Azerbaijan Sees Oil Price Cushion Expand Amid Global Disruptions

Azerbaijan's oil price buffer has widened significantly as Brent crude prices have surged above the country's budget benchmark of $65 per barrel. According to a recent analysis, the U.S. Energy Information Administration (EIA) now expects Brent crude to average around $85 per barrel in the third quarter of 2026, with the broader annual forecast also raised significantly.

The EIA attributes the higher outlook to disruptions affecting oil production and shipments in the Middle East, including reduced flows through the Strait of Hormuz. This creates a favorable environment for Azerbaijan's public finances, providing a stronger external backdrop than the one assumed during budget planning.

Azerbaijan's 2026 budget materials projected state revenues at AZN 38.423 billion, equivalent to 28.6% of GDP, using the $65 oil-price assumption. The difference between the budget assumption and current market expectations is therefore more than a statistical curiosity.