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Iran Must Deal with A New Status Quo in the South Caucasus

There is a new status quo in Nagorno-Karabakh. Following six weeks of bloody conflict in this mountainous region internationally recognized as Azerbaijani territory but inhabited by an ethnically Armenian majority, leaders reached a truce on November 9. This peace deal, brokered by Moscow,  involves sending Russian troops as peacekeepers on the ground for years to come. Although Iran is usually surrounded by U.S. troops, this will probably be the first time since the dissolution of the U.S.S.R. that Russian troops have maintained a significant presence near Iranian borders. While not a foreign adversary, Russia is nonetheless another superpower encroaching on areas central to Iran’s national security interests. That Russia managed to negotiate a settlement — with Turkish involvement — between Iran’s feuding neighbors before Tehran could do so itself sends mixed signals about the regional potential for cooperation versus competition. Whatever the case, it is clear that Iran must now adjust its regional plans to adapt to this new development, or else risk losing influence in a conflict bordering its northern provinces.

A Lasting Peace?

The terms of the new peace deal called for an immediate ceasefire, with which both sides have thus far been compliant. Armenia and Azerbaijan will each maintain control of any territories currently occupied by their forces, which means that Azerbaijan will retain the southern 15-20% of the region that it has retaken in recent months, including the key town of Shusha. To ensure that the ceasefire holds, a Russian military force consisting of nearly 2000 personnel, dozens of armored personnel carriers, and hundreds of other mobile units will be present to monitor the armistice for at least the next five years. Additionally, Armenian forces are to surrender several districts still under their control to Azerbaijan by the end of the year — although those deadlines have proven flexible amidst a mass exodus of Nagorno-Karabakh’s Armenian populace. The territorial changes will extend Azerbaijan’s control along much of Iran’s northern border. That the changes along the border with Iran were agreed upon without input from Iran itself has prompted concern over the changing geopolitical status of Iran’s northern borders from Islamic Revolutionary Guard Corps (IRGC) officials.

Beyond the immediate consequences of the peace deal, the region’s energy trade depends on a return to stability. Three major pipelines pass through Azerbaijan into Georgia just north of the Nagorno-Karabakh region, and are crucial energy corridors for Azerbaijan, Turkey, Russia, and Kazakhstan. It is hoped that the Russian presence will prevent a repeat of the attacks on the BTC Pipeline that allegedly occurred in October. However, the new Azerbaijani Southern Gas Corridor is considered a threat to Russia’s own exports to Turkey and Europe, meaning that Moscow may have unannounced incentives for its increased military presence in the Caucasus.

Iran’s Response

Despite these concerns, the official Iranian response to this new peace deal appears to be positive and welcoming. President Rouhani announced that “The Islamic Republic of Iran expresses satisfaction over the decision made by the leaders of the two countries mediated by Russia to end the military operations and start the process of diplomatic settlement.” However, this new development is a far cry from Ayatollah Khomeini’s stance in a November 7th speech that “of course, all Azerbaijani territories occupied by Armenia should be freed. All these lands should be given back to Azerbaijan.” With Russian peacekeepers on the ground, it is unlikely that Azerbaijan will be able to take control of the remaining territories by force. Still, Rouhani has also stated that they “will spare no efforts for de-escalating the tensions and establishing stable and fair security in that region for the sake of stability and peace,” thus signaling Iran’s continued interest in involving itself in the long-term mediation process alongside Russia.

Since the new peace deal does not include any components regarding future negotiations to reach a final settlement for the dispute over Nagorno-Karabakh, there remain significant opportunities for Iran to act as a third-party mediator. The close relationship between Tehran and Moscow suggests the possibility of a joint effort, but begs the question of why Iran wasn’t included in the initial settlement. Iranian denouncement of the Minsk Protocol and the interference of non-regional actors has made it clear that Iran seeks to exclude Western powers from any future negotiation efforts. Should Turkey attempt to act as a peacekeeper alongside Russia — a possibility which Russia has been quick to reject — it would become much more difficult for Iran to operate alongside such a significant regional competitor.

As all signs indicate that the truce will likely hold. Tehran will probably view closer relations with Baku in its national interest, despite that it was excluded from the truce negotiation and implementation, and ethnic Azeris in northern Iran continue to express widespread support for Baku. Religious leaders led the charge asking the Iranian government to back Azerbaijan when the conflict erupted on September 27. Now that Azerbaijan controls more territories bordering Iran, the two countries have more impetus to further improve economic ties and increase the flow of people and goods. However, the close relationship between Azerbaijan and Israel will be a particularly tense topic in Iranian-Azeri relations. Israeli defense technology contributed to Azerbaijan’s military success in the recent hostilities, which enabled Azeri advances in Nagorno-Karabakh for the first time in nearly thirty years. Further, Azerbaijan’s historic struggle to maintain independence from Iran’s influence has long conflicted with the Islamic Republic’s regional agenda, especially in regards to the role of religion in society. Worse yet would be the revival of historic calls for ethnically Azeri Iranians to break away from the regime. Though this is unlikely to occur, it would add even more fuel to the mass protests against the government seen in recent years.

An Opportunity for Iran

Ultimately, Iran must walk a fine line between Russia’s stronger position in the conflict on its borders, nurturing its ties with Azerbaijan, and the possible internal challenge from Iranian Azeris. At the same time, Tehran is facing increased competition for regional influence from Russia in Armenia and Turkey in Azerbaijan. Therefore, Tehran must engage with its neighbors carefully, but substantially. If Iran successfully presents itself as a secondary mediator to the Nagorno-Karabakh dispute, it stands to score a point and gain international goodwill at a time when its struggling economy desperately needs relief from Western sanctions.


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