According to Western experts the energy prices decline on the world market forced the Azerbaijani government to cut spending on the defense industry, which once again confirms the dependence of the country's economy on oil and gas resources.
The Azerbaijani economists considered that the fall in the price of oil by $ 1 would entail a deficit in the state budget amounting to about $ 7.6 million (at the current exchange rate). So according to the results of May 2017 oil production in Azerbaijan amounted to 3.3 million tons, which is compared to May 2016 as a production declination rates of 276,000 tons.
In general the results of January-May 2017 oil production in the country amounted to 15.9 million tons, which is 1.6 million tons (9.2%) less than for the corresponding period of 2016.
Average daily oil production in Azerbaijan taking into account the agreements with the Organization of Petroleum Exporting Countries (OPEC) in January 2017 amounted to 793.9 thousand barrels in February - 776.4 thousand, in March - 733.3 thousand, in April -781.1 thousand, in May - 785.3 thousand barrels of oil. Thus Azerbaijan fully fulfilled its obligations to reduce daily production at the level of 35 thousand barrels within the framework of the agreements.
Officially adopted in December 2017 the state budget for 2018 provides for the price of oil at $ 45 per barrel comparing with last year's figure of $ 40.
According to the budget of 2018 and the official data of the Ministry of Economy and Finance the total expenditure on national security amounted to about $ 2.4 billion. This includes army and law enforcement agencies expenditures (about $ 1.6 billion), which is 19, 5% of the total budget.
Based on the statistics it can be seen an increase in spending on national security by 5.2% while the increase in military spending was 3.7% compared to 2017, which is three times higher than military spending in neighboring Armenia ($ 512 million).
Now the main problem for Baku is making necessary payments on previously concluded contracts.
So in 2018 Azerbaijan and Russia will complete a major contract 2010 including the supply of new infantry fighting vehicles BMP-3. The development of the military arsenal of Azerbaijan in recent months was connected with the main goal: elimination of the military and political consequences of the transfer of Iskander systems to Russia of the Armenian Armed Forces. This direction was laid down in autumn 2016, when the 2nd international arms exhibition "ADEX-2016" was held in Baku. At the exhibition there was announced the decision to balance Armenian "Iskander" with the help of joint production with Ukraine of the "Grom-2" complexes by the military and political Azerbaijan leaders.
However the condition of the economy and the military-industrial complex of Ukraine does not give possibilities for any positive expectations in this matter.
Also, the Azerbaijan leaders is considering the possibilities of military-technical cooperation with such countries as Turkey, Israel, Pakistan and Belarus in the attempt to create parity in operational-tactical missile systems.
In July 2017 during the visit of the commander of the Air Force of Azerbaijan Lieutenant-General R. Tahirov to Islamabad a contract was signed for the purchase of Pakistan's initial training training aircraft "MFI-395" ("Super-Mushshak").
In September 2017 the Azerbaijani Defense Minister visited the city of Tel-Aviv and held talks with the Israeli Defense Ministry A. Liberman on the supply of air defense systems "Iron Dome", which was tested by Israel in the fight against the rockets of the movement Hezbollah and Hamas.
Israeli air defense complexes production are planned to be located on the outskirts of Baku, near the city of Ganja, the Baku-Tbilisi-Ceyhan oil pipeline and the Mingechaur hydroelectric power station (which in case of the next aggression from Azerbaijan was threatened to destroy the Armenian side).
In October 2017 after the visit of the Azerbaijani Defense Minister Z. Hasanov to Minsk the media reported on the deliveries of the Belarusian multi-launch fire systems "Polonaise" to Azerbaijan, which are inferior to the Iskander according to military experts of Azerbaijan.
Thus the prices rise for oil and gas resources in the world market will create favorable conditions for the defense policy of Azerbaijan. According to some military experts of the CIS countries Azerbaijan will strive to strengthen its armed forces as far as possible and continue building up its military potential through military-technical cooperation with such countries as Turkey, Israel, Pakistan and Belarus focusing primarily on the Nagorno- Karabakh conflict as well as to compete with the CIS countries and countries of the Caspian region.