Review of new political risks for the multinational energy corporations in the Caspian basin: a study for Azerbaijan

Abstract

Abstract Azerbaijan is known for its rich oil and natural gas resources and transit location in the Caspian basin. This article explores current political risks for the energy Multinational Corporations (MNC’s) in Azerbaijan. In order to identify a political risk, a literature review is conducted, highlighting four categories proposed by Fitzpatrick as the main framework to understand the conditions giving rise to them. The findings focus on oil price fluctuations, COVID-19 pandemic, war with Armenia, climate change and environmental issues, digitalisation and technology and possible developments in Iran as the new political risks for the energy MNC’s in Azerbaijan enforcing foreign investors to reconsider their risk analysis in this country.