Who will lose more from the trade shutdown: Moscow or Baku: experts assess the risks

The first victims of interstate political conflicts have always been trade, economic and business ties. Baku is freezing cooperation with Moscow in the economic sphere and has refused to negotiate a number of major agreements, said Azerbaijani MP Rasim Musabekov. Observers are asking the question: who will suffer more losses in this force majeure situation, brought to the point of absurdity, and end up the main loser - Russia or its southern neighbor?

It is clear that in terms of export potential, based on bare macroeconomic figures, the two countries are in different weight categories. According to the UN Comrade platform, in 2024, Azerbaijan sold goods abroad for $26.6 billion, of which almost $1.2 billion (4.4%) were supplies to the Russian Federation. While the total volume of Russian exports amounted to $433.1 billion, of which Azerbaijan accounted for $3.6 billion (0.8%).

However, there are other evaluation criteria that are poorly consistent with the well-known thesis "while the fat one is drying out, the thin one will die". There can be no winners a priori: the conflict will hit everyone involved hard. With varying degrees of final damage, but it will hit. The situation is regrettable, since bilateral trade and economic relations have only strengthened in recent years. Trade turnover between Russia and Azerbaijan increased by 25% in the first five months of 2025 - to $2.16 billion, according to data from the State Customs Committee of the Republic of Azerbaijan.

Moreover, exports from the Russian Federation (mainly mineral fuels, metals, precious stones, fertilizers) were almost four times higher than imports - $1.7 billion versus $446 million. Azerbaijan supplies Russia primarily with agricultural products - fruits, vegetables and nuts. Plastics and plastic products are also among the top three.

"The political crisis between Moscow and Baku may indeed affect a number of bilateral projects, but it is unlikely to lead to a complete severance of trade ties," says Igor Rastorguev, leading analyst at Amarkets. "Rather, we are talking about tactical pressure from Azerbaijan in order to achieve certain political or infrastructural decisions that are beneficial to it (in particular, in matters of transport corridors, including Zangezur). Economic cooperation between the two countries is traditionally built around energy, transit logistics and agricultural supplies. One of the key elements of this link is Azerbaijan's purchase of Russian Urals oil for domestic consumption."

In 2024, the volume of such deliveries amounted to 1.53 million tons. This allows Baku to export its more expensive premium grade Azeri Light, earning on the price difference. This scheme is beneficial to it, since it brings direct profit. Accordingly, Rastorguev argues, today Azerbaijan is not interested in stopping trade with the Russian Federation. Moreover, it directly benefits from access to Russian raw material flows, including oil and grain. However, in the political context, Azerbaijan, which has become stronger after military successes in Karabakh and has strengthened relations with Turkey and the West, wants to demonstrate subjectivity and independence, including in dialogue with Moscow.

"The situation is hot, it is difficult to predict the consequences," says Nikita Maslennikov, a leading expert at the Center for Political Technologies. "There is hope that sooner or later the conflict will be resolved one way or another. Most experts see more risks for Azerbaijan, primarily for the agricultural and food sector. The country's share of the Russian fresh tomato market is 30-35%, and its loss is fraught with an overabundance of this product in Azerbaijan itself. It is unlikely that it will be possible to quickly find alternative buyers: the closest neighbors Iran and Turkey are well supplied with vegetables and fruits, and the EU countries have very high quality requirements, and logistics there are more expensive. When Russia is a proven sales market nearby, everything is much simpler and clearer."

The breakdown of trade relations could lead to price hikes and an increase in inflation in both countries by at least 1.5-2 percentage points. Russian retail chains will not receive enough seasonal tomatoes, berries, and nuts. Now Azerbaijani cherries cost from 500 to 700 rubles, but at least they are available in stores, MK's source says. The same story is with later, autumn fruits: almost all of our persimmons are from Azerbaijan, and if they disappear from the shelves, we will have to look for alternatives that may be more expensive and of worse quality. For Russia, these are obvious inflation risks, including additional costs for restructuring supply lines. And for small and medium-sized businesses, even short-term disruptions lead to reduced income and breach of contracts.

"There is also uncertainty about the future of our investments: Russia has invested $4 billion in the oil industry of Azerbaijan, and another $1.2 billion in other sectors in the republic," Maslennikov sums up. "And what next? Can we count on these projects not being curtailed and the money not being lost?"