MP says oil price drop would have limited impact on 2026 budget

A $10 decrease in the average annual global oil price could directly affect Azerbaijan's state budget revenues by only 250–300 million manats ($147-175.5 million), MP Heydar Asadov said during the first reading of the 2026 state budget bill at today's parliamentary session, Report informs.

He noted that next year's budget revenues from the oil and gas sector are projected at 16.4 billion manats ($9.6 billion), of which 12.8 billion manats ($7.5 billion) will come from the mandatory transfer from the State Oil Fund of Azerbaijan (SOFAZ):

"Regardless of whether oil is sold for $1 or $100, this transfer will be paid into the budget. Therefore, price fluctuations can only impact the remaining 3.6 billion manats ($2.1 billion), which are mostly profit tax revenues from SOCAR and major fields."

Asadov added that a $10 fall in oil prices would result in a loss equal to just 0.6–0.7% of budget expenditures:

"Naturally, this cannot create any budget problems. Oil prices should be discussed not in terms of their direct effect on budget revenues and expenditures, but in the context of their impact on SOFAZ's assets and long-term sustainability."