Germany Strengthens Ties with Azerbaijan Amid Shifting Regional Geopolitics German Chancellor Friedrich Merz and Azerbaijani President Ilham Aliyev have entered into several economic agreements designed to expand Berlin’s access to Azerbaijani gas reserves and transit infrastructure. This partnership comes as Germany seeks to diversify its energy sources and as Azerbaijan navigates a complex landscape involving a more European-aligned Armenia and a stabilizing relationship with Moscow.

Aliyev’s visit to Berlin resulted in a Joint Declaration on the Strategic Agenda for Bilateral Partners and the establishment of an Azerbaijan-Germany Business Council.

“I am confident that the documents signed today will elevate our relations to a new level,” Aliyev stated during a joint press conference on Tuesday, noting that a strategic dialogue has been initiated and highlighting Germany’s growing influence in the South Caucasus as a leading European Union nation.

Berlin’s interests are primarily economic. Aliyev noted that Azerbaijan began gas shipments to Germany this year, supporting the EU’s transition away from Russian energy. Merz characterized the South Caucasus as “a key connectivity hub linking Europe and Asia,” referring to the Middle Corridor trade route that connects the Caspian and Black seas while bypassing Russia.

Reconciliation Efforts

The discussions also addressed relations with Armenia, as Azerbaijan undergoes a slow reconciliation process following decades of intense conflict.

Merz offered congratulations to Aliyev on the initialing of the peace agreement with Armenia, describing it as a “historic agreement” that provides a “new opportunity to permanently overcome the long-standing conflict.”

However, the text, which was initialled at a White House ceremony last August, still requires specific constitutional amendments in Armenia, a condition demanded by Baku before a final signature can be reached.

“Azerbaijan offered peace to Armenia and received a positive response,” Aliyev remarked, citing the German government’s role as an intermediary. He also noted that over 40,000 tonnes of transit cargo has already crossed Azerbaijan to Armenia, with Azerbaijani fuel products contributing to Armenian energy security.

Berlin appears to be maintaining a neutral stance. Last March, President Steinmeier visited Baku following a two-day trip to Armenia, where he urged both nations to find the “courage to compromise.”

France, conversely, has moved closer to Yerevan, supplying the Armenian military with 36 Caesar howitzers, along with various radars and armored vehicles.

Armored vehicles of the Armenian army equipped with CAESAR artillery system take part in a military parade on Armenia’s Republic Day, in Yerevan on May 28, 2026. AFP – KAREN MINASYAN

Meanwhile, Armenia has frozen its membership in the Russian-led CSTO alliance, with Prime Minister Nikol Pashinyan ruling out a return to active participation. The Armenian parliament voted in February 2025 to begin the country’s accession process to the EU.

Azerbaijan-Russia Relations

Baku is taking a different path. Relations with Moscow deteriorated after Russian air defenses struck an Azerbaijan Airlines jet on December 25, 2024, resulting in 38 fatalities during a crash in Kazakhstan.

However, on July 17, foreign ministers Jeyhun Bayramov and Sergey Lavrov declared that relations had been “fully normalized” following talks in Moscow. With direct flights set to resume and bilateral trade reaching $4.9 billion in 2025, the geopolitical landscape of the region remains highly fluid and competitive.

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