This article compares how oil revenues affect social expenditures in Kazakhstan and Azerbaijan. It aims to identify the mechanisms through which hydrocarbon receipts pass from sovereign funds and the state budget to education, health, and social protection programmes; assess the stabilisation role of the two oil funds; and develop measures that can improve the sustainability of social financing. The study covers 2015-2025 and uses a comparative case-study design, documentary analysis, and descriptive statistics. Evidence from the IMF, World Bank, UNDP, OECD, ILO, the National Bank and Ministry of Finance of Kazakhstan, the State Statistical Committee of Azerbaijan, and SOFAZ was triangulated. The results show that sovereign oil funds cushion fiscal shocks in both countries, but persistent reliance on transfers may weaken non-oil revenue mobilisation and incentives to improve spending efficiency. In Kazakhstan, discretionary National Fund transfers, and in Azerbaijan, large SOFAZ transfers to the state budget, link the sustainability of social commitments to the oil cycle. The article’s originality lies in tracing the fund-budget-programme-outcome chain while avoiding causal claims based on simple co-movement. Policy recommendations focus on strengthening fiscal rules, increasing non-oil revenues, expanding performance-based budgeting, and linking resource transfers to measurable human-capital outcomes.