Explainer: Azerbaijan, Iran and the crisis in the South Caucasus

As Baku revives talk of territorial expansion, protests across Iran continue, and Azeris blockade the only road connecting the breakaway republic of Nagorno-Karabakh to Armenia, tensions in the South Caucasus are again high.

Since an Iranian gunman last week killed the head of security and injured two other guards in an attack on Azerbaijan’s embassy in Tehran, Azerbaijan has evacuated embassy staff and their families, urged its citizens against travel to Iran, and arrested 39 people accused of sabotage and promoting propaganda for Iran.  

Media sources affiliated with Azerbaijan’s government have blamed the Iranian government for the attack and aired the views of Israeli analysts who claim the attack was retaliation by Tehran for Baku’s recent moves towards opening an embassy in Tel Aviv.  

The attack certainly comes after years of escalating tensions between Azerbaijan and Iran. 

Iran held war games on its border with Azerbaijan in the Octobers of 2021 and 2022 that included conducting heliborne operations and launching a pontoon bridge across the Aras River, which forms much of the border between the two countries. After both sets of war games, Azerbaijan held joint military drills with Turkey, its close ally, close to the Azerbaijan-Iran border.  

At first glance, it may seem puzzling that Azerbaijan and Iran – two of the world’s four predominantly Shia Muslim countries and both home to millions of ethnic Azeris – have a largely adversarial relationship.  

A closer look at their culture and politics can offer answers. 

Iran and Azerbaijan’s complicated relationship 

While both the Republic of Azerbaijan and the Islamic Republic of Iran are largely Shia, after seven decades of Soviet state atheism, Azerbaijan is a largely secular country where fasting and participation in religious services are uncommon.  

Nominally shared religion alone isn’t enough to meaningfully guarantee friendly relations between the two neighbours, nor are large co-ethnic populations. 

The northwest of Iran is home to the largest region of Iranian Azerbaijan. Azeris are the largest minority ethnic group in Iran, and some estimates suggest there are twice as many Azeris living in Iranian Azerbaijan as in the Republic of Azerbaijan itself. Both present-day Azerbaijan and Iranian Azerbaijan were controlled by Persia until 1828, but decades of Soviet emigration restrictions cut many ethnic Azeris in the USSR off from their kin in Iran.  

Nevertheless, Iran has been wary of Azerbaijani irredentism for decades. An unrecognised, pro-Soviet Azerbaijan People’s Government existed as a separatist state in northern Iran for 13 months during the 1946 Iran Crisis. Shortly after the Republic of Azerbaijan declared independence from the USSR in 1991, Abulfaz Elchibey, its president from 1992 to 1993, called for a ‘Greater Azerbaijan’ including lands now recognised as parts of Armenia and Iran. Elchibey’s comments alienated Iran in a crucial period of the First Karabakh War.  

Azerbaijan has developed a close relationship with Iran’s regional rival, Turkey, and archnemesis, Israel. Azerbaijan has purchased arms and billions of US dollars worth of sophisticated weapons systems from Israel. As many Azerbaijanis frequently travel into and out of Iran, the Israeli intelligence agency Mossad reportedly uses Azerbaijan as a hub for spying on Iran.  

There are also strong cultural ties between Azerbaijan and Israel. Azerbaijan has historically had a large community of Mountain Jews, many of whom have emigrated to Israel but have family remaining in Azerbaijan. Shtetls were predominantly Jewish villages common throughout Central and Eastern Europe before the Holocaust; the last surviving shtetl, Qırmızı Qəsəbə, is in Azerbaijan. 

In response to Azerbaijan’s deepening ties with Israel, Iran has increasingly grown close to Armenia. Iran may have facilitated the provision of arms to Armenia in the Second Karabakh War in 2020 and reportedly stopped an Azerbaijani advance. Armenia’s deputy foreign minister credited “Iranian actions and statements” with preventing larger scale conflict between Azerbaijan and Armenia in September 2022. 

Competing regional powers 

After violence in September 2022 along Armenia’s border with Azerbaijan left 300 dead, Yerevan asked the Russia-led Collective Security Treaty Organisation (CSTO) to come to its defence against Azerbaijan. When the organisation refused – Russia and Belarus are preoccupied with the war in Ukraine and CSTO states in Central Asia are too friendly with Baku to intervene against it – a new scramble for influence began in the South Caucasus.  

The European Union launched a new observer mission to Armenia’s border with Azerbaijan. Prague hosted peace talks between Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev that included French President Emmanuel Macron and European Council President Charles Michel. The United States  also hosted Azerbaijan-Armenia talks in Washington. 

Despite Pashinyan’s scathing public criticism of the CSTO at a summit in Yerevan in November, Russia has continued to play a role in the peace process. Russian President Vladimir Putin hosted Pashinyan and Aliyev in Sochi for talks. In the 2020 ceasefire agreement that ended the Second Karabakh War, Putin, Pashinyan, and Aliyev agreed that Russian peacekeepers would secure the Lachin Corridor, the only road connecting Nagorno-Karabakh and Armenia.  

Nagorno-Karabakh is internationally recognised as Azerbaijan but inhabited predominantly by Armenians.

However, since mid-December 2022, Azerbaijanis have blocked the Lachin Corridor in an apparent move to de-legitimise Russia and force Karabakh Armenians to move to Armenia as supplies of basic goods dwindle. 

Another sticking point is Azerbaijan’s desire to open a so-called ‘Zangezur Corridor’ through the Zangezur region in Armenia’s southern Syunik Province to provide unimpeded access and transit between the main body of Azerbaijan and its exclave, the Nakhchivan Autonomous Republic.  

Currently, the border between Azerbaijan and Armenia remains closed, so Azerbaijanis and goods travelling between Nakhchivan and the rest of Azerbaijan must cross into and then out of Iran. A Zangezur Corridor would also open an uninterrupted Middle Corridor trade route between members of the Organisation of Turkic States (OTS) by connecting Turkey to Central Asia via Azerbaijan and the Caspian Sea.  

Article 9 of the 2020 ceasefire agreement reads, “The Republic of Armenia shall guarantee the security of transport connections between the western regions of the Republic of Azerbaijan and the Nakhchivan Autonomous Republic in order to arrange unobstructed movement of persons, vehicles and cargo in both directions”.  

Azerbaijan holds that this entitles it to an extra-territorial corridor.  

Aliyev has called the realisation of the corridor a “historical necessity” and has threatened to take it “by force”. Pashinyan said he had “ruled out” an extra-territorial corridor, saying it was a “redline”.  

Iranian Foreign Minister Hossein Amir-Abdollahian visited Armenia to open a consulate general in the Syunik Province’s city of Kapan in October to supplement Iran’s embassy in Yerevan. The Zangezur Corridor would run along what is now the Armenia-Iran border, and Amir-Abdollahian said at the consulate opening that any change to the border was a “redline” Iran would take “all steps to resist”. 

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Mutual dependency 

Iran depends on an open border with Armenia to move exports from the Persian Gulf to the Black Sea. Iran’s only other main route to trade goods to Europe runs through its regional rival, Turkey. Iran currently has leverage over Turkey by offering it additional access to Turkmenistan and other Asian countries via overland trade, but a Zangezur Corridor would facilitate increased Middle Corridor traffic across the Caspian Sea that entirely bypasses Iran.  

Iran has an interest in maintaining amiable enough relations with Azerbaijan to allow its continued trade with Russia, through Azerbaijan. Iran and Russia are both heavily sanctioned by the US and EU, and the International North–South Transport Corridor through Azerbaijan allows them an alternative shipping route to the Suez Canal.  

It remains to be seen, however, if Iran and Azerbaijan can de-escalate and repair their relationship. As protests against the government continue across Iran, media affiliated with the Azerbaijani government has called for ‘South Azerbaijan’ – that is, Iranian Azerbaijan—to secede.  

At an OTS summit in November 2022, Aliyev said: “The state of Azerbaijan pays special attention to the protection of the rights, freedoms and security of Azerbaijanis living abroad. We will continue our efforts so that our compatriots, who were separated from the state of Azerbaijan due to bitter fate, preserve our language, traditions, and culture, remain loyal to the ideas of Azerbaijanism, and never cut ties with their historical homeland”. 

On November 11, 2022, Baku summoned the Iranian Ambassador to Azerbaijan and Tehran summoned the Azerbaijani Ambassador to Iran over the issue of escalating propaganda. 

Last week, the Iranian Ambassador was again summoned by Baku after the attack on Azerbaijan’s embassy in Tehran. 

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