A Financial Review of the State Oil Fund of Azerbaijan under Shifting Global Dynamics

Gubad Ibadoghlu, a senior policy analyst at the Economic Research Center

Abstract

The financial sustainability of the State Oil Fund of Azerbaijan (SOFAZ) is entering a critical phase, shaped by both domestic and international economic shifts. With Donald Trump’s return to power in the United States, significant changes in domestic and foreign policy are reshaping global markets, particularly in the energy and securities sectors. These transformations have direct implications for SOFAZ’s revenue streams, expenditure framework, and long-term financial stability. This article provides a comprehensive analysis of SOFAZ’s fiscal landscape, evaluating key revenue sources, spending patterns, and sustainability risks. It examines the impact of declining oil production, shifting commodity prices, and geopolitical uncertainties on SOFAZ’s financial trajectory. Additionally, the study assesses how increasing budgetary transfers, market volatility, and investment strategies influence the Fund’s ability to navigate economic uncertainties. By integrating these factors, this research offers a forward-looking perspective on SOFAZ’s future financial management and strategic adjustments, contributing to broader discussions on oil wealth governance and economic stability in Azerbaijan.
Keywords: Azerbaijan, SOFAZ, oil price, revenue, expenditure, financial management, geopolitical uncertainties, budgetary transfers, market volatility, investment strategies, wealth governance, economic stability