Lithuanian Annual Strategic Review

Azerbaijan, the strongest state of the South Caucasus, at the same time is one of the most vulnerable countries in the region. On the one hand, the country has faced the problem of territorial integrity for more than two decades already because of frozen conflict with Armenia over Nagorno Karabakh. On the other hand, Azerbaijan’s importance in European energy policy is constantly growing. If Azerbaijan would start a war with Armenia in order to restore its control over Nagorno Karabakh, the ambitious energy policy aiming to turn Azerbaijan into important oil and gas transportation link between East and West that has been developed for a decade, would end without a success. Thus at the same time the problem that Azerbaijan does not control part of its territory is a major obstacle for sustainable development of the country and for Azerbaijan’s international cooperation. In this context, Azerbaijan faces a dilemma – to take up measures of hard security for restoring its territorial integrity, what has been frequently stated by high politicians, or to rely on the measures of soft security, focusing on the development of EU-orientated energy policy that has a positive impact on Azerbaijan‘s internationals prestige. Moreover, maybe a „third way“, enabling Azerbaijan to reach both abovementioned goals at the same time, exists? In this research paper, using the conceptions of relational and structural powers, the factors of Azerbaijan‘s security balance are analysed and suggestions on the stabilisation of the country‘s security situation are provided.