On the world market, each barrel of Azerbaijani oil is offered at more than 100 dollars. Can the rise in oil prices allow for more allocations from the budget?
In the 2026 state budget, the price of one barrel of oil is set at 65 dollars. Naturally, the annual average price cannot be compared with prices over several days, weeks, or even months. We are talking about the annual average price. Nevertheless, according to calculations by "Statista," the average price of one barrel of "Brent" oil was 62.54 dollars in January of this year, and 66.6 dollars in February. FRED reported the average prices as 66.6 and 70.8 dollars, respectively.
As seen, in the first month of 2026, the world market price differed only slightly from what was planned in the budget. In the first week of this month, the price of oil fluctuated in the range of 84-90 dollars.
For the year 2026, it is expected that 43 percent, or 16.4 billion manat, of Azerbaijan’s state budget revenues will come from the oil and gas sector. Of this, 12.8 billion manat are transfers from the State Oil Fund. As can be seen, the increase in the world market price of oil will directly affect 3.6 billion manat of budget revenues. Indirect effects are noted for non-oil revenues. Since the transfers from the Fund are paid out of its own revenues, there is no direct connection between the price of oil and that amount. However, high prices will lead to increases in the revenues of the Oil Fund as well as in foreign exchange reserves. Therefore, if the average annual price is high, more funds will enter the budget from the oil and gas sector.
It is clear that an increase in state budget revenues allows for more funds to be allocated to priority areas such as national security, restoration of our liberated territories, and strengthening social protection. More income means more fiscal spending. This also strengthens financial support for the development of the non-oil and gas sector.
Naturally, Azerbaijan is interested in a more stable price balance on the world market. In any case, for energy countries, high oil prices mean more foreign currency revenue.
Vuqar Bayramov,
economist, member of parliament