Azerbaijani President Ilham Aliyev’s official visit to Germany on 20–21 July marked a notable shift in relations between Baku and Berlin, moving the bilateral agenda beyond its traditional focus on trade and energy towards a broader strategic partnership encompassing regional security, connectivity, investment and Europe’s evolving engagement with the South Caucasus.

The Joint Declaration on a Strategic Agenda signed by Ilham Aliyev and Chancellor Friedrich Merz reflects this shift. Germany increasingly sees Azerbaijan as a country positioned at the intersection of several European priorities: energy diversification, access to Central Asia, the development of the Middle Corridor and the future security architecture of the South Caucasus.

Energy remains the most immediate point of convergence. Europe’s efforts to reduce strategic dependence on individual suppliers have increased Azerbaijan’s value as an alternative source and transit partner. But Berlin’s interest is increasingly broader than Azerbaijani oil and gas. Discussions on renewable energy and hydrogen suggest that Germany is looking at Azerbaijan not only as part of its current energy security, but potentially as part of Europe’s longer-term energy transition.

Connectivity may eventually become even more important. Azerbaijan’s geographical position gives Germany and the wider EU access to a transport route linking Europe to Central Asia without relying exclusively on traditional northern corridors. The Middle Corridor therefore carries both commercial and geopolitical significance. For Berlin, cooperation with Baku is increasingly connected to Germany’s wider strategy towards Central Asia and the diversification of Eurasian supply chains.

This also explains why the Armenia–Azerbaijan peace process matters to Germany beyond diplomacy. A stable South Caucasus would make regional infrastructure safer, facilitate cross-border trade and increase the commercial viability of east–west transport routes. Peace is therefore becoming not only a political objective for Europe, but also an economic prerequisite for its connectivity ambitions.

Garabagh adds another dimension to this changing relationship. With Azerbaijan having restored its sovereignty over the territory, the focus has shifted from conflict towards reconstruction, infrastructure and economic reintegration. The scale of rebuilding in Garabagh and East Zangezur creates potential opportunities for European expertise and investment, including in renewable energy, transport, urban development and technology. For Germany, engagement with Azerbaijan therefore increasingly concerns not only regional stability, but also the economic transformation taking place after decades of conflict.

Ukraine introduced a wider European security dimension to the Berlin discussions. Azerbaijan’s position is particularly relevant because Baku has consistently supported Ukraine’s territorial integrity while maintaining working relations with Russia. At a time when direct political channels between Moscow and much of Europe remain severely constrained, Azerbaijan’s ability to communicate with different sides gives it a distinctive diplomatic position.

The discussion surrounding reported German–Russian contacts in Baku illustrated this point. Azerbaijan is not positioning itself as a formal mediator in the war, but its readiness to support dialogue aimed at ending the conflict demonstrates the broader role Baku can potentially play as a platform for communication. This is particularly significant for Germany, whose foreign policy remains heavily shaped by the war in Ukraine and the search for a sustainable European security order.

For Azerbaijan, stronger relations with Germany offer a different strategic advantage. Berlin is Europe’s largest economy and one of the EU’s most influential political centres. Closer cooperation gives Baku greater access to German investment and technology while strengthening its position in the broader dialogue with the European Union.

The visit therefore demonstrated that Azerbaijan is increasingly being viewed through a wider European strategic lens. Energy initially brought the two countries closer, but today the relationship encompasses connectivity, the post-conflict transformation of Garabagh, peace in the South Caucasus and wider questions of European security, including Ukraine.

For Germany, Azerbaijan is gradually becoming more than an energy supplier. For Azerbaijan, Germany is more than an important European economic partner. Their growing engagement reflects a broader geopolitical reality: as Europe searches for diversified energy sources, new transport corridors and reliable partners beyond its immediate borders, the strategic importance of the South Caucasus is increasing — and Azerbaijan occupies a central position in that transformation.