By Natalia Konarzewska 

June 16, 2020, the CACI Analyst

The collapse of oil prices and oil demand along with the economic shutdown imposed to fight the coronavirus pandemic are putting a strain on Azerbaijan’s economy. The upheaval on the global oil market has exposed fragilities in Azerbaijan’s banking system as four of its banks were recently put under temporary administration of the central bank and others had their capital requirements relaxed. The government has introduced economic and social packages to mitigate the consequences of the crisis; however, growth forecasts in 2020 remain pessimistic.

By Azad Garibov

May 12, 2020, the CACI Analyst

The collapse of oil prices and outbreak of a pandemic seems to catch Central Asia in an economic perfect storm. Some regional energy exporters will suffer directly from low oil prices and the pandemic; others will face adverse economic consequences more indirectly, in the form of reduced gas demand in China or decreased remittances sent by migrant workers.

By Natalia Konarzewska

July 31, 2017, the CACI Analyst

In late May, the member states of the Organization of the Petroleum Exporting Countries (OPEC) and several crude producers outside the cartel decided to extend the cuts in oil production by another nine months. This is a follow-up of agreement on the oil production freeze, introduced in November last year by major OPEC crude producers and several countries outside the organization to stabilize the plummeting oil prices and rebalance supply and demand in the crude market. Azerbaijan, which is not an OPEC member, decided to join the freeze deal and its May extension to break this downward spiral and mitigate the negative effects of the oil price on its budget revenues.

By Nurzhan Zhambekov (04/01/2015 issue of the CACI Analyst)

Azerbaijan and Kazakhstan face a tough year as oil prices plummet. A dramatic shift has occurred in the international oil market in recent months as oil supply has gone up, particularly with the U.S. oil production increase, and demand has weakened with the economic slowdown in China and the EU. Saudi Arabia, the world’s second largest oil producer, did not reduce its oil production despite the oil price decline, indicating that it would like to maintain its international oil market share. The precipitous decline in oil prices has resulted in a sharp fall in export revenues for Azerbaijan and Kazakhstan, the third and second largest oil producers respectively in the former-Soviet Union after Russia. This dramatic price drop has put the two countries’ currencies under severe pressure.