The Russian-brokered peace deal between Armenia and Azerbaijan that ended the countries’ six-week war has altered the region’s geopolitics significantly, and to Iran’s detriment. 

Azerbaijan and its president, Ilham Aliev, are the clear winners. Baku regained several of the towns and cities in Nagorno Karabakh, the region it had lost to Armenia during their successive wars between 1989 to 1994. Azerbaijan’s losses at the time were largely due to infighting among various political groups that competed orientation — to the point of sabotaging the country’s own military efforts — over the newly-independent republic’s future identity and external orientation.  

In the following decades, recovering lost territories became Azerbaijan’s national goal, the foundation of its identity, and the basis of its leaders’ legitimacy. The centrality of Karabakh in Azerbaijan’s politics made any territorial compromise politically impossible. Now, having regained some of those lost territories, Aliev, who inherited his presidency from his father, has consolidated his position. 

Relying on its larger population and greater resources, notably abundant supplies of oil and gas, Azerbaijan played the long game against Armenia. In addition to enabling Baku to build up its military forces with modern weaponry, sale of its energy wealth gave Baku far more international heft. Coveting these riches, Western powers did not help Armenia, although the U.S. Congress in 1992 used Section 907 of the Freedom Support Act to ban direct aid to Azerbaijan only to effectively lift it by granting waiver authority to the White House 10  years later.

Azerbaijan conducted an astute foreign policy. It aligned itself with the West and Turkey and forged close ties with Israel, while maintaining workable relations with Moscow. Baku used its proximity to Iran to market itself as a barrier to Tehran’s regional influence even as it pursued its own irredentist objectives vis-a-vis the Iranian province of Azerbaijan towards the ultimate goal of a Greater Azerbaijan. 

Armenia was the clear loser in the latest conflict. It lost territories in Karabakh and part of its border with Iran. That border served as Armenia’s only outlet to the outside world during the 2008 Russo-Georgia war since Turkey had closed its frontier with Armenia shortly after the Soviet Union’s dissolution. If Armenia now loses the narrow corridor that connects the Karabakh enclave to mainland Armenia in Lachin, as provided in the peace deal, it would find itself surrounded by Azerbaijan and Turkey, except for its northern border with Georgia.

Turkey’s Gains in a Long Game

Since the Soviet collapse in 1991, Turkey has seen itself as the center of a new Eurasia and the leader of the wider Turkic world well beyond the Caucasus and into Central Asia. It has tried to achieve these goals under both secular and Islamist leaders. The lack of a common border with Azerbaijan had been a major obstacle to that objective.

Indeed, Azerbaijan has been a key part of Ankara’s long-term strategy. With the war, Ankara, with the West’s tacit blessing, has succeeded in integrating Baku more closely into its cultural, economic, and security sphere of influence. Now, with Azerbaijan territorially linked to Nakhicevan, an Azeri enclave along Iran’s northern border and within Iran’s territory, Ankara will be able to project power into Iranian Azerbaijan and beyond. These changes could enable Turkey to achieve its long-term goal of gaining land access to Central Asia through Iran and achieving its Eurasianist dreams. Turkey’s support for Baku and for Azeri separatists in Iran has been part of this strategy. Its performance during the war has also bolstered its credibility in the neighborhood as a reliable ally.

Israel Also a Winner

Azerbaijan has been useful to Israel in its  dispute with Iran by providing Israel with a foothold on Iran’s northern border. Israel has in turn supplied arms to Baku, including drones and is sympathetic to Baku’s idea of a Greater Azerbaijan. Despite their strong antipathy toward Turkish President Recep Tayyip Erdogan, Israel’s U.S. supporters in the Congress and  Washington think tanks, such as the Hudson Institute and the Foundation for Defense of Democracies, spoke out publicly in favor of Azerbaijan during the war. Israel, too, has proven its value as an ally to Baku. 

Russia’s Damaged Credibility

Compared to Turkey, which provided all-out diplomatic support, arms and even mercenaries from Syria, Russia has proved a less reliable ally to Armenia, a fact which could have long-term implications for Moscow’s regional influence and may yet prompt Yerevan to reassess its membership in the Russian-led Collective Security Organization. While Moscow’s diplomacy in this case succeeded in averting more bloodshed and preventing a wider regional conflict, it also confirmed that Moscow no longer has the last word in the southern Caucasus. Conversely, Turkey must now be seen as a stronger competitor.

Iran, Another Big Loser

In the early 1990s, Iran had opportunities to establish significantly more influence for itself in the region. With its two-thousand-year history of interaction with present-day Armenia and Azerbaijan, Iran has always exerted a strong cultural influence in both countries. It has also offered geopolitical advantages, including providing access for both to the Persian Gulf.

But Tehran’s obsessive anti-Americanism, its irrational animosity toward Israel, and its early promotion of an Islamic Revolution in Azerbaijan effectively excluded it from the region’s politics and economic development. While Tehran portrayed itself as an impartial mediator and cultivated friendly relations with both Yerevan and Baku, it ended up alienating both. 

Baku has used Tehran’s openness to expand its influence in Iranian Azerbaijan, while promoting anti-Iran and anti-Persian propaganda. Yerevan has similarly largely ignored Iran’s concerns as some Armenian politicians preferred, perhaps naively, to cultivate Ankara’s affections. Iran now finds its interests mostly ignored in the latest peace deal. Indeed, Moscow appeared to privilege its relationship with Ankara, and, in so doing, effectively humiliated Tehran. 

The deal has in fact worsened both Iran’s security and economy. By linking Azerbaijan to Nakhicevan and hence Turkey, it has enhanced the two countries’ ability to interfere in Iranian Azerbaijan. And if Iran loses its border with Armenia, it could find itself dependent on Turkey and Azerbaijan for land trade with the region and Europe. 

Iran may finally be waking up to the new threats from the north. Fars New Agency, which is  affiliated with the Islamic Revolutionary Guards Corps (IRGC), wrote about the risks of the new Caucasus’ peace deal for Iran. Articles appearing in reformist sites like IR Diplomacy have warned of the dangers of pan-Turkism. In the future, Iran will have to pay closer attention to its northern borders and adopt a more proactive policy in the region, including towards Azerbaijan. Tehran could also reassess its neglect of Turkey’s activities in both Azerbaijan and in its own Azerbaijan province, fully recognizing that Ankara’s declarations of friendship may mask a strategy designed to undermine Iran’s position in the region. This realization will likely produce new tensions in Turkish-Iranian relations.

Logically, the way Iran was treated should also prompt it to reassess its ties with Moscow. For years, Russia has taken Iran for granted. Unfortunately, however, so long as Iran remains estranged  from the West, it will be very difficult to reconsider its Moscow connection.