Israel-Azerbaijan Relations: Exploring Funding And Support

Israel has been quietly providing financial support to Azerbaijan through arms trading and energy cooperation. In 2012, the two countries signed an agreement for Israel to sell $1.6 billion in drones and anti-aircraft and missile defence systems to Azerbaijan. Israel has also been a major oil supplier to Azerbaijan, with Baku providing at least 40% of Israel's oil needs.

Israel's arms exports to Azerbaijan

Israel is an important exporter of arms to Azerbaijan, and the two countries have been engaged in arms trading since the early 1990s. Israel has been a major provider of battlefield aviation, artillery, anti-tank, and anti-infantry weaponry to Azerbaijan. In 2012, the two countries signed an agreement for Israel to sell $1.6 billion worth of drones and anti-aircraft and missile defence systems to Azerbaijan.

Azerbaijan's defence budget is four times higher than Armenia's, and the country has used its wealth from oil revenues to fund military projects. Israel has been a key supplier, providing 60% of Azerbaijan's arms imports between 2015 and 2019, according to the Stockholm International Peace Research Institute (SIPRI). Israel's support for Azerbaijan is part of a larger geopolitical strategy, as both countries aim to counter Iran's aggressive ambitions in the region.

In 2016, Israel's defence minister, Avigdor Lieberman, supported Azerbaijan in the Nagorno-Karabakh conflict, and Israel provided significant military support to Azerbaijan in the 2020 conflict with Armenia. This included the use of Israeli-made missiles, drones, and high-technology weapons, which resulted in the loss of Armenian lives and damage to civilian structures.

In 2023, Israel and Azerbaijan signed a deal for Israel to supply Azerbaijan with two satellites for $120 million, as well as the "Barak MX" missile interception system for $1.2 billion. Israel's arms exports to Azerbaijan are not without controversy, as critics argue that they deviate from normal supplier-customer relations and threaten Israel's alliance with Armenia.

Azerbaijan's oil exports to Israel

Azerbaijan and Israel have had diplomatic relations since 1992, with Israel being one of the first states to recognise Azerbaijan's independence from the Soviet Union. The two countries have strengthened their ties over the years, with Israel providing weapons and artillery to Azerbaijan during the Nagorno-Karabakh conflict with Armenia. In 2024, an investigative journalist revealed that around 40% of Israel's annual oil consumption is supplied by Azerbaijan through the Baku–Tbilisi–Ceyhan (BTC) pipeline, which is managed by Turkey's state-owned company, Botas. This is despite Turkey's trade boycott of Israel in response to the latter's actions in the Gaza war. The BTC contractual agreements seem to obligate Turkey to maintain the oil flow even in cases of conflict or terrorism. Azerbaijan has control over the oil sales and can determine its final buyers, and in January 2024, Israel was the top customer for Azerbaijani oil, importing 523,500 tonnes worth $297 million.

Azerbaijan is a major oil supplier to Israel and has resisted pressure to cut ties with the country over the Gaza war. In 2021, it was estimated that Israel imported 65% of its oil from Azerbaijan, making it Israel's largest oil supplier. The two countries have also been cooperating closely in the energy sector, with Israel buying 40% of its oil from Azerbaijan. In a speech in 2007, the Israeli ambassador to Azerbaijan, Arthur Lenk, highlighted the continuous trade between the two countries in the energy sector. He noted that until the inauguration of the Baku–Tbilisi–Ceyhan pipeline in 2006, Israel was a key consumer of Azerbaijani oil exports. The proximity of the Ceyhan pipeline to Israel offers new opportunities for greater Israeli participation in Azerbaijan's oil sector. Lenk also mentioned that through the Trans-Israel pipeline between Ashkelon and Eilat, Israel could be a strategic partner for marketing Caspian oil to Asia.

In addition to oil exports, Azerbaijan and Israel have also been developing closer ties in other sectors, including trade, agriculture, and tourism. In April 2017, the two countries abolished double taxation, further enhancing their economic cooperation. According to the Israeli ambassador to Azerbaijan, the bilateral trade between the two countries (excluding defence and energy sectors) amounted to $260 million in 2016. The total trade turnover between Azerbaijan and Israel reached $116.2 million in the first two months of 2017, reflecting a 17.5% increase compared to the same period in 2016. In 2020, trade between the two countries (excluding oil supplies) was valued at approximately $200 million.

Azerbaijan's stance on Iran

Azerbaijan and Iran have had a tumultuous relationship since Azerbaijan's independence from the Soviet Union in 1991. While the two countries share cultural, historical, and religious ties, they have competing geopolitical interests.

Azerbaijan has increasingly aligned with Western powers, including Israel, Turkey, and the United States, while Iran is largely pro-Russian and pro-Chinese. This divergence in foreign policy has led to tensions between the two countries, with Iranian politicians accusing Azerbaijan of being an Israeli proxy.

Azerbaijan's relationship with Israel is a significant source of contention between the two countries. Israel and Azerbaijan have strengthened their ties since 2011, with both countries cooperating in the fields of defence, energy, and security. Azerbaijan's proximity to Iran is strategically valuable to Israel, and there have been reports of Israeli intelligence-gathering operations along the Azerbaijani border with Iran.

Additionally, Azerbaijan has accused Iran of supporting Armenia during the Nagorno-Karabakh conflict, which further strained relations between the two countries.

In recent years, there have been efforts to improve relations between Azerbaijan and Iran. However, tensions persist due to their competing alliances and ideological differences.

Israel's stance on Iran

In recent years, tensions between the two countries have escalated further, with both sides engaging in covert operations and military strikes against each other. Israel has also expressed concerns about Iran's anti-Israeli rhetoric and its desire for "the regime occupying Jerusalem" to "vanish from the pages of time." Israel sees Iran as an existential threat and has reportedly been preparing to strike Iran in response to Iran's missile barrage on October 1, 2024.

Leaked documents revealed that Israel was making preparations for a potential strike against Iran, moving munitions around, and conducting air force exercises involving air-to-surface missiles. This leak caused concern among US officials and is expected to anger the Israelis, further straining the sensitive relationship between the two allies.

In summary, Israel's stance on Iran is characterised by deep hostility, mutual distrust, and a history of covert operations and military strikes. The two countries are engaged in a complex proxy conflict that has significant implications for the Middle East and beyond.

Azerbaijan's stance on Armenia

Azerbaijan and Armenia have been locked in off-and-on hostilities for decades over the disputed Nagorno-Karabakh republic, which lies within Azerbaijan's internationally recognised borders but is home to a significant population of ethnic Armenians.

In 1988, as part of the disintegration of the Soviet Union, Nagorno-Karabakh was made an autonomous region. However, tensions escalated when the Armenians residing there declared their desire to secede from Azerbaijan and join the Republic of Armenia. This led to the first round of violence and war in Nagorno-Karabakh, which lasted from 1988 to 1994. During this period, Azerbaijan lost control of several sub-regions in and around Nagorno-Karabakh, including Kalbajar, Lachin, Fuzuli, Aghdam, Jabrayil, Gubadli, and Zengilan. This resulted in the occupation of 20% of Azerbaijani lands and the displacement of hundreds of thousands of people.

The United Nations Security Council responded by adopting several resolutions, including 822, 853, 874, and 884, which condemned the occupation of Azerbaijani territories and called for a cessation of hostilities and the withdrawal of occupying forces. However, the conflict remained unresolved, and tensions continued to simmer between the two nations.

During the interwar period from 1994 to 2020, Armenia continued its occupation of the aforementioned sub-regions. The second Nagorno-Karabakh war, also known as the 44-day war, began on September 27, 2020, with a counter-offensive operation by the Azerbaijani army to liberate the territories occupied by Armenia. This second war demonstrated the strength of the Azerbaijani military and ended with a decisive Azerbaijani victory.

In the early morning of September 13, 2022, Azerbaijan launched an unprovoked shelling of three dozen Armenian towns with heavy artillery and unmanned combat drones, killing over 200 Armenians, primarily soldiers. Videos appeared to show Azerbaijani soldiers mutilating fallen Armenian women and executing those who had surrendered. This incursion resulted in a ceasefire agreement, but hostilities resumed in October 2022, with Azerbaijani special forces reportedly nearing Armenia's borders.

The conflict between Armenia and Azerbaijan has resulted in a significant number of displaced people, with the Armenian government reporting that 19,000 forcibly displaced individuals had entered Armenia from Nagorno-Karabakh by September 26, 2020. The government of Nagorno-Karabakh announced its dissolution in 2020, formally ending over 30 years of separatist rule, and the number of displaced people seeking safety in Armenia was reported to have reached 68,000, with more expected to follow.

The conflict has also attracted international attention and involvement. The United States, for example, has played a key role in halting Azerbaijani aggression and has initiated meetings with Armenian and Azerbaijani officials to prevent existential threats against Armenia. Additionally, the European Union has facilitated dialogue between the two nations and remains committed to supporting the peace process.

The conflict between Armenia and Azerbaijan has deep historical roots and has resulted in significant human suffering, displacement, and international involvement. The dispute centres around the Nagorno-Karabakh region, which is claimed by both nations and has been the site of repeated military clashes and ceasefire violations.

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