Azerbaijan has dramatically raised the expected amount it forecasts to receive from crude oil output from Q2 2021.

State Oil Company of Azerbaijan Republic (SOCAR) experts say second-quarter revenues could rise from a budget line of $40/barrel for Azeri light to $80-85. Two sources in SOCAR confirmed this estimate to The Tribune.

Oil accounts for about 80% of the total export structure of Azerbaijan.

“The volume of oil exports in 2021 will largely depend on decisions within the OPEC + format, in which Azerbaijan also participates,” said one SOCAR official.

Azerbaijan’s production obligations in the first quarter of 2021 were maximum 595 thousand barrels/day. This does not take into account condensate from the Shah Deniz field, expected to grow to 4.3 million tons from 3.6 million tons in 2020,” the source said.

Azerbaijan’s main production volumes come from the Caspian offshore fields Azeri-Chirag-Guneshli (ACG). In 2020, ACG produced 175 million barrels of oil.

As of February 25, the price of Azeri Light on CIF-based in the Italian port of Augusta exceeded $66 per barrel. Among the buyers of Azerbaijani oil, 75% are concentrated in Europe, 20-25% – in Asia, the rest – the American continent.

As for the revenues of the 2021 state budget, with an oil price of $40/barrel, they are projected at Azerbaijan Manat (AZN) 25.427 billion, or USD 14.95 billion. The state budget deficit for 2021 is projected at 3.116 billion AZN or 4.1% of GDP.