Azerbaijan’s relationship with Germany is shifting beyond energy, with the two countries deepening ties across industry and logistics as Europe works to diversify its supply chains away from Russia.
“Azerbaijan is gradually ceasing to be perceived by Germany solely as an energy supplier and is increasingly becoming part of a new Eurasian industrial and logistics architecture,” said Orkhan Yolchuyev, director of the CASPIA Analytical Center.
Bilateral trade between the two countries reached around €1.7 billion in 2025, driven by German exports of industrial equipment, machinery and transport systems, Yolchuyev said.
Over 250 German companies now operate in Azerbaijan, spanning manufacturing, construction, logistics and energy.
The shift has accelerated since Azerbaijan began supplying gas directly to Germany and Austria in early 2026, part of a wider European push to reduce dependence on Russian energy following Moscow’s full-scale invasion of Ukraine.
Beyond energy
The real change, Yolchuyev said, is not in the trade figures but in what they represent.
“[They] indicate that bilateral relations are evolving toward a higher level of industrial cooperation,” he said, pointing to Germany’s need for new export markets and more resilient supply networks.
German companies already active in Azerbaijan could soon be drawn into its reconstruction programmes and expanding industrial zones, particularly in engineering, transport, renewable energy and advanced manufacturing.
Much of this shift runs through the Middle Corridor, the transport route linking China and Central Asia with Europe via the Caspian Sea, Azerbaijan, Georgia and Turkey.
Russia’s war in Ukraine has given the route new urgency, as European firms hunt for alternatives that insulate their supply chains from disruption.
Azerbaijan sits at its logistical centre, with sea and rail links increasingly central to the transcontinental route.
Yolchuyev said the corridor’s value lies less in cargo volumes than in what it carries.
“The higher the share of high value-added products, such as automotive components, industrial machinery, electrical equipment, electronics or chemical products, the greater the economic efficiency of the route,” he said, pointing to the expansion of the Port of Baku and the Alat Free Economic Zone as drivers of new manufacturing and logistics investment.
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