zerbaijan and Iran have had a rocky relationship over the years. To this day it remains unclear if the two neighboring countries genuinely want to develop close economic ties or if they are preparing for a potential large-scale conflict that may also involve other actors. Add in Azerbaijan’s close relationship with Israel and Iran’s large ethnic Azerbaijani population, and the relations between Azerbaijan and Iran look even more tenuous. As these two countries try to manage their bilateral ties, their relations with other countries in the region may be at risk.
Occasional tensions between the two Shiʿa Muslim-majority nations is nothing new. On October 1 2021, Iran assembled thousands of soldiers along the Azerbaijani border as part of a large military drill. This followed joint military exercises held by Azerbaijan, Turkey, and Pakistan in mid-September.
Iranian political leadership is worried not just about the alliance between Azerbaijan and Turkey, but also about the growing Israeli influence in the region. Despite being a majority Shiʿa Muslim country, Azerbaijan has developed close economic and military ties with Israel—Tehran’s archenemy. Baku has been a reliable client of Israeli-made weapons systems for years. It is not a secret that Israeli-made drones played a very important role during the 44-day war between Azerbaijan and Armenia—resulting in the energy-rich nation’s victory.
The Israeli military is now reportedly hoping to use Azerbaijan’s territory in case of a war with Iran. However, Baku has assured Tehran that “nothing against the national interests of the Islamic Republic of Iran will happen from the territory of Azerbaijan.” This is a clear sign that the Caucasus nation is trying to ease tensions that have been growing since late August when Azerbaijani semi-official sources openly said that “the time has come for Southern Azerbaijan to secede from Iran,” and that “Southern Azerbaijan is striving for independence.”
South Azerbaijan, also known as Iranian Azerbaijan, is a home to about 30 million ethnic Azerbaijanis—around 16% of the overall population of the Islamic Republic of Iran and three times the population of neighboring Azerbaijan. Indeed, in the case of a potential conflict between Iran and Israel, Baku could use ethnic Azerbaijanis to destabilize the Islamic Republic to assist Israel. Quite aware of this, Iran is trying to avoid any confrontation with Azerbaijan and to preserve the status quo in the region.
To this end, Tehran has repeated on several occasions that it supports the peaceful settlement of the conflict between Azerbaijan and its historic rival Armenia over Nagorno-Karabakh region based on the "principles of international law.” Iran also supports Azerbaijan’s territorial integrity and sees Nagorno-Karabakh as an integral part of the Caucasus nation. At the same time, the Islamic Republic insists that it will not tolerate any territorial changes in the region and that Armenia’s territorial integrity is a “red line.” It was, therefore, not surprising when Iran’s supreme leader Ayatollah Ali Khamenei warned against Baku’s alleged attempts to block the Iranian-Armenian border.
Both Tehran and Yerevan believe that Baku could forcibly open a corridor to its exclave of Nakhchivan—passing through southern Armenia along the border with Iran, something that was agreed upon in the 2020 Russia-brokered ceasefire deal between Azerbaijan and Armenia. Yerevan, however, fears that the Nakhchivan corridor—also known as the Zangezur corridor—will be a territory where the Armenian authorities will have little to no say, with no passport or customs controls. Although Iran has repeatedly said that it is not against the construction of the Nakhchivan corridor, Tehran would unlikely support a creation of the transportation route that would violate Armenia’s territorial integrity. More importantly, if Azerbaijan manages to build a land corridor through Armenia, Iran could be further isolated in the region.
In order to remain an important actor in the South Caucasus region, Tehran needs to be involved in the construction of any future transportation networks in the region. Officials from Tehran, Baku, and Moscow have recently held a tripartite meeting and discussed regional transportation corridors. In particular, the North-South International Corridor—a project that allows rail transit of goods from India and the Persian Gulf countries to Azerbaijan, Russia, and Eastern and Northern Europe. Iran is also building a bridge in Astara, near the border with Azerbaijan, aiming to increase the volume of trade going through the Caucasus nation.
However, at present, economic relations between the two countries remain modest. In 2021, Azerbaijan’s exports to Iran only totaled $43.3 million, while Azerbaijani imports from Iran were $397.5 million—representing approximately 1.3% of Azerbaijan’s total trade that year. On the other hand, trade between Azerbaijan and Israel totaled $928.4 million in 2021—more than double the total trade with Iran—and placing Israel among Azerbaijan’s top five export markets.
Despite Iran’s efforts to build closer ties with Azerbaijan and sever its links with Israel in an effort to maintain the regional status quo, Azerbaijan may not view this in their interest. For Azerbaijan, military, economic, and political cooperation with Israel will almost certainly maintain priority over its ties with Iran. However, Baku will likely seek not to jeopardize its relations with Tehran. With tensions already high in the region, Azerbaijan and Iran are likely to continue to engage with one another and deepen their connections, but not at the cost of other key bilateral relations.
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Iran and Azerbaijan: Regional Rivals or Economic Partners?
Photo via Pixabay.
September 16, 2022
It is unclear if Azerbaijan and Iran want to develop close economic ties or if they are preparing for a potential large-scale conflict. As these two countries try to manage their bilateral ties, their relations with other countries in the region may be at risk, writes Nikola Mikovic.
A
zerbaijan and Iran have had a rocky relationship over the years. To this day it remains unclear if the two neighboring countries genuinely want to develop close economic ties or if they are preparing for a potential large-scale conflict that may also involve other actors. Add in Azerbaijan’s close relationship with Israel and Iran’s large ethnic Azerbaijani population, and the relations between Azerbaijan and Iran look even more tenuous. As these two countries try to manage their bilateral ties, their relations with other countries in the region may be at risk.
Occasional tensions between the two Shiʿa Muslim-majority nations is nothing new. On October 1 2021, Iran assembled thousands of soldiers along the Azerbaijani border as part of a large military drill. This followed joint military exercises held by Azerbaijan, Turkey, and Pakistan in mid-September.
Iranian political leadership is worried not just about the alliance between Azerbaijan and Turkey, but also about the growing Israeli influence in the region. Despite being a majority Shiʿa Muslim country, Azerbaijan has developed close economic and military ties with Israel—Tehran’s archenemy. Baku has been a reliable client of Israeli-made weapons systems for years. It is not a secret that Israeli-made drones played a very important role during the 44-day war between Azerbaijan and Armenia—resulting in the energy-rich nation’s victory.
The Israeli military is now reportedly hoping to use Azerbaijan’s territory in case of a war with Iran. However, Baku has assured Tehran that “nothing against the national interests of the Islamic Republic of Iran will happen from the territory of Azerbaijan.” This is a clear sign that the Caucasus nation is trying to ease tensions that have been growing since late August when Azerbaijani semi-official sources openly said that “the time has come for Southern Azerbaijan to secede from Iran,” and that “Southern Azerbaijan is striving for independence.”
South Azerbaijan, also known as Iranian Azerbaijan, is a home to about 30 million ethnic Azerbaijanis—around 16% of the overall population of the Islamic Republic of Iran and three times the population of neighboring Azerbaijan. Indeed, in the case of a potential conflict between Iran and Israel, Baku could use ethnic Azerbaijanis to destabilize the Islamic Republic to assist Israel. Quite aware of this, Iran is trying to avoid any confrontation with Azerbaijan and to preserve the status quo in the region.
To this end, Tehran has repeated on several occasions that it supports the peaceful settlement of the conflict between Azerbaijan and its historic rival Armenia over Nagorno-Karabakh region based on the "principles of international law.” Iran also supports Azerbaijan’s territorial integrity and sees Nagorno-Karabakh as an integral part of the Caucasus nation. At the same time, the Islamic Republic insists that it will not tolerate any territorial changes in the region and that Armenia’s territorial integrity is a “red line.” It was, therefore, not surprising when Iran’s supreme leader Ayatollah Ali Khamenei warned against Baku’s alleged attempts to block the Iranian-Armenian border.
Both Tehran and Yerevan believe that Baku could forcibly open a corridor to its exclave of Nakhchivan—passing through southern Armenia along the border with Iran, something that was agreed upon in the 2020 Russia-brokered ceasefire deal between Azerbaijan and Armenia. Yerevan, however, fears that the Nakhchivan corridor—also known as the Zangezur corridor—will be a territory where the Armenian authorities will have little to no say, with no passport or customs controls. Although Iran has repeatedly said that it is not against the construction of the Nakhchivan corridor, Tehran would unlikely support a creation of the transportation route that would violate Armenia’s territorial integrity. More importantly, if Azerbaijan manages to build a land corridor through Armenia, Iran could be further isolated in the region.
In order to remain an important actor in the South Caucasus region, Tehran needs to be involved in the construction of any future transportation networks in the region. Officials from Tehran, Baku, and Moscow have recently held a tripartite meeting and discussed regional transportation corridors. In particular, the North-South International Corridor—a project that allows rail transit of goods from India and the Persian Gulf countries to Azerbaijan, Russia, and Eastern and Northern Europe. Iran is also building a bridge in Astara, near the border with Azerbaijan, aiming to increase the volume of trade going through the Caucasus nation.
However, at present, economic relations between the two countries remain modest. In 2021, Azerbaijan’s exports to Iran only totaled $43.3 million, while Azerbaijani imports from Iran were $397.5 million—representing approximately 1.3% of Azerbaijan’s total trade that year. On the other hand, trade between Azerbaijan and Israel totaled $928.4 million in 2021—more than double the total trade with Iran—and placing Israel among Azerbaijan’s top five export markets.
Despite Iran’s efforts to build closer ties with Azerbaijan and sever its links with Israel in an effort to maintain the regional status quo, Azerbaijan may not view this in their interest. For Azerbaijan, military, economic, and political cooperation with Israel will almost certainly maintain priority over its ties with Iran. However, Baku will likely seek not to jeopardize its relations with Tehran. With tensions already high in the region, Azerbaijan and Iran are likely to continue to engage with one another and deepen their connections, but not at the cost of other key bilateral relations.
