Editor’s Note: Fuad Shahbazov is an Azerbaijan-based policy analyst and specializes in regional security issues in South Caucasus and the wider Middle East. He has previously contributed to Stimson’s Middle East Perspective about these topics and has expertise on Turkey’s strategic affairs and the resurgence of ISIS.
By Barbara Slavin, Distinguished Fellow, Middle East Perspectives
Azerbaijan and Israel, which have long cultivated close ties in defense and intelligence, are strengthening cooperation in the energy field.
Last October, Azerbaijan’s State Oil Company (SOCAR) acquired a 10 percent stake in Israel’s Tamar gas field as part of the company’s Mediterranean upstream strategy. The investment, SOCAR’s first direct upstream venture in the Mediterranean, signals Azerbaijan’s intent to deepen its economic and geopolitical footprint in the Middle East while reinforcing its strategic alliance with Israel. SOCAR’s expansion into the Mediterranean basin intensifies Azerbaijan’s soft power and opens the prospect of additional gas exports to southeastern Europe. SOCAR reportedly bought the stake from Union Energy, which is operated by Chevron.
Israel’s Tamar is a critically important offshore field that supplies about 70 percent of Israel’s energy for electricity generation. The October agreement marked SOCAR’s first direct investment in the Israeli energy market, although the company had been involved in exploring the field since 2023.
Azerbaijan’s acquisition comes in the context of U.S. efforts to stabilize the Middle East by prolonging cease-fires in Gaza and Lebanon and bolstering Israeli security. One component of this strategy is encouraging strategic investments, particularly in the energy sector. SOCAR’s expansion into Israeli energy assets can be interpreted as a strategic move to strengthen Azerbaijan’s regional leverage and deepen its alignment with U.S. and Israeli interests.
Over the last three years, Azerbaijan has boosted ties with Israel despite Israel’s military operations in Gaza following the October 7, 2023 Hamas attack and frequent criticism from neighboring Turkey and Iran. While Turkey is a long-term ally of Azerbaijan, there are several reasons for Baku’s refusal to side with Ankara regarding the Gaza war, most importantly, Turkey’s staunch support of Hamas, which has been backed by Iran, a regional rival of Azerbaijan.
From 2021 to 2024, Azerbaijan and Iran witnessed their most significant diplomatic confrontation since the 1990s over Azerbaijani ties to Israel and Iran’s strategic partnership with Baku’s main opponent, Armenia. Armenia and Azerbaijan have fought several wars over territorial disputes since their independence following the breakup of the Soviet Union. Iran has taken Armenia’s side in those disputes and built a strong economic relationship with its small neighbor. Trade between Armenia and Iran has seen a significant upsurge in recent years, with bilateral trade surpassing $700 million in 2022 and approaching the $1 billion mark in 2024.
In January 2023, Azerbaijan closed its embassy in Tehran after an armed attacker broke into the building, killed the mission’s chief of security and wounded two others. The embassy reopened in the summer of 2024, but relations have remained tense. Azerbaijan pointedly dispatched presidential top advisor Hikmat Hajiyev to Israel in December 2024 to meet his Israeli counterpart Isaac Herzog and other officials, highlighting the high strategic level of their bilateral ties. While backstage diplomacy remained active, Azerbaijani top officials had refrained from public meetings with Israeli officials due to public outrage over the Gaza war’s high civilian death toll. Shortly after a cease-fire between Israel and Hamas went into effect in January, however, Hajiyev again visited Israel and met with Prime Minister Benjamin Netanyahu.
The recent agreement on the Tamar field in the Mediterranean basin will have mid-term and long-term impacts on the Azerbaijan-Israel partnership, enabling the former to make new inroads into the region and explore new markets, such as oil-rich but politically divided Libya. SOCAR has been a major instrument of Azerbaijani soft power since the early 2000s through strategic investments in Turkey, the Balkans, Eastern Europe, and Central Asia as well as Israel.
Azerbaijan has achieved this progress while stabilizing relations with Iran and maintaining ties with Turkey, the country’s main supporter in regional initiatives and military reforms.
Nevertheless, SOCAR’s recent agreement is clearly in the interest of Israel and its Western allies and may signal growing momentum for Azerbaijan to join the Abraham Accords, the 2020 agreement under which Israel normalized relations with four Arab states. At the same time, Azerbaijan’s security partnership with Israel is likely to intensify, particularly in intelligence-sharing and defense cooperation. This could bolster ties to the U.S. as well, given the Trump administration’s firm position on Iran and its nuclear program. Should the U.S. decide to back an Israeli strike on Iran’s nuclear infrastructure, Azerbaijan might play a facilitating role.
Fuad Shahbazov is a policy analyst covering regional security issues in the South Caucasus and a former research fellow at the Center for Strategic Studies and senior analyst at the Center for Strategic Communications in Azerbaijan. He was also a visiting scholar at the Daniel Morgan School of National Security in Washington, DC. He tweets at @fuadshahbazov.