Azerbaijan entered 2026 with a state budget built around an average oil price assumption of $65 per barrel. That figure, set below the $70 assumption used for 2025, reflects a prudent approach to a commodity market where prices can change sharply under the influence of global supply, demand and geopolitical developments. Yet the oil market has moved considerably above that budget benchmark, creating a favorable environment for Azerbaijan’s public finances.

The significance of the $65 assumption becomes particularly clear against the latest oil-market outlook. The U.S. Energy Information Administration now expects Brent crude to average around $85 per barrel in the third quarter of 2026, while its broader annual forecast has also been raised significantly. The EIA attributes the higher outlook to disruptions affecting oil production and shipments in the Middle East, including reduced flows through the Strait of Hormuz.

For Azerbaijan, this creates an important financial cushion. The state budget was designed on the basis of a considerably lower oil price, meaning that an extended period of prices above $65 provides a stronger external environment than the one assumed during budget planning. Azerbaijan’s 2026 budget materials projected state revenues at AZN 38.423 billion, equivalent to 28.6% of GDP, using the $65 oil-price........

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