US extends OFAC license for BP at Shah Deniz, helping keep Caspian gas flows to Europe stable

📌 The US has extended a special OFAC license allowing BP to continue operating the Shah Deniz gas field in Azerbaijan, one of the most important gas supply sources in the Caspian region. The move helps BP maintain operations despite the project’s links to sanctioned partners from Iran and Russia.
🔎 Shah Deniz currently produces around 27–28 bcm of gas per year, equivalent to more than half of Azerbaijan’s total gas output. Most of this gas is exported to Europe through the Southern Gas Corridor, so the license extension is more about supply stability than creating an immediate price shock.
💡 The key point is that Washington is maintaining its sanctions stance, but applying flexibility to a project with strategic energy value. The payment mechanism through SOCAR allows BP to remain compliant while avoiding disruption to a gas source Europe needs as it continues reducing reliance on Russia.
⛽ For the market, the direct impact on gas prices may not be strong, but it helps reduce supply-risk pressure in Europe. If the EU faces less urgency to compete for spot LNG, Asian LNG markets could also benefit indirectly from lower import competition.
⚠️ The main risk remains geopolitical. If tensions with Iran or Russia escalate sharply, the license could be reviewed again, but in the near term, the base case still leans toward keeping Shah Deniz stable to avoid adding more pressure to the global energy market.
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