Among recent developments, one important event went largely unnoticed by the media: the fourth meeting of the Azerbaijan–Israel Joint Intergovernmental Commission on Economic Cooperation. Despite being the fourth in sequence, the meeting was unique — it was the first held after the opening of Azerbaijan’s embassy in Israel and just weeks after the formal end of the Gaza conflict. This timing underscores that bilateral relations have clearly entered a new phase.
The economic dimension of this partnership is becoming increasingly significant. Although bilateral trade remains volatile — around USD 1.7 billion in 2022, falling by half to USD 765 million in 2024 — investment flows have reached a new level. In just the first six months of 2025, Azerbaijan’s direct investments in Israel amounted to some USD 542.5 million, demonstrating a strategic approach. A major driver of this investment activity is SOCAR’s acquisition of roughly 10% of the Tamar gas field in the Eastern Mediterranean.
Moreover, together with Israeli partners, SOCAR and other members received a license for gas exploration in Israel’s Exclusive Economic Zone — for instance, Block I (Zone I), covering roughly 1,700 km², where SOCAR acts as the operator of a consortium that includes BP and NewMed Energy.
Cooperation with Israel has strengthened Azerbaijan’s position in the Eastern Mediterranean, allowing it to participate in regional gas-energy chains. Through Israel, new logistical routes, technology transfers, and indirect influence on regional gas supply balances become possible.
In the context of rebuilding Azerbaijan’s liberated territories, including the Karabakh region, the presence of Israeli companies and technologies is increasingly practical. Israeli firms are being considered key partners in agricultural revival, infrastructure modernization, and digital land-cadastre management. Azerbaijan is closely studying Israel’s experience in “smart cities,” water technologies, and agri-innovation — making Israel a potential technological donor in Karabakh’s post-conflict recovery. This is not merely an extension of existing trade and investment cooperation, but part of Azerbaijan’s broader construction and digital strategy to integrate the liberated territories into the national economy.
At the same time, Azerbaijan is emphasizing digital transformation. The state strategy highlights the need to introduce e-governance, big data, artificial intelligence, the Internet of Things, cybersecurity, and modern ICT infrastructure. Israel’s expertise in these areas is viewed as highly valuable. Cooperation is already visible through investments in startups and technological platforms — for example, the USD 15 million agreement between Azerbaijan Investment Company (AIC) and Israel’s investment platform OurCrowd marks a noteworthy step. These technologies are central to Azerbaijan’s urban, regional, and post-conflict development, particularly in infrastructure restoration.
Overall, the technological partnership between Azerbaijan and Israel has expanded far beyond basic trade or resource-focused ties, evolving into a multifaceted collaboration in high technology, startups, digitalization, science, and innovation. A key milestone is the April 2025 memorandum on scientific cooperation, under which Azerbaijan’s Agency for Innovation and Digital Development (IDDA) confirmed plans to attract Israeli tech companies to open offices in Azerbaijan, establish production of high-tech goods, launch IT training centers, and create a High-Tech Center of Excellence.
Thus, amid growing trade and investment, Azerbaijan–Israel cooperation is becoming ever more diversified — shifting from raw-material and energy ties toward technological, infrastructural, and digital projects. The commission meeting served as a platform to reaffirm earlier agreements. Crucially, the focus is moving from simple trade to deep business partnerships, from short-term deals to high value-added projects, and from one-directional flows to mutually beneficial supply chains.
For Azerbaijan, the strategic priority remains the transition from a resource-export economy to one based on knowledge and high technology — with the liberated territories integrated into this model. Within this framework, Israel is not just a buyer or consumer but a strategic partner in the technological and infrastructural dimension. Future steps are expected to include expanded Israeli involvement in agro-industrial parks, multifunctional industrial zones, digital land-management systems, and sustainable energy projects in Azerbaijan’s liberated territories.
Ilgar Velizade
