Could the war in Iran lay a path for peace between Armenia and Azerbaijan?

The Iran war is adding impetus to reconciliation efforts between Armenia and Azerbaijan, as the region seeks to position itself as a new trade corridor between Europe and energy-rich central Asia, with the conflict highlighting Europe's energy dependency on the volatile Middle East.

Addressing the European Parliament earlier this month, Armenian Prime Minister Nikol Pashinyan declared that, with the Iranian conflict on its border, efforts would be stepped up to realise a trade route with Azerbaijan. 

The United States-brokered TRIPP project, negotiated by United States President Donald Trump last August, is seen as key to reconciling the two countries, after decades of conflict over the disputed Nagorno-Karabakh enclave. 

With both Armenia and Azerbaijan bordering Iran, the conflict is providing a powerful impetus for cooperation.

“This war in Iran has fostered much more of a localised regional identity where, despite the wars and the conflicts of the last several decades, Armenia, Turkey, and Azerbaijan are actually banding together,” said Richard Giragosiyan, director of the Regional Studies Center, a think tank based in the Armenian capital, Yerevan.

“Now is the one opportunity for consolidating regional connectivity in terms of trade and transport."

Life after ruin: Aghdam's fragile rebirth after the Nagorno-Karabakh conflict

'The Trump Road'

Pashinyan and Azerbaijan’s President Ilham Aliyev signed the TRIPP agreement as part of a peace deal, committing to unimpeded connectivity between mainland Azerbaijan and the exclave of Nakhchivan, via Armenian territory.

The new trade route is expected to become part of what is dubbed the “Middle Corridor”, linking energy-rich Central Asian countries to Europe via Turkey.

Tehran strongly opposes the initiative, as the corridor offers an alternative to transiting through Iran to Central Asia. However, the Iran war has further curtailed Tehran's diminishing influence in the Caucasus.

“We also shouldn't forget the benefits of the Iran war,” said Turkey analyst Atilla Yesilada of the New York-based Global Source Partners consultancy. “They [Ankara] want a weak Iran so that they can expand their footprint in the South Caucasus against Iran.”

Yesilada says the fallout from the Iran war underscores the importance of the TRIPP agreement – or, as it's sometimes dubbed in Turkey, the “Trump Road" – which is key to Ankara's economic goals. 

“We get the Trump Road because nobody would want to traverse Iran under these conditions,” explains Yesilada, “And you get [a] not immediate but gradual, but permanent, development boost from trade and investment along that route.”

US takes lead in Caucasus peace deal as France is pushed aside

A new route for Europe

The Middle Corridor is seen as an opportunity for Europe to diversify in terms of energy supply from the volatile Middle East.

“The most obvious security lesson [from the Iran war] is diversity,” said Tatiana Mitrova, a research fellow at the Center on Global Energy Policy at New York's Columbia University.

"The real jewel is Turkmenistan's gas, the third largest [supply] in terms of the world’s resources. I believe that there will be a lot of discussions about the middle corridor both in the region and in Europe.”

However, Mitrova remains cautious about the project's viability, saying: "Economically it's not attractive – too many risks and too low margins.”

The Caucasus is sandwiched between Russia’s war in Ukraine and the Iran conflict, raising questions over how secure any new energy route to Europe would be. These come alongside reservations over the viability of the billions of euros of investment needed, at a time when Europe is seeking to transition away from fossil fuels. 

“The problem with the Brussels policy is they don't want to invest in hydrocarbons, they don't invest in gas,” said Farid Shafiyev, chairman of the Baku-based Center of Analysis of International Relations.

Frenchman convicted for spying in Azerbaijan, sentenced to ten years

Opportunity for peace

However, Shafiyev argues that, in addition to providing an alternative energy supply for Europe, there is an opportunity to build on the current momentum for peace. 

“There is some hostility remaining... but overall, the feeling [is] we don't want any new war and conflict in the South Caucasus. And indeed, [there is] a sort of window of opportunity to bring this alternative route, including for energy and gas."

Interdependency in trade, and with it economic prosperity, is seen as key to strengthening the rapprochement between Armenia, Azerbaijan and their Turkish neighbours.

It’s a rapprochement that could also be vital to resisting any future threat from Russia, which is seeking to reassert itself in the region. However, such threats of renewed instability could also prove a major obstacle to any large-scale infrastructure investment by Europe.