Joseph Shumunov

The Next Level for Israel-Azerbaijan Relations

Israel-Azerbaijan Relations

Reading through the latest headlines about Israel-Azerbaijan relations, one frequently comes across the phrase “oil for arms.” For some analysts, a 30-year diplomatic partnership can be summed up by a simple, haphazard, three-word catchline. Continuing to reduce the rich, historic relationship into this bumper sticker slogan defies reason.

Though this heedless formula is not all wrong. On one side, Azerbaijan, with its peculiar name, language, and post-Soviet mystique, provides Israel with vast amounts of Caspian oil, accounting for almost 40% of Israel’s oil supply. On the other side, Israel, with the vision of befriending its Muslim neighbors, supplies Azerbaijan with cutting-edge military weaponry and counter-terror intelligence — literally oil for arms. And it would be a mistake to discount this state-to-state reciprocity. It diversified Israel’s gas supply from affable, oil-producing Arab states, and helped raise Azerbaijan’s military power to near NATO standards.

But what one does not frequently read in media is the other, deeper half of the Israel-Azerbaijan relationship, not built upon a stale “memorandum of understanding,” but centuries of cultural exchange and appreciation.

Ancient Friendship

There is an ancient history between Azerbaijanis and the People of Israel which many claim goes back to the Babylonian exile 3000 years ago. Jews have always lived in peace and security in Azerbaijan, a multiethnic and culturally Muslim nation. This history is best embodied in the Red Village, an ancient, all-Jewish, “shtetl,” created by 18th-century Azerbaijani ruler Fatali Khan to protect Jews fleeing from Iran, located in Azerbaijan’s Quba region.

Even after the break of the Soviet Union, which forced many Azerbaijani Jews to migrate to the Jewish state, the community still values its diasporic roots. Notably, thousands of Azerbaijani Jews advocated for and stood by their Azerbaijani brethren during the 2020 Second Karabakh War with Armenia. They took to the streets of Jerusalem and Tel Aviv waving their Azerbaijani flags, brandishing little crescents and stars, happy to be the black sheep of the Jewish diaspora.

Whereas Syrian Jews are nostalgic for their Arab heritage but can longer return to the courtyards of Damascus, Azerbaijani Jews are intensely proud of their second homeland and grateful to be able to go back to their villages and neighborhoods of origin. Unlike Warsaw, a symbol of Jewish destruction in Europe, or Baghdad, cleansed of its ancient Jewry, Baku, Azerbaijan’s capital, is a cosmopolitan city home to thousands of Jews and two government-funded synagogues. Just this month, the Azerbaijani government announced the creation of a state-funded Jewish Cultural Center, to which the community’s Rabbi Abraham Yakubov exclaimed, “In the world there has not been a place like this [Azerbaijan], where Jews have always lived at peace with their [Muslim] neighbors and where we have never once experienced antisemitism.”

It’s not just Azerbaijani Jews. Visiting Baku’s kosher restaurant, one will stumble upon the growing number of Israeli tourists amazed at how hospitable their Muslim neighbors are 2,000 miles from Jerusalem and 200 miles away from the Islamic Republic of Iran.

The feeling is certainly mutual. Azerbaijanis see Jews, and by extension Israelis, as friends who share a common fight against radical powers in the region. Azerbaijanis respect the Jewish effort for self-determination, both in terms of Zionism, since Baku has long been a bastion of the Zionist movement, even during the Soviet period, and Azerbaijani nationalism, which Jews have been at the forefront of since 1918.

This affinity for the Jewish people is ingrained in the overall Azerbaijani “character,” as displayed on the country’s tricolor: blue for Pan-Turkism, uniting with its other Turkic brother nations; red for republicanism, supporting a strong constitutional republic that confers rights to its minorities; and green for cultural Islam, promoting a pluralistic, progressive, and moderate form of the Muslim tradition. As long as this uniquely Azerbaijani quality survives, the government and its citizens will see both the People and the State of Israel as brothers in arms.

Discreet but Strategic Partnership

The two nations established diplomatic relations in 1992, with Israel first opening an embassy in Baku. Azerbaijan periodically postponed an embassy opening in Tel Aviv until March of this year, often citing fears of escalation from neighboring Iran.

The relationship between the two states has long been described as a “discreet but strategic partnership” — important enough to make breakthroughs in energy and security, but careful enough to prevent outright confrontations with the Islamic Republic. Every decade since 1992, a new level of the relationship has been reached.

In the 1990s, Israel journeyed on a new peripheral foreign policy strategy, partnering with newly independent Muslim-majority states of the former USSR. Azerbaijan enters center stage: a young, politically unstable republic in the depths of the First Karabakh War (1989-1994), in need of Israeli support. The Jewish state advocated for Azerbaijan via pro-Israel Jewish organizations such as the American Jewish Committee (AJC), against a U.S. Congress that was deeply swayed by diasporic Armenian lobbying groups. In 1992, Congress passed the Freedom Support Act (Section 907) banning any military aid to Azerbaijan. After requests from Azerbaijani President Heydar Aliyev, the Israeli government employed its supporters in Washington, leading President George W. Bush to wave the bill in 2001. This paved the way for not just strong Israel-Azerbaijan relations, but a powerful stance among some Americans Jews to support the Azerbaijani cause.

Azerbaijan also had a young market, and Israeli companies were keen to gain access. Most notably, the Israeli firm Bezeq bought a large share of Azerbaijan’s telephone operating system, enabling the joint establishment of Bakcell by Israeli GTIB Communication and Azerbaijan’s Ministry of Communication. It became the first, and eventually one of the largest, cell phone operator in the country. These initiatives in part paved the way for Azerbaijan’s economic liberalization, and in effect created a better environment for relations with Israel and the West.

And after tragedy struck on September 11, 2001, Israel and Azerbaijan expanded their military and petrochemical partnership amid the Global War on Terror. Israel began periodically modernizing the Armed Forces of Azerbaijan by providing aviation, artillery, and anti-tank weaponry, since Baku was an air corridor for the American military during the United States’ involvement in Afghanistan and Iraq — not to mention the perfect lookout over Tehran’s affairs.  In fact, Israeli intelligence helped to thwart several attacks planned by Iranian agents in Azerbaijan, such as the 2008 Hezbollah-backed attack on the Israeli Embassy and an anti-missile radar station.

The most groundbreaking outcome of the decade’s relations was the opening of the BTC Pipeline in 2006, which gave Israel a lucrative alternative for its oil supply. Certainly, there was an “underlying factor of oil,” but trade relations also expanded, such that Azerbaijan became Israel’s second-largest business partner. By 2009, trade turnover reached $180 million, and several Israeli firms started investing in Azerbaijan’s agricultural economy, which is historically the country’s second-largest sector.

In the 2010s, the “oil for arms” regime matured, setting Baku and Tel Aviv on its current trajectory. Azerbaijan became one of Israel’s greatest suppliers of gas, accounting for nearly 30% of the Jewish state’s stock by 2011. Baku’s energy exports rose from $800 million in 2011 to nearly $1.8 billion in 2014, just as the State Oil Company of the Azerbaijani Republic (SOCAR) started drilling in Israel’s oilfields.

Meanwhile, Azerbaijan had to face the rise of Islamic fundamentalism backed by Iran, and an increasingly hostile Armenia backed by Russia. Former Israeli ambassador to Azerbaijan, Raphael Harpaz, recognized his partner as “so friendly, so progressive” and therefore “not something the Israelis should take for granted.” Then came the increased military support. From 2010 to 2011, Azerbaijan’s military expenditures drastically expanded from $1.59 billion to $3.1 billion, due in part to Israel’s provision of arms and support for homegrown weapons manufacturing, such as a large package of UAVs in 2011. Israel saw a vested interest in the Azerbaijani side as Armenia was getting closer with Iran, such that trade relations between Yerevan and Tehran reached $300 million by 2014.

At each level of this evolving relationship, the motivation for increased relations and obstacle to full diplomatic ties has come from the same source — Tehran.

Post-2020 Development

But this started to change in 2020. Azerbaijan came out victorious in the 44-day Second Karabakh War thanks in part to Israeli and Turkish arms, crowning Baku as a major power in the South Caucasus; and the Jewish state struck a peace deal with peripheral Arab states through the historic Abraham Accords. Azerbaijan proved its military power against Iran- and Russia-backed Armenia, and Israel confounded Iran’s long-term plan of encircling the Jewish state with hostile Muslim neighbors. Instead, Israel added four new friends. Israel’s ability to expand its peripheral support assured Baku that it was not going to be alone for long. At the same time, Armenia’s complete pivot toward Iran, such as Prime Minister Nikol Pashinyan’s cozy meetings with Raisi, or Iran and Armenia agreeing to double gas trade in 2022, signaled that Armenia was a lost cause for Israel.

Previously, the Iranian threat was what forced Azerbaijan’s relationship with Tel Aviv into hiding, but now, it is the justification for an open, full diplomatic relationship. Add in Russia’s February 2022 full-scale invasion of Ukraine, and there is no ambiguity about Iran and Russia’s growing strategic partnership. For the Islamic Republic’s two major regional adversaries, this left a major opportunity to formalize relations.

Next Level: Alliance

Flashforward to 2023, it has now been five months since the historic opening of the Azerbaijani Embassy in Tel Aviv. Israeli Defense Minister Yoav Gallant has already come back from a visit to Baku, which he described “as part of raising our relations to new levels which continue to get closer.” Minister Gallant reaffirmed the relationship’s foundation in his meeting with Azerbaijani Minister of Defense Zakir Hasanov, applauding the “positive history of the Jewish people and the Azeri people along with joint interests.”

As the two countries grow closer, the Iranian threat is starting to look less like a hindrance to the alliance and more like the focal point of the relationship.

Since 2022, Azerbaijan and Israel have grown accustomed to Iranian backlash. The Israeli Ambassador to Azerbaijan, George Deek, receives frequent death threats from Iranian agents. On January 27, 2023, a gunman stormed into the Azerbaijani Embassy in Tehran, killing a security guard and wounding two others, temporarily freezing relations between Azerbaijan and the Islamic Republic. Iranian state media continually admonishes Baku’s collusion with the “Zionist regime” whilst building up a hostile presence on its northern border. This month alone, Azerbaijani security forces arrested an Afghan national with ties to Iran, who was planning an attack on the Israeli Embassy in Baku.

The two states are now asking each other: “Why remain discreet if Iran is not?”

During the Azerbaijani Embassy opening in March, Israeli Foreign Minister Eli Cohen answered this question by stating his government is “forming a united front against Iran” with Azerbaijan. While Iran is distracted by its ongoing domestic upheaval, Israel and Azerbaijan are turning their ancient friendship and contemporary partnership into a serious diplomatic alliance — the next level.

Baku and Tel Aviv are taking the relationship to this next level at a very rapid pace, as seen in the countless economic, security, and diplomatic developments, which Foreign Minister Cohen described during his trip to Azerbaijan this spring.

Economically, Israel’s trade with Azerbaijan during the first two months of 2023 amounted to $334.1 million, a 26.36% increase from 2022. Israeli companies are making significant contributions to Azerbaijan’s economy, from installing the latest agricultural technologies in rural regions and providing expertise and education in cybersecurity to investing more than $3 billion into Karabakh’s reconstruction. On July 17, the State Oil Company of the Azerbaijani Republic (SOCAR) returned the favor by placing a bid on Israeli hydrocarbon exploration, meaning the Azerbaijani government would lead the development of Israel’s profitable Leviathan offshore field.

The bulk of this alliance is built upon an evolving security partnership. From 2016-2021, Azerbaijan received 69% of its arms imports from Israel, proven by the almost 100 flights loaded with Israeli weapons landing in Baku.  Just from 2020-2022, the purchases totaled $22 million. The two states are also venturing into new heights, literally; Israeli Aerospace Industries (IAI) announced in April that it will be supplying two new satellites worth $120 million to Azerbaijan.

But of course, Iran is the target. Although Azerbaijan denies being a refueling base for potential Israeli attacks on Iranian nuclear sites, Tehran’s at least 50 planned attacks against Israelis and other Jews worldwide as well as the attempted attack in Baku may mean Azerbaijan is ready to go full force and speak publicly about the matter. In April 2023, a significant development occurred within the alliance, as Israel and Azerbaijan decided to incorporate an “ethnic” component into their reconnaissance operations. This new approach involved Israeli intelligence discreetly leveraging Iran’s substantial Azerbaijani minority for intelligence gathering. To show their support and strengthen their bond with the Azerbaijani minority in Iran, 32 members of the Israeli Knesset signed a letter of solidarity. This move was aimed at both intensifying the infighting within Iran and fostering closer ties with the Azerbaijani Republic.

The “next level” will hopefully include a familiar partner — Turkey. The Israel-Azerbaijan “united front” is slowly but surely including Azerbaijan’s brother country, as Baku has been at the center of Israel’s normalization with Turkey. Israel and Turkey started reconnecting as strange bedfellows during the Second Karabakh War, supplying drones and other weapons to Azerbaijani forces. President Aliyev is steadfast in normalizing relations between his “good friends” and is trying to get his allies on the same side against Iran.

Both Israel and Azerbaijan are optimistic about the future, per Erdogan’s re-election in May, which elevated Hakan Fidan, the former director of Turkish intelligence, to Minister of Foreign Affairs. Fidan has noteworthy affiliations to Israeli intelligence leadership, having enabled the process of Turkey-Israel rapprochement and, in 2022, working alongside the Jewish state to successfully thwart an IRGC attack on Israelis in Istanbul. Old friends with new positions, like Fidan, will hopefully keep the Israel-Azerbaijan-Turkey triad on track.

Gallant’s visit to Baku is just one aspect of the new alliance’s clearly multi-pronged approach, indicating great potential not only for mutual benefit, but for the rest of the region. Whether the media writes about a new satellite, gas deals, or remarks and drills aimed at deterring Iran, one ought to recognize these not as coincidental, but as part of a concerted effort for Israel and Azerbaijan to take their ties, as Gallant vowed, to the “next level.”

It’s not just “oil for arms”

All too often, journalists leave readers with a surface-level understanding of Israel-Azerbaijan relations, an oversimplification that spreads ignorance and prevents people from grasping the nuance in this important strategic partnership. Next time one reads about “oil for arms,” remember the underlying unique, ancient Jewish-Muslim friendship, bolstered in recent decades by realist interests — and sure, that includes oil for arms.

It is also a relationship that has not fallen victim to the divisiveness of the Greater Middle East. In a region with an entrenched anti-Israel herd mentality, Azerbaijan has always been the black sheep — almost the same way Azerbaijani Jews and their relationship to their diasporic state are the misfits within Israel today. Neighboring states have looked at Azerbaijan with so much scrutiny and perplexity, but as of late, the anti-Israel herd is following suit and slowly thinning. Analysts often look to the Abraham Accords in 2020 as the beginning of a new Middle East, but what if one broadened the picture and realized it really began in 1993. On the way back from his first visit to Baku in 1993, then Prime Minister Benjamin Netanyahu argued that the Israel-Azerbaijan relationship “gives us hope that all the children of Abraham can find peace and friendship… that rises over the Caspian Sea and sets over Mediterranean.” Hindsight is 2023: Israel and the Muslim world are slowly making amends, but it really took Azerbaijan to lead the herd.

This is all to say, it’s not simply “oil for arms.”

About the Author
Joseph Shumunov is a junior at Kalamazoo College, double majoring in Political Science and International Studies, concentrating in the Middle East. He has interned for the US Embassy in Azerbaijan and was recently a research intern at the Hudson Institute for Senior Fellow Dr. Michael Doran. Joseph also joined the Tikvah Fund, where he researched the growing Israel-Azerbaijan alliance and its potential for curbing Iranian regional power as a Beren Summer Fellow.
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