Iran is finding it increasingly challenging to maintain its balanced approach in the Caucasus. Fresh developments keep jiggling Tehran’s diplomatic scales.
Two major developments in recent years – Azerbaijan’s reconquest of Nagorno-Karabakh and Russia’s unprovoked invasion of Ukraine – created new diplomatic openings for Iran. The changed geopolitical environment has enabled Iran and Azerbaijan to smooth over what for much of the post-Soviet period had been a prickly relationship. At the same time, Iran’s traditionally tight ties with Armenia are coming under increasing strain. But both bilateral relationships remain prone to sudden twists.
In March, the foreign ministers of Iran and Azerbaijan, Hossein Amir-Abdollahian and Jeyhun Bayramov, met on the margins of the meeting of the Organization of Islamic Conference in Saudi Arabia, agreeing on a return of Azerbaijani diplomatic personnel to Tehran. Baku had withdrawn its diplomats after an armed attack on the embassy in early 2023 that left an Azerbaijani citizen dead. (An Iranian court has reportedly sentenced the main suspect to death as a price for a full resumption of diplomatic ties.)
The diplomatic reengagement occurred not long after Baku and Tehran lanced another boil of tension, signing an agreement last fall to construct a rail link known as the Aras corridor. The route will connect mainland Azerbaijan to its Nakhchivan exclave via Iranian territory. Azerbaijan had earlier sought to build a more direct route, known as the Zangezur corridor, by securing extraterritorial rights from Armenia. Iran had opposed Zangezur out of concern it would create a barrier to Iranian-Armenian trade.
While Iranian-Azerbaijani relations are presently on a roll, Iranian-Armenian ties have hit some potholes.
On the same day in March that the Azerbaijani and Iranian foreign ministers were restoring full diplomatic relations, Armenia’s defense minister, Suren Papikyan, visited Tehran for meetings with top Iranian officials, who delivered a firm warning that Yerevan should not grow too close to “extra-regional parties.” The phrasing was a clear reference to Yerevan’s recent cultivation of security ties with Western powers, including as France and United States. Armenia’s Prime Minister Nikol Pashinyan acknowledged tensions with Tehran.
Other geopolitical factors are pushing Tehran and Yerevan in divergent directions. First, tensions in the Middle East connected with the Israel-Hamas conflict have raised the possibility of a widening of warfare to involve Iranian allies and perhaps even Iran itself. This has prompted Tehran to hedge risks by taking steps to ensure calm on its northern border. Given Azerbaijan’s close security relationship with Israel, the last thing Iran needs is an opening of another front – all the more so as Baku’s hawkish allies in Washington and Jerusalem have consistently sought to weaponize Iran’s sizeable Azeri population against Tehran.
Armenia also has experienced a rapid deterioration in relations with Russia, due to the widespread perception of Armenians that Moscow failed to live up to its security commitments to Yerevan during the most recent phase of the Karabakh conflict. As a result, Armenia is striving to diversify its foreign partners, in particular Western powers.
Armenia’s recently voiced intention to apply for membership in the European Union stands to be a lasting irritant in Yerevan’s ties to Tehran. The accession process would require Armenia to make major changes to bring its foreign policy into alignment with Brussels. Among such requirements would be the scrapping of Armenia’s visa-free regime with Iran, and the reorienting of Yerevan’s trade away from the Moscow-led Eurasian Economic Union, with which Iran has signed a free trade agreement.
The souring of Armenian-Russian relations sharply contrasts with Tehran’s own strengthening ties with Moscow, a trend driven in part by the development of the North-South trade route, which helps Russia mitigate the impact of Western sanctions. The expansion of such trade encourages closer cooperation between Iran and Azerbaijan to facilitate the transit of Russia-bound goods.
As two heavily sanctioned countries, Iran and Russia are drawn together by a sense of “inter-pariah solidarity”. Iran has supplied Russia with drones that the latter deployed against Ukraine. In exchange, Iran expects Russia to play a vital role in an upgrade of its air defense systems. In 2023, Russia overtook China as the main foreign investor in Iran. Conversely, prospects for Iran’s engagement with the West have diminished.
Despite the warming Baku ties and the diplomatic knuckle-rap of Yerevan, it would be premature to assume that Tehran is intent on altering its Caucasus policy to firmly…