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.