Aliyev's Berlin visit cements Germany's new energy pivot to the South Caucasus

    Azerbaijan's President Ilham Aliyev has wrapped up a landmark first state visit to Berlin, sealing a formal strategic partnership with Germany built around a single overriding priority: European energy security amid cascading global supply risks. The one-day summit with Chancellor Friedrich Merz delivered binding accords on gas expansion, cross-continental trade corridors and joint green energy work, even as the alliance carries clear political and ethical trade-offs for Berlin.

    The backdrop to Tuesday's talks could hardly be more urgent. Six years on from Germany's abrupt exit from Russian pipeline gas, industrial heavyweights across the country continue to grapple with elevated fuel costs. Fresh tensions in the Middle East have disrupted LNG shipping lanes through the Strait of Hormuz, adding new volatility to import markets and pushing Berlin to lock in long-term, pipeline-accessible suppliers. Azerbaijan, fed into the EU grid via the Southern Gas Corridor, stands out as a rare land-linked alternative.

    Since early 2026, Azerbaijani gas has flowed directly to German consumers under a ten-year contract with an initial annual volume of 1.5 billion cubic metres—currently accounting for less than 2% of Germany's total gas demand. At their joint press conference, Aliyev confirmed plans to ramp up deliveries to 2 billion cubic metres annually by 2027, while offering extra oil exports through state energy firm SOCAR's trading arm. Merz welcomed the commitment, describing the Southern Gas Corridor as a “stable, predictable supply backbone” for Germany's industrial heartlands.

    Yet scaling up flows faces a critical bottleneck. The Trans-Anatolian and Trans-Adriatic pipelines running from the Caspian to southern Europe are already operating at near-full capacity. Any meaningful increase will require costly expansion works, infrastructure interconnections and state-backed investment funding—an ask Aliyev pressed firmly on German officials. The Azerbaijani leader called on European investment banks to reverse a 2019 ban on fossil fuel project financing, arguing the continent's near-term security needs must balance long-term climate goals.

    Beyond hydrocarbons, the new strategic declaration widens bilateral cooperation far beyond energy. The two sides formalised joint work on the Middle Corridor, a multimodal transport network spanning the Caspian Sea, Caucasus and Central Asia that Germany views as a resilient alternative to Russian overland trade routes with Asia. A bilateral business forum running parallel to the talks struck deals covering manufacturing, hydrogen technology and agricultural tech transfers, lifting total two-way trade—worth €1.7 billion in 2025—onto a steeper growth trajectory. Regional diplomacy also featured prominently: Merz praised the landmark peace accord between Azerbaijan and Armenia, framing stable South Caucasus ties as a prerequisite for reliable energy transit, while both leaders aligned on the need to end Russia's war in Ukraine and sustain Western support for Kyiv.

    For Berlin, the deepening partnership brings tangible economic gains, but it carries persistent political friction. German civil society and opposition politicians have voiced unease over aligning closely with Aliyev's administration, citing international criticism over Baku's 2023 military takeover of Nagorno-Karabakh and concerns over domestic governance standards. Unlike Italy—Azerbaijan's first European strategic partner—Germany faces louder domestic scrutiny over prioritising energy access over human rights benchmarks. Merz acknowledged this tension in brief remarks, arguing pragmatic energy diversification was vital to shield German jobs, while pressing Aliyev to advance reconciliation with Armenia and uphold European normative standards.

    Geopolitically, the summit marks a clear shift in EU strategic positioning. For decades, the bloc treated the South Caucasus as a peripheral border region; today, Germany—the EU's economic engine—is embedding Azerbaijan into its core energy and Eurasian supply chain architecture. Moscow's influence across the corridor is set to weaken further as Berlin pours political and commercial capital into Baku, while Azerbaijan gains greater leverage to balance its ties with Russia, Turkey and the West simultaneously.

    Analysts note the agreement is not a temporary crisis fix, but a decades-long framework. Joint cooperation on green hydrogen and renewable energy is written into the strategic agenda, allowing both sides to frame the alliance as compatible with Europe's net-zero transition, even as fossil gas remains its immediate foundation.

    As Aliyev departed Berlin, the joint declaration left little room for ambiguity: Germany will accelerate investments to unlock larger Azerbaijani energy exports, while Baku positions itself as Europe's indispensable Caspian gateway. The trade-off—energy security in exchange for closer engagement with a controversial regional power—will define Germany's Eurasian policy for years to come.

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