Iran Does Not Want to Pay Price For Armenia–Azerbaijan Peace Agreement

Executive Summary:

• The August 8 U.S.-mediated meeting between Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan launched the Trump Route for International Peace and Prosperity (TRIPP), granting Azerbaijan direct land access to its Nakhchivan exclave via Armenian territory and symbolically sidestepping disputed corridor names.
• Iran cautiously welcomed the Armenia–Azerbaijan peace pledge but voiced strong opposition to U.S. involvement in the TRIPP, citing fears of containment, disruption to Iran–Armenia trade routes, and reduced strategic relevance of its Aras Corridor project.
• U.S.-mediated normalization of Armenia–Azerbaijan relations could diminish Armenia’s reliance on Russia, strengthen Western ties, and reshape South Caucasus geopolitics, while simultaneously undermining Iran’s energy leverage in the region and exposing it to new regional alignments.

Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan’s August 8 meeting at the White House, mediated by U.S. President Donald Trump, resulted in a joint pledge to pursue peace and the formation of the Trump Route for International Peace and Prosperity (TRIPP) (see Strategic Snapshot, August 13). The route grants Azerbaijan direct land access to its landlocked exclave, Nakhchivan, via Armenian territory. Officially naming the TRIPP for a mediating third party rather than choosing between Baku’s name, the “Zangezur Corridor,” or Yerevan’s, the “Crossroads of Peace,” represents a small but symbolically significant step forward for Azerbaijan–Armenian relations (see EDM, August 12, September 8).

Armenia and Azerbaijan’s joint pledge to pursue peace has raised serious concerns for their southern neighbor, Iran. The Iranian Foreign Ministry has ostensibly welcomed a peace deal between Azerbaijan and Armenia, saying that peace and stability in the Caucasus benefits all countries in the region. The ministry, at the same time, has expressed concern over the adverse effects of foreign intervention at common borders (Islamic Republic News Agency, August 9). This so-called “foreign interference” refers to U.S. mediation of the TRIPP agreement and U.S. companies’ anticipated involvement in the construction and management of the corridor. “Common borders” refers to the 40-kilometer (approximately 25-mile) border between Iran and Armenia. Iran appears concerned that U.S. involvement in the construction of the route will threaten its transit on the Iran–Armenia border.

Tehran is also concerned that handing over construction and control of the TRIPP to American companies is part of the United States’s desire to encircle and contain Iran. This concern has intensified after the 12-day Israeli–Iranian war and the United States’s bombing of Iran’s nuclear facilities on June 21. Ali Akbar Velayati, an advisor to Iran’s Supreme Leader Ayatollah Ali Khamenei, has led the chorus of official Iranian voices criticizing the TRIPP, claiming that it will turn into a “graveyard” for “Trump’s mercenaries” and expressing concern about how increased U.S. presence in the region will impact Iran’s interests (Iranian Diplomacy, August 12). Pashinyan’s political opposition in Armenia has also voiced its support for Iranian opposition to the TRIPP. The deal to grant Azerbaijan access to its Nakhchivan exclave through Armenian territory has stirred uncertainty and concern in Yerevan, with some Armenians viewing it as a concession imposed under external pressure or even as a threat to their country’s sovereignty (Armenian Weekly, August 13).

During Iranian President Masoud Pezhakian’s visit to Armenia on August 19, Armenian officials assured that the implementation of the project to provide Azerbaijan with access to Nakhchivan would not pose a threat to the common border between Iran and Armenia, nor to transit between the two countries (Al Jazeera, August 19). In an interview with Saudi Arabia’s Al Arabiya channel, Aliyev said, “There have been a lot of rumors in some media and on some internet sites that Azerbaijan is planning to occupy Zangezur, or that Azerbaijan is planning to cut the Iranian-Armenian border. That was absolutely false” (Aze Media, August 27).

Iran is focusing on three issues regarding Azerbaijan’s route to Nakhchivan through Armenia. First, Iran seems wary about an access route that passes through southern Armenia, adjacent to the Iranian border. Iran expects that any Nakhchivan access route with U.S. involvement to be as far away as possible from the border between Iran and Armenia to ensure the privacy and security of Iranian territory. Second, the TRIPP will intersect the Iran–Armenia, north–south highway, which Iranian companies are helping construct (Orbeli Analytical Research Center, May 2). Iran wants assurances that no interference or restrictions on Iran–Armenia trade occur at this intersection. From a technical-engineering perspective, building an overpass or underpass could resolve this concern. Third, Iran has emphasized that a route for Azerbaijan to access Nakhchivan via Armenia should be under the jurisdiction of the Armenian government (Iran International, August 19). According to the August 8 agreement in Washington, however, the responsibility of security and supervisory control of the TRIPP will fall to U.S. companies (see EDM, August 12, September 8). Iran wants to ensure that the United States’s monitoring and inspection of the TRIPP will not extend to the Iran–Armenia transit route and will not create restrictions or challenges for transit, trade, or the passage of citizens between the two countries (Islamic Republic News Agency, August 9).

The geopolitical and economic consequences of Azerbaijan’s direct access to Nakhchivan from Armenian territory seem inevitable for Iran. If the TRIPP is built and implemented, the advantages of the “Aras Corridor” will be reduced. Following the capture of Karabakh by Azerbaijani forces in September 2023, Iran and Azerbaijan agreed to establish a transit route called the “Aras Corridor.” It is intended to pass through the Iranian province of East Azerbaijan and connect the village of Aghband in the southwestern corner of the Zangilan District in Azerbaijan to the city of Ordubad in southern Nakhchivan (Tasnim News Agency, October 7, 2023). The “Aras Corridor,” which includes highway and rail routes, bypasses Armenia and is currently under construction (see EDM, January 10, November 18, 2024). The implementation of the TRIPP may sideline the Aras Corridor. The revival of the Soviet-era railway route from Julfa to Nakhchivan after the recent agreement between Armenia and Azerbaijan, however, could reduce the TRIPP’s negative transit consequences for Iran, reconnecting Iran to the South Caucasus and Russia’s railway network after three decades (Baku Dialogue, Fall 2022).

The TRIPP will give Nakhchivan access to mainland Azerbaijani gas, electricity, oil, and fiber optics, which will reduce Nakhchivan’s dependence on energy imports from Iran. The Igdir–Nakhchivan gas pipeline, which opened on March 5, will also give Nakhchivan access to Turkish natural gas  (Daily Sabah, March 5). The TRIPP also increases the ease of implementing the Trans-Caspian project, which would send Turkmen gas to Azerbaijan, Türkiye, and Europe via the Caspian Sea, creating another alternative to Iranian gas exports to Türkiye.

Normalization of Armenia’s relations with Azerbaijan and Türkiye could also further reduce Armenia’s dependence on Russia (see EDM, May 6). Relations between Armenia and Russia have been cooling since the Second Karabakh war in 2020 (see EDM, February 9, November 6, 2023, March 5, August 5, 2024, January 28). Armenia has declined to participate in the meetings and exercises of the Collective Security Treaty Organization (CSTO) led by Russia, and Russian border guards and security forces have left Armenia’s border with Iran and the Yerevan airport as of January 2025 (see EDM, August 5, 15, 2024). The process of Armenia’s divergence from Russia could intensify after a final peace agreement between Armenia and Azerbaijan and the fulfillment of its three main preconditions, which include the demarcation of borders between Armenia and Azerbaijan, the dissolution of the Minsk Group, and an amendment to the Armenian constitution regarding territorial claims to Azerbaijan (see EDM, July 17). The withdrawal of Russian border guards from the Iranian border, the closure of two Russian military bases in Yerevan and Gyumri, and Armenia’s withdrawal from the CSTO are highly likely, which could lead to stronger cooperation between Armenia and the West.

Iran likely does not see the warming of relations between Armenia and Azerbaijan as beneficial, especially since Azerbaijan has very close relations with Israel (see EDM, July 12, 2024, March 26). Unprecedented coldness and tension in relations between Azerbaijan and Russia may also factor into Azerbaijan–Iran relations as new coalitions form. The South Caucasus moving closer to the West and distancing itself from Russia could represent a regional paradigm shift that would be geopolitically detrimental to Iran.

Russia’s return to a policy of traditional balancing in the South Caucasus following the end of the Kremlin’s war against Ukraine or an Armenian opposition party rising to power in the June 2026 parliamentary elections could reverse the paradigm shift taking place in the region. Currently, however, Iran’s focus is on ensuring that Azerbaijan’s access route to Nakhchivan does not threaten Iranian interests on the Iran–Armenia border.