BAKU, Azerbaijan, July 23. Assets of the State Oil Fund of Azerbaijan (SOFAZ) totaled $72.6 billion (123 billion manat) from January through June 2026.
This is reflected in a report released by SOFAZ.
According to the report, revenues from asset management activities amounted to 3.6 billion manat ($2.1 billion). Revenue from hydrocarbon sales under oil and gas agreements totaled 5.0 billion manat ($2.9 billion).
SOFAZ transferred 6.4 billion manat ($3.8 billion) to the state budget.
The fund noted that its assets equaled $73.5 billion (125 billion manat) at the beginning of 2026 and $72.6 billion (123.4 billion manat) as of June 30, 2026.
From January through June 2026, SOFAZ's total revenue amounted to 8.5 billion manat ($5 billion). During the reporting period, the fund's oil and gas revenue totaled 5 billion manat ($2.9 billion). Total revenue from asset management activities amounted to 3.6 billion manat ($2.1 billion). The budget expenditures for the reporting period totaled 6.4 billion manat ($3.8 billion).
Oil and gas revenues:
SOFAZ's revenues from the implementation of oil and gas agreements amounted to 4.95 billion manat ($2.91 billion), including:
4.94 billion manat ($2.9 billion) from the sale of profit oil and gas,
0.9 million manat ($0.5 million) in bonus payments and transit revenue
4.9 million manat ($2.88 million) in acreage payments.
During the period, SOFAZ received 4.37 billion manat ($2.6 billion) from the Azeri-Chirag-Gunashli (ACG) field and 437.1 million manat ($257.1 million) from the Shah Deniz field (gas and condensate).
Budget expenditures:
Transfer to budget. During the reporting period, 6.4 billion manat ($3.8 billion) was transferred to the state budget under the implementation of SOFAZ's 2026 budget.
Project expenditures. From January through June 2026, 14.3 million manat ($8.4 million) was allocated to the following ongoing projects, including 2.1 million manat ($1.2 million) to finance the "State program on increasing the international competitiveness of the higher education system in Azerbaijan for 2019-2023",
12.3 million manat ($7.2 million) to finance the "State program on the education of youth at prestigious higher education institutions in foreign countries for 2022-2028".
Management expenses. During the reporting period, SOFAZ's management expenses amounted to 15.4 million manat ($9.1 million).
Off-budget expenditures:
During the reporting period, off-budget expenditures resulting from changes in gold prices and exchange rates amounted to 3.7 billion manat ($2.2 billion).
Current state of financial markets and impact on the portfolio
"As a result of the U.S.-Iran conflict that began in the first quarter of 2026, high volatility was observed in global financial and energy markets, and the war had a negative impact on all investment directions. During the second quarter, prices for various financial instruments recovered, positive returns were achieved, and gold made a negative contribution to total assets under management.
At the beginning of the first quarter, investors' focus on safe assets supported government bond prices. Since the end of the first quarter, this trend has reversed, and a sharp increase in oil prices has re-strengthened inflation expectations and caused bonds to lose value in developed country markets.
Inflationary pressures from energy prices have been most pronounced in European markets, while the US dollar bond sub-portfolio has been relatively resilient over the period.
Global equity markets performed well at the start of the first quarter, but declined for the remainder of the first quarter due to the escalation of the Iran conflict and heightened geopolitical risks. Markets recovered in the second quarter, with the quarter being the best quarter for equity markets since 2020, driven by investment interest in artificial intelligence and lower oil prices amid ceasefire talks. Concerns about the high valuation of technology companies weighed on semiconductor stocks at the end of the second quarter, leading to renewed volatility.
Gold prices rose sharply at the start of the first quarter, driven by structural factors such as a weaker U.S. dollar and a shift from government bonds and currencies to real assets. Prices fell sharply at the end of the first quarter, and this decline continued during the second quarter, against the backdrop of rising real interest rates," the report noted.
Established on December 29, 1999, SOFAZ is a special state institution responsible for collecting oil and gas revenues, managing them efficiently, and preserving wealth for future generations. The Fund operates independently of the state budget as an extra-budgetary institution.
