Standing Up To Moscow

January 2007 | Risk Summary

Like Georgia, Azerbaijan's relations with Russia have taken a turn for the worse, after the latter proposed both cutting its gas supplies by two thirds and doubling the price to US$230 per 1,000 cubic metres. President Ilham Aliev was particularly annoyed by the move as rival Armenia has negotiated a deal to keep gas prices a US$110 per 1,000 cm. However, with domestic gas and oil production able to cover demand, there will be no energy crisis in Azerbaijan, and Aliev will suffer no political fallout as a result.

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