuel exports in GDP among selected developing countries. Specifically, net fossil fuel exports account for 28.8% of GDP.
The agency also states that in 2024, the volume of fossil fuel subsidies in Azerbaijan amounted to approximately 5.5% of GDP.
At the same time, “Fitch” notes that if instability within Iran intensifies, Azerbaijan, Iraq, and Turkey could be affected by a potential refugee influx from Iran.
According to the agency’s base scenario, if the actual closure of the Strait of Hormuz lasts less than a month and the region’s oil infrastructure is not severely damaged, the impact on the credit ratings of developing countries will be limited.