Goldman Sachs’s $5 per barrel increase in its oil price forecast may at first glance seem like a normal piece of news about the global energy market. However, for the Azerbaijani economy, which is significantly dependent on oil revenues, this change has broader macroeconomic implications. It is especially noteworthy that this decision coincides with a period when Azerbaijan’s foreign exchange reserves have reached record levels, deposits in the banking sector have grown, and the country’s current account surplus is maintained.
Goldman Sachs expects Brent oil prices to average $85 in December 2026 and $80 in 2027. WTI forecasts are $80 and $75, respectively. The bank’s forecast is based on the assumption that disruptions in shipping in the Middle East will continue until next year.
However, the $5 increase in the forecast also indicates that a large and long-term oil shortage is not expected in the market. The most important indicator for Azerbaijan is the price of oil actually exported by the country. On September 8, the price of Azeri Light reached $107.31.
This is $42.31, or about 65 percent, higher than the $65 oil price used in the preparation of Azerbaijan’s 2026 state budget. This difference is also reflected in the main financial indicators of the Azerbaijani economy. According to official data from the Central Bank, the institution’s foreign exchange reserves reached $15,301.3 million as of August 31.
This is an increase of $3.8 billion, or 33 percent, since the beginning of the year. In August alone, the Central Bank bought about $1.5 billion from the foreign exchange market. The Central Bank attributes this situation to the current account surplus and de-dollarization in the financial sector.
It should also be noted that this is the highest indicator since the devaluation in 2015. Here, the importance of the oil price becomes apparent. When oil prices are high, the volume of dollars entering the country from exports increases.
Extract — continue reading at the source.
