Armenian economists consider gasoline supplies from Baku insufficient to produce a real economic effect.

Direct imports of Azerbaijani petroleum products to Armenia have led to lower gasoline prices at gas stations, due to lower transportation costs than when delivering fuel from Russia, but the volumes of gasoline supplied by Azerbaijan are still insignificant. The deliveries can be seen primarily as a political gesture in the context of a peace settlement.

As reported by the "Caucasian Knot," in early November 2025, a shipment of Russian grain arrived in Armenia via Azerbaijan for the first time since the 1990s. The Armenian government noted that this fulfilled one of the agreements reached in the United States, which contributed to the strengthening of peace between Yerevan and Baku. This occurred because Azerbaijan lifted restrictions on the transit of goods to Armenia. On December 18, 2025, the State Oil Company of the Azerbaijan Republic delivered its first shipment of locally produced petroleum to Armenia. 1,220 tons of AI-95 gasoline were delivered. On January 9, Azerbaijan sent a second shipment of 1,742 tons of gasoline and 946 tons of diesel fuel. Facebook* users considered the trade an indicator of normalizing relations between Baku and Yerevan. Meanwhile, amid the shortage in Armenia, the price of liquefied natural gas has risen significantly, forcing many drivers to switch to gasoline. They believe that in this way the authorities are trying to force them to buy gasoline supplied from Azerbaijan.

In its current form, the agreement looks primarily like a political gesture, and not as an attempt to build a sustainable and mutually beneficial model of cooperation, says political science doctor and professor Vahe Davtyan.

18:04 14.01.2026

TRIPP Implementation Framework Defines Powers and Benefits for Armenia and the United States

Under the TRIPP project, Armenia will receive a 26% stake, and the United States a 74% stake, in the management company TRIPP Development, according to the framework presented in Washington. The document is merely interim and does not impose obligations, but it does provide an idea of the project model, analysts noted.

"For bilateral economic ties to be truly effective, especially in the absence of a peace treaty, it would be logical to simultaneously pursue the goal of exports from Armenia to Azerbaijan. However, the authorities have not declared such goals and are not institutionally developing them. The result is an asymmetrical structure that can be interpreted as an attempt at economic expansion and the gradual displacement of Russian capital from the Armenian energy market. Statements of readiness to import Azerbaijani gas, as well as the recently approved TRIPP, which potentially opens the way for Armenia to connect to the Jabrayil-Nakhichevan energy hub, fit into this logical framework. "The economic calculation here is clearly subordinated to a broader political logic," he told a "Caucasian Knot" correspondent.

Even tiny import volumes have become a trigger for lower gasoline prices

In his opinion, despite the symbolism of gasoline supplies from Azerbaijan, their market effect has been noticeable.

"Even tiny import volumes have become a trigger for lower gasoline prices: the market reacted not only for those operators who worked with Azerbaijani fuel, but also for other gas stations. This is important, since it confirms the presence of an internal price "reserve" in the system. However, relying on Azerbaijani gasoline as a tool for long-term price reduction is inadvisable. Structurally, the Armenian market still relies on Russian supplies: In 2024, Russia accounted for 61.2% of oil product imports, and approximately 230,000 tons of motor gasoline were supplied within the indicative balance. Against this backdrop, the Azerbaijani route can only play a supporting, psychological role,” he noted.

At the same time, as Davtyan notes, the trade link is somewhat vulnerable.

“The vulnerability of this trade link is due not only to foreign policy factors, but also to Azerbaijan’s limited production capacity. The Baku Oil Refinery, which was commissioned back in 1976, is regularly shut down for repairs, and AI-95 production is fragmented. In 2025, AI-95 production decreased by more than 45%, and this fuel is not included in Azerbaijan’s 2026 budget. Against this backdrop, it’s difficult to talk about a reliable and scalable source of supply.” "It's not necessary. Any possible pressure—including from Moscow, given the deep integration of the Armenian and Russian economies—could quickly make this channel unprofitable or purely nominal," he pointed out.

As for logistics, it finally cements the political nature of the supplies.

"The first batch transited Georgia without applying transit tariffs, which temporarily allowed us to maintain price competitiveness. However, the second shipment, as announced, involves full tariff imposition. This automatically increases costs and reduces the price advantages of Azerbaijani gasoline," Vahe Davtyan concluded.

The political component is more important because all of this is perceived in the context of conflict resolution.

This deal is both a political gesture and an economically justified step, believes political scientist and former member of the Armenian parliament Mikael Zolyan.

“I think there is no contradiction here. This is an economically justified step and a political gesture. But, perhaps, the political component is still more important, because all this is perceived in the context of conflict resolution. This is an important symbolic step that helps build trust between the parties and demonstrate the sincerity and intentions of both sides. I think this is still primary. But there is also economic sense, because in any case, Armenia has very limited opportunities to acquire energy resources, so having an additional source is in any case useful. As for Azerbaijan, it’s difficult for me to say how economically justified this is for them, but I think it is also justified to some extent,” he told a “Caucasian Knot” correspondent.

In his opinion, Armenia's ability to import fuel from Azerbaijan, albeit in minimal quantities, changes Yerevan's negotiating position in its dialogue with Russian energy companies.

"Until now, it was what's called a seller's market, meaning the buyer didn't have many alternatives. Now there will be an alternative, perhaps not the most profitable, but at least something. Therefore, I think this will allow for greater flexibility in relations with traditional suppliers. Moreover, Russia joined the process of supplying other products when it saw that the project was already underway,” he noted.

According to him, transit through Georgia is most likely temporary.

“If we proceed purely from Georgia’s interests, then, of course, it will be beneficial for them to ask for such a normal price for transit, but if this price is too high, then the question arises of whether this process can simply take place without going through Georgia. These deliveries can take place directly from Azerbaijan to Armenia. Of course, there are some technical issues that will need to be resolved, but by and large, this is currently being hindered by a simple lack of trust between the parties and the absence of a final peace treaty. But, most likely, this treaty will be signed sooner or later, and perhaps even within this year. And then Georgia will simply lose all ability to influence. Therefore, I think, based on Georgia’s own interests, it would be more rational to offer such an acceptable price for “So that Armenia and Azerbaijan do not have an additional incentive to work on direct transportation,” he pointed out.

This deal is not just a political gesture, believes economist Suren Parsyan.

“Armenia imports about 80 percent of its energy resources. For example, in the case of liquefied gas, imports make up 100 percent. Armenia mainly imports gasoline and diesel fuel from Russia, with minor imports from Romania, Georgia, and Iran. Armenia needs 460,000 tons of fuel per year, and Armenia purchases most of it from Russia. Moreover, at domestic Russian prices, according to a bilateral interstate agreement. But despite the fairly good price, Russian gasoline and diesel reaches Armenia and becomes quite expensive due to transportation costs. Armenia pays $0.50 per kilometer for the transit of 1 ton. It is very important for Armenia to find "We need to develop new markets, increase the security of our economy, and minimize external economic risks. In this regard, Armenia needs to diversify its energy fuel supplies by cooperating with other countries," he told a "Caucasian Knot" correspondent.

With these deliveries, Baku and Yerevan are demonstrating that they are actively cooperating.

However, at this stage, Armenia's ability to import fuel from Azerbaijan does not change the overall picture, he notes.

"Gasoline supplies from Azerbaijan cannot yet affect the overall picture, but if the cooperation is long-term, then there will be an effect. Imports from Azerbaijan have their advantages, as they reduce transportation costs compared to supplies from Russia. This affects pricing. Furthermore, with these deliveries, Baku and Yerevan are demonstrating that they are actively cooperating. This also has political significance. Since there are certain accusations in society against the authorities in the context of the loss of Artsakh (the self-designation of Nagorno-Karabakh - ed. "Caucasian Knot"), they now want to show what economic benefits Yerevan will receive from cooperation with Baku," the economist explained.

Parsyan believes it is unlikely that trade turnover between Armenia and Azerbaijan will increase sharply in the near future.

"There are still many unresolved issues between the countries. But the parties are taking steps in this direction. For example, Armenia is trying to export some products to Azerbaijan, but there is no interest yet and the issue is still under discussion. It is also interesting that gasoline from Baku is imported by a company with a very small share of the Armenian fuel market. And this could be an attempt to redistribute this market, since this company is associated with the authorities," he noted.

However, energy fuel supplies could increase sharply if rail service between Baku and Yerevan is launched.

"In this case, transportation costs will also be reduced. Russian companies will also be able to use this connection and reduce the number of deliveries via Georgia. Thus, Armenia could become an alternative to Georgia. Overall, long-term cooperation is possible if there is peace and security guarantees in the region," he concluded.