Fitch forecasts revenue surge from Azerbaijan's Karabakh field

Azerbaijan's international reserves and State Oil Fund (SOFAZ) assets are projected to reach $74 billion by the end of 2025, equivalent to 98.4% of GDP, Report informs, citing Fitch Ratings.

SOFAZ assets are expected to stabilize at approximately $62 billion (79.3% of GDP) in 2025-2026, based on our projection of average oil prices at $65 per barrel, the agency notes, adding that it anticipates the country's net foreign assets will average 67% of GDP in 2025-2026 – significantly higher than the median values for 'BBB' and 'A' rating categories," the agency notes.

Fitch expects the current account surplus to decrease to 5.3% of GDP in 2025 and 4.9% in 2026 as oil prices stabilize. For comparison, the average surplus between 2021-2024 was 15.6%, whereas the median for 'BBB' category countries was only 0.4%.

Fitch analysts believes that in the medium to long term, additional growth in Azerbaijan's oil exports is possible through the development of the Karabakh oil field and the implementation of onshore shale oil production projects.