New realities in the South Caucasus

The recent fighting in Nagorno-Karabakh has changed the power balance in the South Caucasus. On one hand, the West has failed to play any role in settling the conflict. On the other hand, Turkey and Russia have solidified their influence in Caucasus region.

Recep Tayyip Erdogan and Ilham Aliyev in Baku.
In Baku, Turkish President Recep Tayyip Erdogan (L) and Azerbaijani President Ilham Aliyev (R) watch the Victory Parade held to celebrate their victory in Nagorno-Karabakh. Both countries have considerably boosted their standing in the region after Armenia’s defeat. © Getty Images

In a nutshell

  • Turkey has increased its influence in the South Caucasus
  • Russia controls access to key geopolitical areas
  • The West has been completely sidelined

The outcome of the six-week war in and around the contested territory of Nagorno-Karabakh has altered the geopolitics of the South Caucasus. With his decisive military intervention on the side of Azerbaijan, Turkish President Recep Tayyip Erdogan not only cemented Turkey’s role as a regional great power, he also shattered the dogged Western insistence that the many “frozen conflicts” in the post-Soviet world can only be solved through political negotiations. 

When the Kremlin stepped in to broker an eleventh-hour cease-fire to prevent a total rout of the Armenian military forces, the outcome was that Azerbaijan regained control over 80 percent of the territories that had been under Armenian control since 1994. 

The South Caucasus will be caught in a power standoff between Russia and Turkey.

The Russian intervention highlighted the ineffectiveness of the West. The Minsk Group, the Western attempt at finding a negotiated solution, was created in 1992, by what was then the Conference for Security and Cooperation in Europe. It is cochaired by Russia, France and the United States. Close to three decades later, its mission has been rendered largely obsolete. The Turkish military intervention and the Russian-brokered cease-fire pulled the rug out from under the feet of European and American diplomats. While Western powers still insist that the Minsk Group play a role in settling the conflict, it is becoming obvious that Moscow and Ankara will manage this process.

The implication is that the South Caucasus will be caught in a power standoff between Russia and Turkey, like in so many historical instances. While the Kremlin’s intervention to secure a cease-fire did ensure that it will retain a significant role in future developments, for the moment, Turkey and Azerbaijan are the winning side


On December 10, the day of the armistice, Turkey and Azerbaijan celebrated their victory with a large military parade in Baku. On the reviewing stand, President Erdogan and President Ilham Aliyev were beaming as military jets flew by, releasing smoke in the colors of the Azerbaijani flag. 

President Erdogan declared the end of the “30-year-old injustice” and pledged that Turkey’s support to Azerbaijan would continue. The parade included a small contingent of elite Turkish commandos. Larger numbers of Turkish troops are likely to be deployed on Azerbaijani territory as a counterweight to Russian peacekeepers.

A joint press conference on January 29 shed some light on how regional forces perceive the future balance of power in the South Caucasus. Turkish Foreign Minister Mevlut Cavusoglu and his Iranian counterpart, Javad Zarif, proposed a 3+3 format cooperation mechanism: Turkey, Iran and Azerbaijan, plus Russia, Armenia and Georgia. No Western involvement was mentioned.

To what extent the four major powers involved will be able to cooperate remains unclear. While Iran clearly views the gambit as a way of pressuring the Biden administration into returning to the Iran nuclear deal, Turkey harbors visions of expanding Pan-Turkism. Azerbaijan is wary of angering Russia, which will focus on retaining what it can from its former regional influence.


As the games for control over the South Caucasus unfold, a key feature to watch will be major infrastructure projects. According to the cease-fire agreement, Armenia must open a transport corridor along its border with Iran to link southern Azerbaijan with the Azerbaijani exclave of Nakhchivan. Wedged between Armenia, Iran and Turkey, the area could become a geopolitical hotspot.

Again, the obvious winners are Turkey, which will gain access to the important Caspian Basin, and Azerbaijan, which will no longer be dependent on Iran for transiting energy and other supplies to Nakhchivan. The wild card is Russia. As formal control of the corridor will be in the hands of Russian border troops, it will be up to the Kremlin to decide how it is exploited.

One scenario has Russia making the most of the commercial opportunities by revitalizing the old transport infrastructure in operation before the war in Nagorno-Karabakh. The main artery would run from Russia across Azerbaijan and then west to Nakhchivan, after which it would branch out to Turkey and Yerevan. Russian Railways, a Kremlin-affiliated behemoth, could greatly profit from the venture. 


Facts & figures

Lachin and Nakhchivan corridors
Thanks to the Nakhchivan corridor, Turkey will gain access to the Caspian Basin. © macpixxel for GIS

Meanwhile, Iran would have much to lose, as it has long benefited from providing an alternative to the disrupted Nakhchivan corridor. With the latter open once again, Turkey and Azerbaijan will want to reduce their dependence on transit across the Islamic Republic. In addition to the economic impact, this would also reduce Tehran’s leverage over Baku.

Strategy game

Georgia could also be affected. Like Iran, it had reaped windfall gains from the war in Nagorno-Karabakh. Moscow may now choose to encourage freight operators to use the Nakhchivan route instead of the recently launched Baku-Tbilisi-Kars railway that also links Azerbaijan with Turkey. The present Russian transit route to landlocked Armenia via Georgia could be rerouted to the corridor. There could also be a direct air corridor from Azerbaijan to Armenia. However, Azerbaijan and Turkey may be hesitant to commit large financial resources to infrastructure development on land that belongs to Armenia and is under Russian control. 

The initial reaction from Iran was to downplay the significance of the Nakhchivan corridor, pointing at the danger of constant incidents because of Turkey-Armenia tensions. Javad Hedayati, an official at the Iranian transportation ministry, stated that “It is likely that this corridor will merely accommodate local traffic between the Republic of Azerbaijan and Nakhchivan.”

Such hopes were dashed at a January 11 meeting between the presidents of Russia, Armenia and Azerbaijan. A joint task force, charged with drawing up plans for quickly developing transnational transportation infrastructure, was created. Russian Foreign Minister Sergei Lavrov also noted that Moscow would develop direct Armenian-Azerbaijani links despite Iranian concerns.

Obstacles ahead

There could be a more significant obstacle to major reconfigurations of the region’s transport infrastructure. Turkey and Azerbaijan have invested heavily in promoting Georgia as a transit route for energy and heavy cargo. The trilateral relationship has been tried and tested, and the increasing emphasis on military cooperation to protect these investments reduces the risk of Georgia being sidelined.

It is also clear that Moscow will retain a solid geopolitical interest in developing the railway line that runs from Russia to Armenia via Georgia while still investing in the Russia-Azerbaijan-Armenia line. With both options open, the Kremlin will have more clout over Georgia.

Both the unrecognized government in Artsakh and Armenia itself have been made more dependent on Russia.

Much depends on how Russia will play its hand in relation to Turkey, and how well Russia and Azerbaijan work together. Baku has already angered Moscow by taking over its role as main energy supplier to Turkey. By turning to Ankara for both military and political support, it has also drastically reduced its dependence on Russia. 

However, President Aliyev may not want to be absorbed into President Erdogan’s vision of Pan-Turkism. The two men have very different backgrounds and, in all likeliness, very different aspirations. The Kremlin may be expected to play into whatever tensions develop between them. The fact that it managed to stop the Azeri forces before they achieved a total rout of the Armenian defenders also means that it has an important ace up its sleeve.



About two-thirds of the territory of Nagorno-Karabakh, including the capital city Stepanakert, remains in Armenian hands, with the important distinction that the self-proclaimed Republic of Artsakh is now fully surrounded by Azeri forces. The only land connection with Armenia proper is the Lachin corridor, which is guarded by Russian peacekeepers. 

The role of protector for the remaining Karabakh Armenians has been transferred from Armenia to Russia, and the Kremlin has every incentive to ensure that it stays this way. Under a conclusive settlement, it would have to withdraw its peacekeepers and give up its role as mediator. As things now stand, both the unrecognized government in Artsakh and Armenia itself have been made more dependent on Russia. 

The Kremlin is faced with a substantial increase in Turkish influence in the South Caucasus. The Nakhchivan corridor could extend this sway into Central Asia as well. But Russia is also beginning to take countermeasures. In addition to its military base in Armenia, it now has combat personnel in Azerbaijan as well. 

The Nakhchivan corridor could greatly benefit Turkey and Azerbaijan, but it will be hostage to the Kremlin’s goodwill. Armenia has been seriously weakened, and its dependence on the Lachin corridor ensures it will play by Russia’s rules. Georgia could face marginalization if Moscow opts for a major shift in the region’s transport infrastructure. All told, Russia is shoring up its position and getting ready to prevent Ankara from making further inroads into what it views as its own backyard. 

Due to their long inaction and poor grasp of events on the ground, the EU and the U.S. have de facto dealt themselves out of the game. During his Senate confirmation hearing, the new U.S. Secretary of State, Antony Blinken, vowed to reinvigorate American involvement in the Minsk Group and to work to prevent any additional interference by third parties. That train may have already left the station.

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