Azerbaijan's oil fund holds $73.5 billion: Gold accounts for 36% of the total
At the end of March, Azerbaijan’s sovereign wealth fund, SOFAZ, managed $73.5 billion. This amounts to 93.2% of the economic output that the rating agency Fitch expects for 2026. Gold is the largest component of the portfolio, accounting for 36% of the assets. Fitch released its assessment on August 25.
Between 2023 and the end of the first quarter of 2026, gold contributed $19.4 billion to the growth of the fund’s assets. Only 26% of this is attributable to an increase in volume. The rest is due to price appreciation. In other words, the fund purchased less than it earned.
A commodity exporter that does not export gold
At the end of 2025, gold accounted for 32.2% of Azerbaijan’s government foreign assets. By contrast, the metal accounted for 0.2% of the country’s merchandise exports. Azerbaijan earns its money from oil and gas and invests a growing portion of those revenues in gold. The government’s balance sheet thus depends on two prices rather than one.
SOFAZ itself reported a portfolio of $72.6 billion as of July 1, 9.1% more than a year earlier. Compared to the start of the year, the holdings shrank slightly. Between January and April, the fund sold a portion of its gold reserves and rebalanced the portfolio. Fitch cites this sale as an example of how changes in volume can dampen the price effect.
Fitch upholds the rating but does not hold out the prospect of an upgrade
Fitch rates Azerbaijan at BBB-, the lowest level in the investment-grade category. The fund’s assets provide the country with exceptionally high foreign exchange liquidity and the status of a net creditor vis-à-vis the rest of the world. Both factors raise the rating above what the economic structure alone would warrant.
“The rise in gold prices supports Azerbaijan’s rating but is unlikely to be a reason for a further upgrade in the short term,” the August 25 report states. Fitch observes the same accumulation of gold reserves among central banks and sovereign wealth funds in the Caucasus and Central Asia.
For German exporters, net creditor status is particularly important. Azerbaijan finances power plants, power grids, rail lines, and industrial facilities using its own funds and does not need to take out expensive foreign loans to do so. This reduces the payment risk associated with large orders and lowers the cost of government export credit coverage. At the same time, more than a third of this buffer is now tied to the price of gold. If the price falls significantly, the reserve shrinks, and the government’s solvency once again depends solely on the price of oil. Anyone entering into long-term supply contracts with Baku should keep an eye on both prices.
Sources: Fitch Ratings, report dated August 25, 2026 (EN); State Oil Fund of the Republic of Azerbaijan, portfolio data as of July 1, 2026 (EN); APA-Economics and Trend (EN).
SK, Frankfurt