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Overconfidence Costs Iran Influence in the South Caucasus

Amid mass protests gripping its major cities, Iran’s relations with the states in its immediate neighborhood have steadily deteriorated. Under mounting international pressure and criticism for its increasingly apparent alignment with Russia over its unprovoked invasion of Ukraine, Tehran has turned to the South Caucasus, where its influence has declined significantly in recent years. In the months following the 2020 Nagorno-Karabakh war, Iran neglected to reassert its influence in the South Caucasus, prompting Azerbaijan—engaged in a long geopolitical dispute with Tehran—to pursue closer engagement with Turkey, Russia, and to some extent Israel. Unlike Turkey and Russia, Iran’s main competitors in the Caucasus, it failed to secure a seat at the peace negotiations between Baku and Yerevan—effectively relegating it to bystander status in its own backyard.

Blundering Brinkmanship

Facing the growing influence of a Baku-Ankara-Tel Aviv axis, Tehran finds itself isolated without any effective tools to deter the expansion of this trilateral grouping. As such, on October 20, 2022, the ground forces of the Islamic Revolutionary Guard Corps (IRGC)held massive military exercises in the immediate vicinity of Iran’s border with Azerbaijan. These exercises were framed as a repetition of drills Iran conducted in October 2021; officials in Tehran stated that “the drills were “not directed against neighboring states.” However, unlike during the drills’ previous iteration, Azerbaijan did not hide its dissatisfaction with the recent exercises,  and Baku began to openly criticize Tehran and its disposition toward Baku. Iran’s war games have thus proven a dangerous miscalculation; in an effort to extract concessions from Azerbaijan, the Islamic Republic may have jeopardized what influence it still retained in the South Caucasus.

Although the 2021 war games can largely be attributed to Azerbaijan’s close partnerships with Turkey and Israel, the current saber-rattling appears to be a reaction against Baku’s efforts to establish a land route between the mainland and its western exclave of Nakhchivan, further linking to Turkey through Armenia’s Syunik province. From Tehran’s point of view, such an ambitious corridor project could undermine its partnership with Armenia—a long-time strategic partner—and isolate Iran throughout the region. Although Azerbaijani diplomats have provided guarantees to Iran that the corridor would be used strictly for commerce, these assurances have done little to assuage Iranian concerns.

So far, Iran’s attempts to intimidate Azerbaijan into abandoning the corridor project have yielded few results. To patch up relations between Baku and Tehran, the Iranian and Azerbaijani foreign ministers held a phone conversation on October 30 to discuss “policy issues and regional security,” during which Iranian foreign affairs minister Hossein Amir-Abdollahian informed his Azerbaijani counterpart of Iranian Parliament Speaker Mohammed Bagher Ghalibaf’s upcoming visit to Azerbaijan. According to Abdollahian, the speaker’s visit boded well for bilateral relations between the two states, and, this trip to Baku may be seen as Iran’s first real attempt to de-escalate tensions with its neighbor after years of antagonism.

However, these efforts failed spectacularly. Shortly after the phone call, Iranian President Ebrahim Raisi invited his Azerbaijani counterpart Ilham Aliyev to visit Tehran. Wary of Iranian intentions, officials in Baku declined to immediately accept the invitation, prompting Ghalibaf to “postpone” his visit to Baku amid growing public outrage. To make matters worse, Azerbaijan’s state security services carried out a counterintelligence operation in the country in early November, arresting 19 citizens allegedly linked to Iranian spy networks who had been trained in Syria. Shortly after the incident, 5 more people were arrested for spying for Iran that inflamed the tensions even more. As a result, Iran summoned Azerbaijani ambassador twice to protest, while Iranian Foreign Ministry Spokesman Nasser Kanani said that no one has the right to misunderstand Iran’s policy and encouraged regional states “to abstain from any provocation against Tehran.”

Baku Looks Elsewhere

By exacerbating tensions with Azerbaijan, Iran appears to have sought to gain leverage over Baku in order to pry policy concessions from its neighbor. This effort has clearly backfired. In 2021, Iran flexed its muscles through military exercises, but Azerbaijan responded by boosting defense ties with Turkey, signing a new defense deal with Israel, and pivoting to Central Asia to establish a new multilateral cooperation body that does not include Iran. It also launched military drills of its own along its border with Iran, prompting anger from Tehran. The second round of diplomatic standoff in 2022 reportedly resulted in Azerbaijan’s agreement to establish an embassy in Israel—a move that Baku had long delayed in order to avoid angering Iran and other Muslim countries. However, the combination of the Abraham accords and Iran’s aggressive rhetoric rendered Baku’s balanced approach toward Tehran obsolete.

In the near future, relations between Baku and Tehran will likely remain tense. There exists little willingness to reconcile from either side, and Azerbaijan’s ambition to establish an embassy in Israel further complicates Baku’s relationship with the Islamic Republic. Given this, further deterioration in bilateral ties can be expected as Azerbaijan curries favor with Iran’s sworn enemies. The two countries’ partnership may not yet be extinct, but it is critically endangered.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Fuad Shahbazov is a policy analyst covering regional security issues in the South Caucasus. He is a former research fellow at the Center for Strategic Studies of Azerbaijan and a former senior analyst at the Center for Strategic Communications, also in Azerbaijan. He has been a visiting scholar at the Daniel Morgan School of National Security in Washington, DC. Currently, he is undertaking an MSc in defense, development and diplomacy at Durham University, UK. He tweets at: @fuadshahbazov.

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