SBI Markets: Azerbaijan's investment climate is positive - INTERVIEW
Baku, February 7, AZERTAC
The Azerbaijan State News Agency (AZERTAC) presents an exclusive interview with Sam Barden, founder and CEO of SBI Markets, an international trading and management consultancy.
-How do you assess the investment climate in Azerbaijan and what else needs to be done to attract international investors?
- The opportunity for investment is very good here and the laws for foreign investment are clear and fair. Azerbaijan's investment climate as an Emerging Market is positive, and given economically there is a concertation in the oil and gas sector, the government is likely to support any investment which helps drive non-oil and gas sector growth and export opportunities, which of course will help drive returns.
-Mr. Barden, how do you assess the role of Azerbaijan in ensuring Europe's energy security?
-Azerbaijan is Europe's 10th largest supplier of crude oil into Europe. Some 70% of Azerbaijan's oil exports go to Europe, with the remaining 30% going to Asia. However, Azerbaijan is Italy's largest supplier of crude oil, and Italy is the EU's 3rd largest importer of crude oil. So, for Italy Azerbaijan is important.
-What are your forecasts for oil prices in Azerbaijan in 2025?
-Azerbaijan's oil prices will reflect that of World oil process. There is currently no shortage of oil supply into the global markets, however there is delivery risk and sanctions which distort oil market price, efficiency and delivery. This and the threat of an escalation of war in Ukraine or the Middle East, specifically Israel and Iran, are the real factors which will affect oil process in 2025. Oil prices have been steady in the $70 dollar range for quite some time, and are only now moving higher ahead of President Trump’s inauguration, as uncertainty around his policies, in particular the Middle East, mean speculators are pushing prices higher in the short term. Assuming President Trump is able to stop the wars in Ukraine and Israel or at least not escalate them, oil process are likely to average around $75 dollars per barrel in 2025.
- What economic successes has Azerbaijan achieved in 2024 in your opinion?
-Azerbaijan has recorded over 4% growth in 2024. It is a fact. In my opinion, what is impressive about this is that it was driven by no oil and gas sector growth. Government spending and investment has also helped drive economic growth.
- What is the place of cryptocurrency in the economy of Azerbaijan?
-Azerbaijan's banking sector remains small. Azerbaijan's cryptocurrency penetration also remains low. I think crypto currency in Azerbaijan will track that of others in the region. No doubt, digital currency markets in the coming years will evolve further.
-How can the development of renewable energy sources affect the economy of Azerbaijan and its position on the international arena?
- The potential for renewable energy development in Azerbaijan remains high. As Azerbaijan increases its renewable energy generation for internal use it will mean there will be more gas for export. This will help grow Azerbaijan's export economy further, while at the same time provide low carbon electricity internally via renewable generation. Azerbaijan’s successful hosting of the COP29 in November 2024 is another important step in this regard.
-Which sectors of the economy can become the main growth drivers for Azerbaijan in the context of the transition to sustainable energy?
-The main generation forms of renewable energy for Azerbaijan appear to be Solar and Wind. Azerbaijan has ambition to use solar to produce hydrogen, commonly referred to as Green Hydrogen. This is likely to be their main sector driving the green transition.
-How do you assess the current position of Azerbaijan in the context of the global economy?
- Geographically, and strategically, Azerbaijan is very important in the region, as they remain a large supplier of oil to Israel. In terms of the global economy, Azerbaijan could adopt a "Peace through Trade" approach and positively influence some of its neighbors and customers towards economic engagement.
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