Foreign Affairs
Iran’s Paranoia: Impact on Azerbaijan Relations

Iran and Azerbaijan have a long-standing relationship characterized by historical ties, geographical proximity, and shared cultural elements. However, Iran’s growing paranoia has strained these ties, affecting regional stability. Both countries have a deep cultural bond, with millions of ethnic Azerbaijanis residing in Iran’s northwestern provinces. They have cooperated on various fronts, including trade, energy, and regional security.

Stability in the South Caucasus is crucial, and a positive and cooperative relationship between Iran and Azerbaijan is essential. To ease tensions and build trust, both nations should consider diplomatic engagement, economic cooperation, cultural exchange, and mediation. Regular and constructive dialogue can help address concerns and build trust. Expanding economic ties, particularly in trade and energy, can provide mutual benefits and reduce conflicts.

Encouraging cultural exchanges and respecting ethnic minorities’ rights can foster goodwill and understanding. International organizations and neighbouring countries can also play a constructive role in mediating disputes and encouraging peaceful solutions. while historical ties and shared interests can strengthen Iran-Azerbaijan relations, Iran’s paranoia and its impact on the relationship are concerning. Regional stability depends on both nations finding common ground and working together to address their concerns and differences peacefully.

After the collapse of the Soviet Union, Azerbaijan sought to establish its global presence and reconnect with its distant neighbours. Despite stabilizing diplomatic relations, the dialogue with Shi’a Iran remained uneasy. Iran, one of the largest southern neighbours, has negatively impacted relations with Baku due to Tehran’s destructive hybrid warfare strategy. The tense relationship between Azerbaijan and Iran has been complicated by domestic turmoil, international pressure, and geopolitical changes in the South Caucasus. Although de-escalation has occurred, a smooth intraregional partnership remains unachieved. Economic and trade partnerships could be key to re-establishing regional dialogue and restoring pragmatic partnerships. Iran’s rhetoric could force Azerbaijan to take strict measures to protect its borders and regional stability.

Iran-Azerbaijan Trade Partnership: Navigating Security Challenges

Azerbaijani-Iranian relations have been strained since the 2020 war with Armenia, with both sides accusing each other of engaging in terrorism and espionage. The deteriorating relations raise concerns about the potential impact on the South Caucasus region, including economic disruptions and border clashes with regional and non-regional actors like Turkey, Russia, Israel, and possibly the West. Iranian factors include claims of Baku harbouring Israeli intelligence on its soil and the strengthening of the Baku-Ankara axis. In October 2022, the Islamic Revolutionary Guard Corps conducted military drills on the border with Azerbaijan, causing unease and triggering anti-Iranian sentiments. The tensions escalated when the Azerbaijani embassy in Tehran was attacked, leading to diplomatic relations halting and the closure of the embassy.

Iran’s main criticism of Azerbaijan can be attributed to concerns about potential border shifts in the South Caucasus, diminishing its weakened soft power influence. Iranian aggression toward Azerbaijan is a symptom of a reshuffling of alliances in the region and a shifting of global dynamics, resulting in new partnership blocs. Despite Tehran’s claims of maintaining the leading regional power, its influence over Azerbaijan and the region declined even before the 2020 events.

The diplomatic standoff between Tehran and Baku arose due to the violent riots against the Islamic regime after the torture and killing of Mahsa Amini, an Iranian Kurd. The political and economic instability in Iran, particularly in Azerbaijan, led to the deterioration of relations with the immediate neighbourhood, including Azerbaijan. Despite diplomatic escalation, Iran increased trade volumes with several countries in the region, highlighting the long-established IR system control that economic and political ties are developing separately. In the 2022-2023 fiscal year, Iran traded 58.25 million tons of goods worth $35.11 billion with the Persian Gulf’s six littoral states, registering a 10.05% rise in value compared with the previous year’s corresponding period.

Azerbaijan has long been Tehran’s leading trade partner amid its struggle with harsh inflation and mounting unemployment rates. The trade turnover between Azerbaijan and Iran in January-May 2023 amounted to $212,612,000, up 7.6% from the same period in 2022. Azerbaijan and Iran have been engaged in regional infrastructure projects, particularly railway links and new highways, which have significantly influenced their trade relations, with exports from Azerbaijan to Iran amounting to $7,558,000 and from Iran to Azerbaijan $205,053,000 respectively. The Azerbaijan-Iran transit route has become even more important recently due to the Ukraine war, extensive Western sanctions against Russia, and the upgrade of the preferential trade agreement between Iran and the Eurasian Economic Union to a free trade agreement.

The Nuclear Deal and Shifting Dynamics

The 2015 Joint Comprehensive Plan of Action (JCPOA), also known as the Iran Nuclear Deal, was a diplomatic agreement aimed at curbing Iran’s nuclear ambitions in exchange for sanctions relief. During its implementation, relations between Iran and Azerbaijan remained stable, with trade flourishing, energy cooperation expanding, and cross-border ties upward. However, the US withdrawal from the JCPOA in 2018 and the reimposition of harsh sanctions on Iran created a volatile situation in the region. Iran’s paranoia is driven by fear of encirclement by hostile forces and concerns over separatism among its Azerbaijani population.

The presence of Western military forces in neighbouring countries and Iran’s belief in foreign involvement in domestic affairs contribute to its sense of encirclement. Iran’s paranoia has affected its relations with Azerbaijan in various ways, including diplomatic tensions, energy cooperation, cross-border tensions, and cultural ties. Iran has criticized Azerbaijan for its cooperation with Israel and the US, viewing these ties as threats to its security.

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