Energy
EIA Sees Azerbaijan Oil Output at 550,000 bpd in 2026, Sliding to 520,000 in 2027
July 28, 2026
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The U.S. Energy Information Administration (EIA) expects Azerbaijan to pump an average of 550,000 barrels per day (bpd) of crude oil and other liquid hydrocarbons in 2026, before output eases further to 520,000 bpd in 2027. The multi-year projection points to a steady, managed decline for one of the Caspian region's most established oil producers, extending a downward trajectory that has defined Azerbaijani crude for much of the past decade.
The forecast matters because oil remains a cornerstone of Azerbaijan's public finances, export earnings and sovereign savings, even as Baku pivots harder toward natural gas and renewables. The country produced roughly 570,000 bpd of liquid hydrocarbons in 2025, meaning the 2026 figure marks a continued year-on-year contraction rather than a fresh shock. The EIA left both its 2026 and 2027 estimates unchanged from earlier projections, signalling that the trend is now viewed as structural rather than cyclical.
The agency attributes the slide to the natural depletion of Azerbaijan's mature offshore fields in the Caspian Sea. The country's flagship Azeri-Chirag-Gunashli (ACG) complex, which for years anchored national output and feeds the Baku-Tbilisi-Ceyhan (BTC) export pipeline, has passed its production peak, and enhanced-recovery investment has slowed the decline without reversing it. As Azernews reported, the EIA describes a gradual downward trend in output over the coming years driven by ageing reservoirs rather than any single operational setback.
For investors and Azerbaijan's fiscal planners, the numbers carry clear implications. Lower crude volumes tighten the link between the state budget and oil prices, leaving Baku more exposed to swings in benchmark values and to OPEC+ policy on quotas. Falling barrels also reduce throughput available for the BTC line, even as SOCAR has taken on a larger operating role in the country's export infrastructure. At the same time, Azerbaijan's substantial buffers, including the SOFAZ sovereign wealth fund and sizeable strategic reserves, give it room to absorb the transition without immediate fiscal strain, according to figures published by the country's U.S. Energy Information Administration and Azerbaijani institutions.
The oil outlook underscores why Baku has leaned into gas. Rising Caspian gas volumes and expanding exports through the Southern Gas Corridor are increasingly the engine of Azerbaijan's energy relationship with Europe, offsetting some of the revenue pressure from declining crude. A parallel push into renewables, with a target of 6 GW of green capacity by 2030, rounds out a strategy designed to keep Azerbaijan relevant to European buyers even as its legacy oil base thins.
Looking ahead, the EIA's 520,000 bpd figure for 2027 sets a marker for how quickly the decline is expected to unfold, roughly a 9 percent drop over two years from the 2025 level. Whether Azerbaijan can slow the fall will depend on continued recovery investment at ACG and other offshore assets, and on the pace at which gas and clean power fill the gap. For now, the forecast confirms that Azerbaijan's oil story is one of gradual, deliberate maturity rather than abrupt decline, and that its economic future is being written increasingly in gas and electrons rather than barrels.
