Ethnic groups

Turkic-speaking Azerbaijanis (Azeris) make up some nine-tenths of the country’s population; the remaining population comprises only small concentrations of minorities—among them, Lezgians (who speak a Caucasian language), Russians, and Armenians. Ethnic Azerbaijanis combine in themselves the dominant Turkic strain, which arrived in Azerbaijan especially during the Oghuz Seljuq migrations of the 11th century, with mixtures of older inhabitants—Iranians and others—who had lived in Transcaucasia since ancient times. At the end of the 20th century, about 13 million Azerbaijanis lived abroad, most of them in Iran.

At the beginning of the 21st century, the population of the Azerbaijani exclave of Naxçıvan (lying wholly within Armenia) was almost entirely ethnic Azerbaijani, whereas the enclave of Nagorno-Karabakh (lying wholly within Azerbaijan) was predominantly ethnic Armenian. In the Soviet era there were several disagreements regarding the status of the two territories’ placement. After a number of reversals, the Soviet government provided that Naxçıvan was to be recognized as an Autonomous Soviet Socialist Republic (A.S.S.R.) with close ties to Azerbaijan, while Karabakh was to remain within the Azerbaijan S.S.R. but with significant autonomy. In the early 1920s the region, including its mountainous zone, was confirmed as the Nagorno-Karabakh Autonomous Oblast.

Settlement patterns

Slightly more than half the population lives in urban areas. The most densely populated region is the Abşeron Peninsula, on the western coast of the Caspian Sea. Baku, Azerbaijan’s largest city and the most important industrial city in Transcaucasia, is located on this peninsula, as are other industrial towns, including Sumqayıt. Baku is a large and attractive city situated on natural terraces running down to a gulf of the Caspian Sea. The city has a 2-mile- (3.2-km-) long picturesque boulevard and many historic sites.

Other areas of dense population occur in certain lowland and foothill regions. Gäncä is the second largest town and the main urban center of the interior.

The highest density of rural population is found in Länkäran and Masallı in the southeast. The Talysh, or Talishi—Iranian people who form the bulk of the local population—have preserved many of their old customs and traditions.

In the late 1980s sizable Azerbaijani and Armenian populations were driven from each other’s countries as a result of ethnic conflict and disputes over the Nagorno-Karabakh region. In addition, full-scale combat in the early 1990s, as well as territorial expansion by the ethnic Armenians within Azerbaijan, resulted in the displacement of a significant number of Azerbaijanis. Conflict between Armenians and Azerbaijanis over Nagorno-Karabakh, which persisted into the 21st century, was complicated by an official declaration of independence by the Republic of Nagorno-Karabakh in 1992 (a claim that failed to gain recognition from the international community).

Language

The Azerbaijani language is a member of the West Oghuz group of the southwestern (Oghuz) branch of the Turkic languages. The literary tradition dates to the 15th century. The Arabic script was used until the 20th century; the Cyrillic alphabet was introduced in 1939. In 1992 the Azerbaijani government switched from the Cyrillic to the Roman alphabet as its official orthography.

Religion

Azerbaijan is a predominantly Muslim country; more than three-fifths of the population is Shiʿi, and about one-third is Sunni. Members of the Russian Orthodox or Armenian Orthodox Church constitute a very small percentage of the population.

Demographic trends

Azerbaijan has a growing and youthful population. The birth and death rates of Azerbaijan are both slightly below the global average. Life expectancy is about the same as the global average, however, about 73 years of age. More than one-fifth of the population is under 15, while approximately half the population is under 30.

Resources and oil industry

Azerbaijan was the birthplace of the oil-refining industry. Baku, whose first oil wells were drilled in the 1840s, is considered the world’s first oil town. At the beginning of the 20th century Baku’s oil field was the largest in the world, and Azerbaijan was the world’s leading petroleum producer. In 1901, for example, Azerbaijan produced 11.4 million tons of oil, more than the United States; it accounted for more than half of world production. As the 20th century progressed, however, Azerbaijan’s role in oil production decreased as the industry developed in other regions of the U.S.S.R. and elsewhere in the world. During the 1990s exploitation of the vast oil fields under the Caspian Sea was complicated by political instability in Azerbaijan, ethnic conflict throughout the region, Russian claims on the Caspian fields, and disputes over the location of new pipelines. But in 1994 the State Oil Company of Azerbaijan (SOCAR) signed contracts with more than a dozen international companies, facilitating the development of the oil industry. The opening of the Caspian-Mediterranean (Baku-Tbilisi-Ceyhan) oil pipeline in 2005 enabled the large-scale delivery of petroleum to the global market from the landlocked country, leading to an exponential climb in oil production. At its peak in 2010, Azerbaijani oil production exceeded 1,000,000 barrels per day. Production steadily decreased to slightly more than 600,000 barrels per day in 2025, a decline that was offset by gains in natural gas production.

Azerbaijan has other natural resources, including natural gas, iodobromide waters, lead, zinc, iron, and copper ores, nepheline syenites utilized in the production of aluminum, common salt, and a great variety of building materials, including marl, limestone, and marble.

Agriculture

Azerbaijan’s agriculture developed considerably in the latter part of the 20th century. Almost half of the country’s total area is suitable for agriculture, and some two-fifths of this is under cultivation.

Grain is the leading agricultural product, with raw cotton the second most valuable crop. Favorable conditions for grapes have contributed to the development of viticulture. Most of the grape varieties grown in Azerbaijan are used for making wine, almost all of which is exported. Other crops include vegetables (particularly early varieties), fruits, walnuts, and hazelnuts. Some districts, particularly those around the cities of Şäki, Zaqatala, and Göyçay, are—as they have been traditionally—engaged in silkworm breeding.

High commodity output is not characteristic of Azerbaijan’s animal husbandry.

Azerbaijani fisheries are of particular importance because of the sturgeon of the Caspian Sea; sturgeon roe is made into internationally renowned caviar. Sturgeon stocks are being depleted, however, as a result of pollution of Caspian waters.

Industry

Azerbaijan has a diversified industrial base, with the leading branches of heavy industry—power, manufacturing, and chemical production—predominating. Branches of the processing industry, producing mineral fertilizers, gasoline, kerosene, herbicides, industrial oils, synthetic rubber, and plastics, have developed, and Sumqayıt has emerged as the major center of this industry, as well as of ferrous metallurgy.

The country’s manufacturing industries have grown considerably in the late 20th century. Azerbaijan manufactures equipment for the oil and gas industry, electrical equipment of all kinds, and many appliances and instruments. This type of industry is located mostly in Baku, Gäncä, and Mingäçevir.

Light industrial manufactures include cotton and woolen textiles, knitwear, traditional household items and souvenirs, footwear, and other consumer goods. Şäki, Xankändi, Gäncä, Mingäçevir, and Baku are the main centers of this industry. Food-processing plants are distributed fairly evenly throughout the republic.

The development of Azerbaijan’s industry created a demand for fuel and power supplies. All electricity is produced at thermoelectric power stations burning fossil fuels, which have been built throughout the country.