The conflict in Iran has rapidly escalated beyond a localized confrontation, involving most of the Middle East. Following the joint U.S.-Israeli strike that targeted Iranian supreme leader Ali Khamenei on February 28, Iran has been launching missiles and drones at neighboring countries, primarily targeting the Arab Gulf states such as Qatar, the U.A.E., Saudi Arabia, and Bahrain. Despite President Donald Trump’s assurances of a resolution, the conflict shows no signs of abating.
While the South Caucasus region has largely remained out of the conflict so far, there are indications that it may not stay immune indefinitely. Armenia and Azerbaijan, both bordering Iran to the north, have a history of conflict, including major wars in 1991-94 and 2020. Azerbaijan’s reconquest of Nagorno-Karabakh in 2023 resulted in over 100,000 refugees fleeing to Armenia.
Armenia and Azerbaijan have recently reached a fragile peace following an agreement brokered by Trump. However, the ongoing war along their shared southern border poses a threat to this calm, potentially causing economic and physical harm. Armenia faces risks due to its gas-swap deal with Iran, disruptions in trade routes, and the influx of Iranian refugees.
The relationship between Azerbaijan and Iran is complex, with Azerbaijan being allied with Israel and speculated to allow Israeli intelligence activities against Iran. Azerbaijan’s ties with Turkey, a vocal opponent of Israel, further complicate the situation. Recent incidents, including an Iranian bombing in Azerbaijan’s exclave of Nakhchivan, have increased tensions but subsequently subsided.
The possibility of Iran targeting Azerbaijan’s critical energy infrastructure poses a significant threat, given its reliance on these resources for foreign revenue. Any destabilization in Iran could reignite conflicts in the South Caucasus, impacting the delicate balance in the region.
Despite uncertainties, some like Reza, an Iranian refugee in Armenia, have chosen not to return to Iran, citing the oppressive regime as a deterrent. The future remains uncertain, with potential implications for regional dynamics and conflicts.