In March, European Council President António Costa traveled to Baku and signed a fifteen-point joint statement with President Ilham Aliyev spanning energy, defense, digital cooperation, and transport. In mid-April, a large Azerbaijani delegation led by Deputy Foreign Minister Yalchin Rafiyev sat down with their European counterparts in Brussels to resume negotiations on a new bilateral agreement, with the next round scheduled for Baku in June.

The agreement under negotiation would replace the Partnership and Cooperation Agreement signed in 1996 and ratified in 1999. Talks on a successor began in 2017 and limped along until 2022, when they effectively stalled. Both sides maintain that 90 percent of the text is agreed. The sticking points that make up the remaining 10 percent are largely trade provisions.

Alongside the bilateral agreement, the two sides are negotiating a set of partnership priorities: a political road map for cooperation. Brussels is also assembling a separate broader support package to channel investment into connectivity, energy, and structural economic assistance to support the peace process between Armenia and Azerbaijan. 

Upon assuming office in 2024, Costa and the EU High Representative Kaja Kallas made recalibrating relations with Baku an early priority for various reasons, most obviously energy. The proportion of EU pipeline gas imports coming from Russia plummeted from roughly 40 percent in 2021 to around 6 percent by 2025: about 18 billion cubic meters, the lowest since the mid-1970s. Meanwhile, more than half of the 25.2 billion cubic meters Azerbaijan exported in 2025 went to the EU, bringing Baku’s share of total EU gas imports up to about 4 percent.

That may be a small number for the EU overall, but it’s a game changer for individual member states, in particular, Bulgaria, Greece, and Italy. Baku now supplies ten EU member states, with new contracts with Germany and Austria in effect from early 2026. The war in Iran, which has disrupted transit through the Strait of Hormuz and rattled global energy markets, has made this dependence even more acute. As Costa said in Baku, “Our energy partnership is more important than ever.” 

The second reason is strategic geography. Wars on two of Azerbaijan’s borders—in Ukraine to the north and the Middle East to the south—continue to reorder connectivity and transit flows across Eurasia. The trans-Caspian corridor, which links Central Asia to European markets through Azerbaijan, Georgia, and Türkiye, has emerged as a critical alternative to routes passing through Russian or Iranian territory.

For the EU, investing in this corridor means reducing strategic dependence on adversarial transit states. Azerbaijan has expressed interest in joining the Common Transit Convention, an EU framework that allows goods to move across the borders of its members under simplified customs procedures. The convention—which currently encompasses all member states, the European Free Trade Association countries, Türkiye, Georgia, Ukraine, and several Western Balkan states—could embed the South Caucasus into a continental trade architecture with territorial continuity to European markets.

The third reason is the normalization of relations between Armenia and Azerbaijan, which has advanced at a pace few predicted. The TRIPP agreement of August 2025 established a would-be U.S.-operated connectivity route through Armenian territory linking mainland Azerbaijan to its exclave Nakhchivan. Since then, Azerbaijan has lifted its ban on transit to Armenia via third countries. The EU has already designated the Nakhchivan segment of regional connectivity infrastructure a priority, and Special Representative Magdalena Grono traveled to the exclave in August 2025 to assess rail upgrades. For the first time in three decades, something resembling a shared regional vision is taking shape, and the EU wants to underwrite it.

That window could close, however. TRIPP’s implementation faces headwinds: The United States had sourced roughly $400 million in financing by late 2025, but the full multibillion-dollar fund remains unstructured. Ground has yet to be broken on the road and rail infrastructure. Armenia’s parliamentary elections on June 7 will function as a plebiscite on Prime Minister Nikol Pashinyan’s peace agenda. A referendum to remove references from the constitution to Nagorno-Karabakh, which Azerbaijan considers a precondition for signing the final treaty, is expected to follow. If these processes stall, the regional momentum that makes EU-Azerbaijan engagement so timely could dissipate.

Even if the regional context holds, the partnership faces obstacles that neither side can avoid indefinitely. The most consequential friction, however, is conceptual. Brussels and Baku have increasingly different views of the purpose of their partnership. The EU’s institutional architecture embeds normative conditionality into its external agreements almost by default. The European Parliament’s April 28 resolution reinforces that logic.

Azerbaijan, in contrast, has long pushed for a transactional framework, and now the underlying strategic self-image has shifted. A decade ago, Azerbaijan broadly conceived of itself as part of the wider European geopolitical space: It participated in the Eastern Partnership and hosted European Games, all without ever seeking EU membership. Today, Baku increasingly defines itself as a Eurasian actor, deepening ties with Central Asia, Türkiye, and the Gulf states, and frames its European engagement as one vector among several rather than a defining orientation. The 2020 Karabakh war and the diplomatic fallout of 2023–2024 accelerated a drift that was already under way.

This divergence matters because it shapes what each side considers a viable agreement. The EU has maintained normative conditionality elsewhere, which makes an upgraded Azerbaijan partnership without comparable conditions a hard sell in Brussels. Yet insisting on a framework that Baku no longer accepts as legitimate risks producing an agreement that is either too diluted to matter or too demanding to ratify. Both sides appear to have calculated that the strategic imperatives of the moment justify proceeding; the question is whether they can find an acceptable political language without alienating a partner that increasingly sees itself as under no obligation to adopt one.

Then there is the gap between the EU as an institution and the EU as twenty-seven sovereign states, which remains a chronic handicap: There is no single EU foreign policy, despite the persistent need for one. Commission President Ursula von der Leyen’s remark in April, grouping Türkiye alongside Russia and China as influences the continent must guard against, is a case in point. That a NATO ally, EU candidate, and indispensable partner in the South Caucasus can be casually cast as adversarial by the head of the commission speaks less to a policy position than to a deeper disorientation. In Baku, where Türkiye’s role as a strategic partner and transit partner is axiomatic, the episode reinforced a familiar suspicion that Brussels does not fully grasp the region’s diplomatic geometry.

But the choice facing the EU is not between a grand bargain and nothing. Increased support for the trans-Caspian route would consolidate Baku’s position as the logistical bridge between Europe and Central Asia. Accession to the Common Transit Convention, if extended to both Armenia and Azerbaijan alongside Türkiye and Georgia, would create a seamless customs corridor from the Caspian to the Adriatic. At the same time, not all benefits need to operate at the macro level. For ordinary Azerbaijanis, normative pull still matters. Liberalized visa arrangements, educational exchanges, deeper professional mobility, and similar initiatives would build engagement from the bottom up: the kind that outlasts diplomatic seasons.