In early August 2025, Azerbaijan and Armenia signed a peace agreement under the aegis of the United States. The accord provides for the opening of the Zangezur Corridor that runs across southern Armenia to connect Azerbaijan with its exclave of Nakhchivan, which has been closed since the first Armenia-Azerbaijan war in the early 1990s. More importantly, it gives the United States the right to manage and develop the corridor for 99 years. The agreement also secures the road linking Armenia and the Nagorno-Karabakh region.
The US entry into the region carries strategic implications for numerous parties—Armenia and Azerbaijan, of course, but also Iran, Turkey, Russia and China.
The primary winners are Azerbaijan and Armenia, which can put the era of conflict behind them and begin a new era of peace and development, attempting to build a climate of reconciliation between their peoples.
Turkey also comes out ahead. The opening of the corridor will clear the way for closer ties with Azerbaijan and the other Turkic states of Central Asia, while affirming Turkey’s position as the Caucuses’ main gateway to the West, with all that means for global trade and energy supplies. Because Turkish-American relations are generally cordial, the presence of the United States as an overseer and guarantor of the corridor is not a major concern for Ankara.
The other major winner is the United States. With its mediation of the peace agreement, it is establishing a permanent presence in the South Caucasus. This will enable it to influence Iran, build closer relations with Central Asian states, and play a role in controlling a major East-West global axis.
Russia clearly loses out in the deal. Although the US presence in the Zangezur Corridor may not be military, at least initially, it gives the United States a toehold at the southern entrance to the Russian Federation, a situation Moscow resisted forcefully in Georgia in 2008. In addition, the agreement loosens Russia’s grip on the East-West trade route. True, the so-called Middle Corridor could pass through Georgia and from there to Turkey—a common route for energy and commercial freight since the closure of Zangezur Corridor—and since Russia has regained much of its influence in Georgia in recent years, its loss in the South Caucasus has not totally deprived it of leverage over East-West trade and communication routes. Nevertheless, the accord deals a definite blow to its long-standing influence in the South Caucuses and Central Asia.
Moreover, the peace agreement indicates that Armenia, its traditional ally, has decided to turn westward, perhaps because of Russia’s failure to intervene on its side in the devastating six-week war with Azerbaijan in the fall of 2020. Indeed, Moscow’s reluctance to support Armenia, as it had in the past, may have been an important factor in Azerbaijan’s victory. Although Armenia has not withdrawn from the Russian-led Collective Security Treaty Organisation, it no longer seems to care about maintaining its special relationship with Russia or Russia’s geopolitical concerns in the South Caucasus, and recent behaviour by the Armenian government suggests it is prioritising the relationship with Turkey over its relationship with Russia and Iran.
Iran loses, too, not only because the agreement puts the United States on its northern border, but also because the opening of the Zangezur Corridor cuts off Iran’s access to Armenia, and from there to Georgia and the Russian Caucasus. While the corridor was closed, Turkey’s route to Central Asia passed through northern Iran, giving Iran an important lever of control over East-West trade. Yerevan has no doubt assured the Iranians that the US presence in the corridor will not be military in nature, but it is unclear whether this is enough to mollify Tehran.
China’s gains and losses are more difficult to assess; but because it maintains friendly relations with several Central Asian states, it enjoys a far better geostrategic position than any other major power. The opening of the Zangezur Corridor also offers a shorter bridge to the Middle Corridor, which Beijing has been working to incorporate into the Belt and Road Initiative.
The big question is whether the agreement truly marks the beginning of an era of peace and cooperation in the South Caucasus, or whether this is merely a brief phase, after which Russia will stage a return to the region. Many more details must be hammered out before the full implications of the peace agreement and Russia’s reaction become clear. Moscow successfully restored its influence in Georgia over the past decade and decided to defend its strategic security in Ukraine with military force. What it intends to do about the Armenian and Azerbaijani tilt westward may not be obvious for some time.
*This is a summary of a policy brief originally written in Arabic available here.