TEHRAN (Public Radio of Armenia) — With the end of sanctions on Iran, the country’s regional economic influence will begin to rebound. The adjacent South Caucasus region, encompassing Azerbaijan, Georgia and Armenia, is one area that Tehran will target for greater cooperation, reaching out to make deals on trade and energy, says a new report published by Stratfor.
According to the study, the January 17 end of sanctions on Iran will have important consequences worldwide, changing the state of play in the ongoing conflicts in Syria and Yemen. In the South Caucasus, however, Tehran’s reemergence will have particularly sweeping effects. “For some time, Iran has lagged far behind its regional rivals in terms of economic and military influence, even as it has become increasingly interested in Azerbaijan, Georgia and Armenia for their transit and energy possibilities.”
“Iran has a number of reasons for increasing its regional involvement. Europe is trying to diversify away from Russian natural gas, and Iran wants to seize the opportunity to take over these markets. But it needs access to the South Caucasus first. Tehran recently expressed interest in using existing infrastructure such as the Trans-Anatolian Gas Pipeline and the Trans-Adriatic Pipeline, which connect the Caspian and Mediterranean seas. Another option would be reaching Georgia’s Black Sea ports of Batumi and Poti through Armenia. Iranian officials are already courting Yerevan for that purpose,” the report reads.
Exporting energy through Turkey would be more convenient for Iran, but difficult relations between the countries on issues including how to end the Syrian civil war ultimately make the Armenian route more viable. So far, there has been talk of building a $3.7 billion railway and of extending a natural gas pipeline between Armenia and Iran. However, that plan, too, is complicated for Tehran, because Moscow has repeatedly tried to stall or become a shareholder in major infrastructure projects so as not to lose its influence in Armenia.
According to Stratfor, post-sanctions Iran will also try to become more involved in the Nagorno-Karabakh conflict. On January 22, Iran’s Foreign Ministry offered to mediate the conflict, as a possible resolution to the standoff would make it easier for Tehran to implement its infrastructure projects in the region. “Tehran’s involvement will also undermine Russia’s dominant position in the negotiation process. Moscow could theoretically cooperate with Tehran, but considering how opposed Russia is to any Iranian moves into the Armenian and Georgian energy sectors, this scenario is unlikely. On the other hand, as other world powers try to increase their involvement in the conflict, Moscow could see Tehran as a valuable partner to counter foreign influence.”
Indeed, despite the disputes over influence in the South Caucasus, Russia and Iran have shown they can cooperate. In December, both managed to sign a memorandum to synchronize their electricity transmissions systems with those of Georgia and Armenia. And both are keenly aware of the larger threats to their interests.
“While Iran will certainly become more active in the region politically, and while it will increase trade with every South Caucasus country, it will encounter significant obstacles along the way. Russia is unlikely to loosen its grip on Armenia by allowing Iran’s large energy infrastructure projects to move forward — unless Iran allows significant Russian participation in them. And though Tehran will try to re-engage in Nagorno-Karabakh, Russia will limit or possibly block its involvement. Nonetheless, on a range of issue, the two have enough common ground to work together,” the report concludes.
Here is the link to Stratfor’s Report: