Armenia And Iran: A Vital Strategic Partnership – Analysis

“The Islamic Republic of Iran supports the territorial integrity and sovereignty of Armenia,” Iranian Foreign Minister Hossein Amir-Abdollahian said at a press conference on December 27, congratulating the Armenian people for the New Year and Christmas on behalf of the Iranian government and parliament.

“Iran has historical relations with neighboring Armenia, which continue to develop, deepen and reach a high level day by day. We held important talks with my Armenian colleague and Armenian Prime Minister Nikol Pashinyan about the necessity of establishing permanent peace in the South Caucasus and the role of Iran in that process, which can be a guarantee of stability and peace. We have a common opinion on various issues of cooperation”, added the Iranian Foreign Minister.

Thus, the strategic partnership between Iran and Armenia, which is becoming stronger every year, was once again highlighted. Although Iran is a Muslim Shiite country where the Sharia system is in force, and the Republic of Armenia is the only Christian country in the wider area of the Middle East, in the last three decades, a combination of specific historical and geopolitical circumstances has gradually created an important partnership that has a great impact on the geopolitical picture of Middle East and Caucasus.

Historical context

Armenian-Iranian relations have a thousand-year history and they can be described by peculiar phrases that some analysts state: “one civilization, two nations”, “one civilization, two states” and “one civilization, two religions”. Contacts between Persia and ancient Armenia date back to the Median Empire and the 6th century BC. The territory of modern Armenia was part of Qajar Iran until 1828, when it was forcibly ceded to the neighboring Russian Empire as a result of Iran’s defeat in the Russo-Persian War of 1826–28 and the Turkmenchay Agreement. Until the collapse of the USSR in 1991, Armenia remained under Russian control.

Tehran and Yerevan have enjoyed cordial relations since Armenian independence. The 44-kilometer-long Armenian-Iranian border is one of the oldest in the world and a symbol of friendship between the two nations. Today, there are no territorial disputes between the two countries. The Armenian minority in Iran, one of the largest and oldest communities in the world, enjoys the official recognition of the Iranian state and is the strongest minority community in the country. It has between 120,000 and 150,000 members, mostly in the capital, Isfahan, and in the northwest of the country.

The Armenian community is the largest Christian community in Iran, ahead of the Assyrian. Armenians have two representatives in the Iranian parliament and are the only minority with official observer status in the Expediency Discernment Council (decides whether laws conform to Sharia law). Many of the oldest Armenian churches and monasteries are located inside Iran, such as the Monastery of St. Stepanos, Monastery of St. Thaddeus and Chapel of Dzordzor. All objects are under the protection of UNESCO. Parthian and Persian had a huge influence on the Armenian language, which included many Parthian and Persian expressions.

During the First Nagorno-Karabakh War in the early 1990s, Iranian President Akbar Rafsanjani led the peace initiative. Thanks to Iranian efforts, negotiations between the two sides were held in Tehran in May 1992, but despite the agreement, peace efforts failed when Armenian troops captured the city of Shusha and Lachin in the same month. Although Iran has consistently asserted Azerbaijan’s sovereignty over the territory of Nagorno-Karabakh, in practice it has discreetly supported Armenian secessionists. This led to the split between Iran and Azerbaijan and the alliance between Iran and Armenia. Tehran chose Armenia because of the fear of Azeri irredentism towards Iranian Azerbaijan and pan-Turkism, which are phenomena that are a threat to Iran.

Economic cooperation

In addition to the important Iran-Armenia gas pipeline that was completed in 2006, the two countries have also implemented other large projects, such as the construction of two hydroelectric plants on the Aras River. During 2014, Iranian and Armenian energy ministers agreed to build a new transmission line from Armenia to Iran in line with efforts to strengthen energy ties. In June 2015, both countries agreed to begin construction of a third transmission line. In January 2021, Iran and Armenia signed a Memorandum of Understanding to expand trade relations. Trade between the two countries in 2021 amounted to 471 million USD. Armenian trade with Iran is equal to Azerbaijan’s trade with Iran. Despite the bad relations between Tehran and Buku, Iranian-Azerbaijani trade has grown in recent years.

Economic cooperation between Yerevan and Tehran is not a matter of choice, but a matter of necessity in difficult times. Bilateral trade is important for both countries because of their security. Iran is under Western sanctions and Armenia is under a trade blockade by Turkey and Azerbaijan since gaining independence in 1991. The Azeri explanation for the blockade is a territorial dispute over Nagorno-Karabakh, while the Turkish blockade has no explanation other than the obvious hatred of the Armenian people, as demonstrated by the Turkish genocide of the Armenians in 1914-1918. The only open borders of Armenia are with Iran and Georgia. If they were closed, Armenia would be completely isolated from the rest of the world. The Turkish blockade forces Armenia to rely on the Iranian transport network. Since Armenia’s export economy relies on agriculture and manufacturing, trade corridors through Iran are crucial.

Gas cooperation

An important goal of Iranian-Armenian cooperation is to reduce Armenia’s energy dependence on Russia. The two countries agreed in August to extend an existing agreement under which Armenia supplies Iran with electricity in exchange for natural gas supplies. This arrangement has been in place since 2009 and was due to end in 2026, but will continue, in an improved form, until at least 2030. However, the deal can be disrupted by Russia if it chooses because of Armenia’s turn towards the West and Prime Minister Pashinyan’s efforts to establish a better relations with the USA and the EU.

Armenians fear that the Russians could close their gas pipelines and that is why they want Iranian gas. Namely, the Iran-Armenia gas pipeline, which is intended to be used to reduce Armenia’s dependence on Russian gas, has been under the concession of the Russian gas giant Gazprom since 2015. Russia has the option of limiting the pipeline’s potential. Even during the design of the pipeline, Moscow insisted that its diameter be limited to 700 millimeters (down from the originally planned 1,420 millimeters) – to ensure that excessive amounts of Iranian gas are not resold to third countries. This technical modification limited the volume of the gas pipeline to 2.3 billion cubic meters per year. In the event that Western sanctions against Iran are lifted, Armenia would be a transit country through which Iranian oil and gas flow to Europe.

New projects and trade in Iranian Rials

In order to facilitate trade, the key cross-border highway that passes through the southern Armenian province of Syunik is currently being reconstructed. In October, the Armenian government awarded a $215 million contract to two Iranian companies (Abad Rahan Pars Iranian International Group and Tunnel Sadd Ariana) to do the work. When the reconstruction is completed, the highway will allow driving from the Armenian village of Agarak, on the Iranian border, 32 kilometers further to the north of Armenia through mountainous terrain over 17 bridges and through two tunnels.

“Armenia can play a key role within the North-South road corridor. I hope that the project will be implemented quickly”, said the Iranian Minister of Transport and Urban Development, Mehrdad Bazrpash. Iran and Armenia also discussed the construction of a new border bridge. The existing bridge on the Armenian-Iranian border was built in 1995 over the Aras River.

Bazrpash highlighted Armenia’s potential to access foreign markets through infrastructure projects in Iran’s regions on the Caspian Sea. He highlighted the strategic position of Iran as a transit route to facilitate the movement of Armenian goods. Iran will soon start trading with Armenia, Russia and Belarus in the national currency, the Iranian rial. The two countries have developed tourism cooperation in both directions.

The tragedy of the Karabakh Armenians and the silence of the international community

Just five days before Azerbaijani troops launched a military operation to end Armenian rule over Nagorno-Karabakh on September 19, 2023, the US acting assistant secretary of state, Yuri Kim, told the US Senate Foreign Policy Committee: “We will not tolerate any attack on the people of Nagorno-Karabakh.” Yet the Biden administration tolerated. After the Azerbaijani victory and the flight of 100 thousand Armenians, the State Department did nothing more than condemnation. The reason is that the United States is mostly concerned with the wars in Ukraine and Gaza. Azerbaijan’s lightning military action created a fait accompli. In addition, the geopolitical orientations of Azerbaijan and Armenia are different. Although Azerbaijan is an authoritarian non-democratic state, it is oriented pro-Western and pro-Israel, while Armenia, although a democratic state, is traditionally oriented pro-Russian and pro-Iranian. However, in recent years, since 2018, the pro-Western government of Nikola Pashinyan has started to turn towards the West and move away from Russia while maintaining good relations with Iran.

Iran was and remains a vocal supporter of the protection of Armenian minority rights in Azerbaijan. Iranians have condemned the flight of 100 thousand Armenians from Nagorno-Karabakh after the Azeri takeover of that region. “We believe that the rights of the people of Karabakh should be ensured. The rights of every person from Karabakh should be ensured. They must have the opportunity to exercise their rights. This is a reality that no one, including Azerbaijan, can ignore,” said Mehdi Sobhani, Iran’s ambassador to Armenia, in his recent interview. Although the ambassador did not reveal that Iran has any special policy towards Karabakh Armenians, the mere mention of Karabakh drew the ire of the Azerbaijani Foreign Ministry. Despite the nice words, Iranian diplomacy did not save the Karabakh Armenians who were under the 9-month economic blockade of the Lachin Corridor, nor did the Iranian Armed Forces intervene when the Azerbaijani offensive began.

The Azerbaijani threat and the Turkic world

Azerbaijan’s victories in the war with the Armenians in 2020 and 2023 brought new challenges for Armenia and Iran. The most important challenge is the growing influence of Turkey in the South Caucasus, which poses a threat to both countries. The Erdogan administration is pursuing neo-Ottoman and pan-Turkish policies with the aim of creating a Greater Turkey in the form of political control. Such expansionist Turkish foreign policy seeks to gather under the control of Ankara Turkish states from Azerbaijan to Central Asian states such as Kyrgyzstan, Uzbekistan, Turkmenistan, Kazakhstan. That is why the Organization of Turkish States was founded in 2009.

Although for now official Baku and Ankara avoid mentioning the north of Iran inhabited mostly by Azeris (Iranian Azerbaijan), in their long-term plans there is a clear intention to make that territory part of the Turkic world. Azeris live in Iranian provinces (East Azerbaijan, Ardabil, Zanjan, West Azerbaijan) and in smaller numbers in other provinces: Kurdistan, Qazvin, Hamadan, Gilan, Markazi and Kermanshah. Iranian Azeris also form a significant minority in Tehran, Karaj and elsewhere. There are between 12 and 23 million of them in Iran and they make up 16% of the population, which is more than the population of Azerbaijan – 10 million.

Although they have not yet rebelled against Tehran, the Azeris may do so as they are not satisfied with their position. Baku often does not hide the support it provides to various terrorist groups inside Iran with the aim of destabilizing it. In this regard, ISIL’s terrorist attack on the Shah Cheragh Mosque in Shiraz in October 2022 with links to Baku should be mentioned.

Zangezur Corridor – a big threat

Azerbaijani irredentism implies aggressive politics and military actions aimed at dismembering the internationally recognized territory of the Republic of Armenia after Azerbaijani formations took control of Nagorno-Karabakh. This leads to the so-called of the Azerbaijani Zangezur Corridor. The imagined corridor is a threat to both Armenia and Iran.

After the Second Nagorno-Karabakh War in 2020, the Azerbaijani army occupied large parts of its border with Iran. Azerbaijani President Ilham Aliyev then again started talking about the desire to establish a transport corridor from the main part of the Azerbaijani territory through the southern part of Armenia (Syunik province) to the Azerbaijani exclave of Nakhichevan. The corridor was designed to be exempt from Armenian sovereignty, without Armenian checkpoints, with the aim of connecting the “Turkish world”. It is a classic example of Erdogan’s neo-Ottoman politics. But Tehran proposed an alternative.

In early October, the Iranians started building a bridge that would allow faster transit between the main territory of Azerbaijan and Nakhichevan through Iranian territory, thus eliminating the need for a corridor through Armenia. The Zangezur Corridor would cut through Armenia and isolate Iran from Armenia, which would not benefit both countries. At the same time, it would be a blatant violation of the territorial integrity and sovereignty of Armenia. Such ideas are rejected by almost all foreign governments except Turkey.

Together against Israel

In the regional conflict and proxy war of Iran and Israel, besides Israel using Azerbaijan as an important ally, Iran uses Armenia. Iran wants to use its good relations with Armenia to harm Israel in certain ways on a regional level. In addition to the conflict with pro-Israel Azerbaijan, one of them is the Iranian air corridor through Armenia to Lebanon and Syria.

Iran’s intelligence service Quds Force (Jerusalem Force) conducts military-intelligence operations in Armenia with the aim of transporting weapons and military equipment and information warfare. After Iranian airlines were exposed in 2018 as arms and personnel carriers for the Iranian Revolutionary Guard Corps and related organizations in Syria and Lebanon, the Armenian airline Flight Travel LLC was founded with the same intent. Iranian military commanders, weapons and equipment were often transported from Afghanistan and Pakistan via Armenia to Lebanon and Syria. Such activities are a thorn in Israel’s side.

Points of disagreement

There are also disagreements. The interests of Iran and Armenia diverge when it comes to the presence of extraregional actors in the South Caucasus, including negotiations between Armenia and Azerbaijan over the status of Nagorno-Karabakh and the thawing of their Cold War relations. Armenians are in favor and Iranians are against.

Iranian Foreign Minister Amir-Abdollahian was explicit on this issue when he recently stated: “The presence of foreigners in the region not only does not solve problems, but complicates the situation.” Yerevan wants the US and the EU to mediate in solving outstanding issues with Baku, while Tehran would like the problems to be solved exclusively by regional powers. In line with this regional principle, Iran welcomed the 2021 initiative to establish a 3+3 format for talks that would include the three South Caucasus states (Armenia, Azerbaijan and Georgia), and three neighboring regional powers – Iran, Russia and Turkey. Several meetings in the 3+2 format (Georgia never agreed to participate) have already taken place, the last on October 23 in Tehran, but little progress has been achieved.

Due to the rapprochement with the West, Armenians try to carry out their trade with Iranians as much as possible in exchange of goods – for example, “electricity for gas”. The West’s intention is to deny Iran cash. Despite the developed relations, Armenians do not buy weapons from Iranians. Armenians turned to India for weapons and military equipment. There is also no significant money laundering between the two countries. Armenia follows the path of Cyprus in suppressing such activities. Despite enormous pressure from Tehran, Armenia did not reject the Iranian dissidents. While Turkey returns Iranians to the Islamic Republic, Armenia has established itself as a safe haven for dissidents seeking salvation in Europe or America. In addition, all Western intelligence services are currently operating in Armenia, and most often they are focused on spying on Iran. They do this mostly freely without interfering with Armenian structures.

The future of relationship

Security should form the basis for continued Iranian-Armenian relations in the future. The two countries could establish a joint military-political alliance that would have joint military forces consisting of parts of the Iranian and Armenian armies. The troops of the Iranian-Armenian alliance could jointly intervene if the security of a state was threatened. It is unlikely that Azerbaijan or Turkey would attack Iran, but a Turkish or Azerbaijani attack on Armenia should not be ruled out considering the increased appetites of Baku and Ankara and the inefficiency of the international community, especially in the Caucasus region.

In addition to external invasions, the Iranian-Armenian military-political alliance should conduct anti-terrorist operations against terrorist groups. Such operations could be managed by a joint supreme headquarters. The two countries should continue to improve economic cooperation through certain economic integration, thus laying a solid foundation for strengthening their own security. In any case, Armenian-Iranian relations should continue to deepen in the economic, military, scientific, cultural and sports fields.