Author: Alexander Latsabidze
Today, the South Caucasus represents one of the most active arenas where global and regional interests intersect, with regional and international powers competing for influence. Despite the increased involvement of Western countries, the role of the Islamic Republic of Iran remains significant. Tehran tries to maintain political and economic influence in the region, although the strengthening of Western positions poses a strategic challenge for it.
On August 8, 2025, in Washington, D.C., the Prime Minister of Armenia and the President of Azerbaijan signed a joint declaration with the mediation of the President of the United States: the Washington Declaration. This laid the foundation for the implementation of a new corridor, “the Trump Route for International Peace and Prosperity (TRIPP)” which aims to deepen regional ties, open transport and energy corridors, and strengthen economic cooperation in the South Caucasus.
Under this agreement, Azerbaijan gains the opportunity to establish direct access to its exclave, Nakhichevan, through a transit corridor on Armenian territory. This agreement not only serves to restore bilateral relations but also leads to a significant geopolitical shift. Once implemented, Russia and Iran’s influence in the region will likely diminish, while the positions of the United States and the West will strengthen, marking a shift in the regional balance of power.
The Armenia–Azerbaijan Conflict and the Peace Process
The Armenia-Azerbaijan conflict, centered on Nagorno-Karabakh, originated even before the collapse of the Soviet Union. The first war was fought between 1988 and 1994 and ended in Armenia’s favor. The second, in 2020, concluded with an Azerbaijani victory, marking a major shift in the regional power balance. By 2023, Azerbaijan had established full control over Nagorno-Karabakh.
In 2024, the peace process gained renewed momentum when Armenia agreed to hand over four border villages to Azerbaijan. Although widely interpreted as a gesture of de-escalation, the decision generated significant domestic political tensions within Armenia. In 2025, one of the key issues that arose concerned potential amendments to Armenia’s Constitution. The preamble of the current constitution references the 1990 Declaration of Independence, affirming Armenia’s commitment to the unification with Nagorno-Karabakh, which Azerbaijan interprets as implying territorial claims over Nagorno-Karabakh. Despite internal opposition, Prime Minister Nikol Pashinyan announced his readiness to pursue constitutional reform and announced plans to hold a referendum for 2027.
The normalization of Armenian-Azerbaijani relations is dependent on the finalization and signing of the peace treaty. The text of the treaty was finalized in March 2025 and initiated in Washington in August but does not hold legal standing until the signing and ratification. Until then, several issues remain unresolved: border delimitation and demarcation, constitutional reform in Armenia, and Azerbaijan’s demand for a transport corridor linking its mainland with Nakhchivan. If fully implemented, the agreement is poised to effect a fundamental transformation of the South Caucasus by fostering a just, comprehensive, and enduring peace grounded in the principles of sovereignty, territorial integrity, and mutual respect. Its preamble reflects both sides’ readiness to build good-neighborly relations and overcome historical animosity, a development that may mark a new era of regional cooperation. The agreement is expected to increase U.S. and Western influence, consolidate Turkey’s position, strengthen its connection to strategically vital Central Asia, and significantly weaken Russia’s and Iran’s roles in the region.
Iran’s Strategic Interests and the “Trump Route for International Peace and Prosperity” (TRIPP)
The development of transport corridors holds particular importance for Iran’s strategic vision, particularly the TRIPP corridor, connecting Azerbaijan to Nakhichevan through Armenian territory. From Iran’s point of view, this project will reduce its hold over the region, whereas Azerbaijan and Turkey view it as a mechanism to enhance trade and connectivity.
Iran argues that if the corridor falls under the influence of external powers, particularly the United States and its partners, Tehran would face exclusion from the regional process. This would entail a reduction of its geopolitical leverage, and limit strategic capabilities within the South Caucasus region. Therefore, Iran has brought forth its own alternate initiative, the North-South Transport Corridor, which would connect Russia to the Persian gulf. This route carries not only economic but also geopolitical significance for Iran, allowing it to maintain strategic influence within Eurasian transit networks and avoid regional isolation.
Officially, Iran supports peace and dialogue, however in practice, it opposes any mediation that could weaken its influence. Iran’s regional strategy centers on preserving the balance of power, ensuring national security, protecting economic interests, and maintaining its geopolitical status.
Iran’s position on the Armenia-Azerbaijan conflict has always been shaped by both geopolitical and historical factors, given that the country shares borders with both states and regards the South Caucasus as part of its strategic neighborhood. The region represents a security zone where foreign interference is considered unacceptable, particularly when it involves actors such as the United States and Israel. A key concern for Tehran relates to Azerbaijan’s growing partnership with Israel, which is viewed as a direct challenge to Iran’s national security. Given that Israel is regarded as a strategic adversary, the strengthening of Israeli positions near Iran’s borders is perceived as a serious threat.
Despite many historical disagreements, today Iran’s and Russia’s interests are aligned, particularly in limiting Western influence and maintaining the status quo in the region. Both states seek to prevent the establishment of a new geopolitical architecture that would weaken their regional role.
Iran-Armenia Relations
In the South Caucasus, Armenia is considered one of Iran’s key strategic partners. Iran and Armenia have traditionally maintained close ties. The countries have cooperated over decades in multiple areas: energy, trade, and infrastructure. In the energy sector, the “gas-for-electricity” agreement is in operation, where Iran supplies natural gas to Armenia, and Armenia returns electricity.
In terms of infrastructure, the North-South road corridor project is underway. Following its completion, the distance between the Iran-Georgia border will be reduced to approximately 556 kilometers, which will significantly reduce travel time. This will facilitate better access to Black Sea ports for both Armenia and Iran.
The new regional reality, which involves the normalization of relations between Armenia and Azerbaijan and the creation of a new transport corridor, has drawn particular attention from Iran. In 2025, during an official visit to Yerevan, Iranian President Masoud Fezeshkian emphasized Tehran’s desire to deepen economic and transport cooperation with Armenia. The Iranian side expressed concern over the creation of a new corridor that could reduce Iran’s regional role, finding it unacceptable to Iran that Washington might use the TRIPP corridor for military purposes. Iran’s Foreign Minister, Abbas Araghchi, told the IRNA that Armenian officials had assured Tehran that Armenia recognizes Iran’s “red lines” and will not allow its territory to be used against the Islamic Republic.
Iran-Azerbaijan Relations
On a historical and cultural level, Iran and Azerbaijan share deep ties. The number of ethnic Azerbaijanis living in Iran reaches approximately 20 million, and the majority of the populations of both countries are Shia Muslim. Economically, the countries cooperate in transport and energy infrastructure, including the International North–South Transport Corridor (INSTC), which connects India, Iran, and Azerbaijan to Russia. For Azerbaijan, Iranian territory represents the only direct transit route toward the Persian Gulf and Pakistan, with whom Baku maintains close strategic partnerships. In turn, Azerbaijan is a vital transit route, allowing Iran to establish overland connections not only with the Caucasus and Russia but also with Europe. This transit route allows Iran to strengthen trade relations and gain economic benefits.
Despite the cultural connections between the two countries, Iran-Azerbaijan relations are rather complex. Azerbaijan’s close cooperation with Turkey and especially with Israel is considered a security challenge by Tehran. It is categorically unacceptable to Iran that Azerbaijani territory be used by the U.S. and Israel for activities directed against the Islamic Republic.
Conclusion
The 2025 agreement reached in Washington has brought a notable shift in the balance of power across the South Caucasus. The agreement creates an opportunity for establishing real lasting peace but simultaneously raises new challenges. U.S. mediation and the strengthening of Western positions substantially reduce the traditional influence of Russia and Iran. In such a changing environment, analyzing the strategic position of the Islamic Republic of Iran becomes increasingly important. For Iran, the primary objective is to adapt to the new reality without losing its historically established positions. Accordingly, the future of the South Caucasus largely depends on the extent to which Armenia and Azerbaijan are able to implement an agreed peace agenda. Iran supports regional stability but does not agree with external mediation that could serve to reduce its influence in its geopolitical space.