Geoeconomical dynamics among Azerbaijan and Turkic states after 2nd Karabakh war

The 2020 second Karabakh conflict was a decisive event that altered the geopolitics of the region. Although Russia was instrumental in mediating a ceasefire, its failure to bring about a ceasefire right once and its hesitation regarding military forces on the ground served as an urgent reminder of the shifting balance of power in the area. After Second Karabakh War, Azerbaijan position in South Caucasus have strengthened and relations with Turkic states started to develop as a new regional possibility of strong cooperation. Regardless of the fact that new trade routes, such as the Middle Corridor, which connects Europe to China via Central Asia and the South Caucasus, have gained prominence, the economic, political, and commercial ties between nations continue to encourage efforts to expand the capacity of existing routes, such as the Trans-Caspian International Transport Route, or reactivate older corridors, like the Silk Road.

In this framework, OTS countries prioritize energy policies. During the 11th OTS conference in Bishkek in 2024, member states prioritized renewable energy integration and the creation of green corridors.

Azerbaijan, Kazakhstan, and Uzbekistan decided to build a 2,450-kilometer direct current transmission corridor to export green electricity over the Black Sea.

Turkmenistan has promised to strengthen its energy collaboration, giving energy supplies to Azerbaijan and Turkey across the Caspian Sea. Additionally, the energy ministers signed a communiqué supporting the establishment of a Regional Center for Technologies and Green Initiatives. These efforts are aligned with planned initiatives such as the Azerbaijan-Turkey-Europe corridor and successful accomplishment of the COP29 to showcase Central Asia's energy transformation.

These relationships with Turkic states mainly focused on mutual economic development and recognition of authority. In the region of Turkic states, Azerbaijan, geopolitically and physically, located in the center, which makes its existence vital for more than one regional entity.

Moreover, Organization of Turkic States (OTS) are important regarding energy supply of EU, especially after the Russia- Ukraine war. As an example, one of the projects is TRACECA. TRACECA's efforts to simplify transportation and minimize barriers throughout the corridor were highlighted at the Global Gateway Investors Forum in January 2024. The summit contained €10 billion in promises for sustainable transport development, with the European Commission and the European Investment Bank contributing €1.5 billion each. That investment showcases the importance of this initiative for the EU.

TRACECA is an EU initiative designed to lessen dependency on Russia. After Russia- Ukraine war, EU dependency on Russia became more visible through oil- gas issues. By improving highways, sea lanes, and railroads, member nations may reduce travel times and optimize shipping, which promotes economic cooperation.

OTS members are among TRACECA's key stakeholders. As a result, OTS members and TRACECA and other transport routes should collaborate closely together.

Changes in the Black Sea and northern areas could possibly result in EU bound TRACECA routes being diverted through Türkiye, particularly in the aftermath of the ongoing conflict between Russia and Ukraine.

Which also lets central Asian countries export their oil and gas to EU countries. In addition to OTS, natural gas from Iran and Iraq is also included in another study on the security of the EU's energy supply. Nevertheless, the study's conclusion emphasizes Türkiye as the most important nation for the EU's energy supply.

Regarding energy supply, Türkiye is not rich with oil and gas, but its strategic position in the region and world makes energy agreements unsustainable, especially for EU countries. The importance of TRACECA can be also understood through EU energy policy which consists of connected three main pillars: Security of supply, competitiveness, and sustainability.

Energy efficiency is the main goal in that policy to maintain that the EU seeks to improve energy efficiency as well as diversify sources of energy supply. In order to do this, the EU has ratified a number of agreements to boost the amount of natural gas and liquefied natural gas imported through current pipelines.

In addition to oil and gas resources, Kazakhstan and Uzbekistan have rich uranium mines. Kazakhstan is world second largest producer of uranium and has high potential for renewable energy. It mainly exports uranium to Russia and China, but Kazakhstan has highly increased its production amount and continues to increase. Uranium is the main fuel for nuclear energy.

According to the statistics from World Integrated Trade Solution¹, among main uranium importers Spain, France, and EU is in top five, which makes them potential importers of Kazakhstan’s uranium. New routes can create a chance for Kazakhstan to export its Uranium to EU countries.

Kazakhstan's uranium exports and production figures demonstrate its worldwide significance. Kazakhstan achieved a new record in 2023, exporting $2.46 billion in uranium, a 33% increase over the previous year.

China and Russia were key export markets, accounting for $922.7 million and over $1.2 billion in imports, respectively. Europe remains an important prospective market for Kazakh uranium, as it moves toward more sustainable energy options. Kazakhstan's top uranium producer, raised its 2024 output target to 22,500-23,500 tons, highlighting its importance in world energy supply. Its uranium is critical for nuclear power generation, a significant component of the EU's energy diversification plan during the Russia-Ukraine war.

Kazakhstan is also interested in its renewable energy supplies. Kazakhstan Ministry of Energy has published a draft agreement among Azerbaijan, Uzbekistan, and Kazakhstan regarding promoting reciprocal collaboration in the fields of renewable energy and energy efficiency².

They emphasize the significance of green and clean energy in global efforts to address climate change, which also contributes to the interests of EU countries. The EU's interest in Kazakhstan's renewable energy is driven by its ambitious climate and energy objectives. The European Green Deal intends to make the EU climate neutral by 2050, requiring significant investments in green energy and diversification of energy imports to minimize reliance on conventional sources such as Russia. Kazakhstan's renewable energy projects correspond with these objectives by providing clean energy sources such as solar, wind, and hydro, which are critical to fulfilling the EU's sustainable energy transition goals.

The facts show that Kazakhstan to collaborating on new energy infrastructure initiatives aimed at diversifying energy supplies and transit routes in Europe, Central Asia, and the Caspian region, with the goal of connecting Azerbaijani and Central Asian energy systems for strategic energy expansion and sustainable green energy exports.

There are several routes which engage OTS countries, one of the main routes is The North-South Transport Corridor. Its main route starts from India and extends through Iran and Azerbaijan towards Russia. Also, the roads coming from central Asia mainly join to the route through Azerbaijan, which increases logistics and integration of Azerbaijan.

The fact that Azerbaijan is actively involved in this initiative further highlights how important OTS's location is. In addition to providing road access India to the region, the project also essential for economic and commercial integration of the region. This initiative promises its members economic growth, trade, as well as energy security, and regional cooperation. The OTS envisions joint efforts to boost the region's economic potential, including the development of strategic energy infrastructure initiatives, the promotion of the Zangezur Corridor, the enlargement of the Middle Corridor, and projects in a variety of other areas.

Last but not least, the aim of Zangezur corridor is not only for connecting Azerbaijan and Nakhchivan Autonomous Republic, but it is also essential for both middle corridor and alternative route for Azerbaijan, Türkiye and Georgia. Geographically, it is a crucial destination for OTS members and observers. If the project is successfully realized, it will change many scenarios in the region.

To conclude, by focusing on renewable energy, connectivity initiatives like the Middle Corridor and TRACECA, and joint infrastructure development, OTS nations hope to establish themselves as significant actors in global trade and energy markets. This vision is supported by a commitment to incorporating sustainable practices, encouraging interdependence among member states, and capitalizing on geographic advantages. Projects like the Zangezur Corridor and green energy initiatives demonstrate an eagerness to build robust supply chains, diversify energy sources, and foster regional stability. These joint efforts are consistent with worldwide trends toward energy efficiency and green transformation, making the OTS an important contribution to the changing geopolitical and economic landscape.

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