The preparations for the pipeline’s construction started in 1994. On 8 March 1996, the President of Azerbaijan, Heydar Aliyev, and the President of Georgia, Eduard Shevardnadze, agreed on the establishment of Baku–Supsa pipeline. The trilateral contract was signed between Azerbaijan International Operating Company, the State Oil Company of Azerbaijan Republic (SOCAR) and the Government of Georgia. In the same year, the lead contract of the project was awarded to Kværner. The pipeline was completed in 1998, and an inauguration ceremony occurred on 17 April 1999. The total cost of the construction of the pipeline and terminal were US$556 million.

Oil shipments over the pipeline were halted on 21 October 2006 after abnormalities were revealed during an inspection of the pipeline. Subsequent repair and replacement efforts included replacing and re-routing pipeline sections near Zestaponi in Georgia and the Kura River crossing in Azerbaijan. Also several defects of the Soviet-era pipeline sections were repaired. In total, the repair work cost US$53 million. Oil shipments resumed in June 2008.

After a major explosion and fire, which closed the Baku–Tbilisi–Ceyhan pipeline on 6 August 2008, the Baku–Supsa Pipeline was used to re-route Azeri oil deliveries. On 12 August 2008, BP closed the pipeline temporarily for the safety reasons because of the South Ossetia conflict. In the summer of 2012, the pipeline was down a month for a maintenance.

In July 2015 Russian troops demarcating the de facto border of the self-proclaimed Republic of South Ossetia pushed forward the border line near the village of Orchosani, thereby taking control over a short length of the pipeline. Analysts suggest that this was a Russian reaction to dissuade Georgia from making further moves towards joining NATO. While conceding that the pipeline might need to be diverted in the future, SOCAR VP of investments and marketing Elshan Nasirov reportedly denied any near-term need for concern.

In January 2024, it was reported that Kazakhstan and Azerbaijan were in talks to potentially transport up to 3 mtpa of Kazakh oil originating from the Kashagan Oil Field through the Baku-Supsa pipeline. Furthermore, in April 2023, Azerbaijan had proposed to Kazakhstan the option of transporting up to 5 mtpa of oil. The parties discussed creation of a joint venture that would serve as the sole operator along this transit route, employing a unified tariff system, cost-effective transit options, and the utilization of innovative technologies.