Retying The Caucasian Knot

Russia and the Euro-Atlantic community now find that their reach exceeds their grasp in terms of their ability to shape the regional order in the South Caucasus. Both remain regionally influential, but their leverage to drive developments is eroding as the South Caucasus is affected by multipolar international politics. The rise of multipolarity is being promoted by the increasing role of a broad set of external actors – most of all Turkey, Iran and China – engaging in the South Caucasus, and by strengthening links between the region and Asia, the Middle East and Central Asia, links that are supplementing the region’s established ties to the US, Europe and Russia. In this context, there is increased local agency in relation to external partnerships (reinforced by a turn to illiberal domestic politics), and waning attraction both to Russian and Euro-Atlantic integration projects.

As a result of these changes, Russia has lost its position of pre-eminence, which rested primarily on tying together its security interests with the region’s protracted conflicts. Over the past 30 years, Moscow has leveraged these conflicts to give it a central geopolitical role, which it has used to promote a regional status quo to its advantage and to create a Gordian knot of interwoven obstacles and interests to hinder efforts at Euro-Atlantic integration. The war in Ukraine has played a part in undercutting Moscow’s position in the South Caucasus, but Russia’s long-term relative decline as new actors have entered the region, power shifts within the South Caucasus itself (notably the rise of Azerbaijan), and changing Russian regional interests are the main factors challenging Moscow’s established role.

Russia is now seeking to adapt to the new regional situation. It is attempting to establish its role as the leading, but no longer exclusive, external actor in the South Caucasus by reconfiguring its position. This involves a rebalancing of bilateral relations, broadening its range of policy tools (notably in the areas of transport and communications) from a previous reliance on security, and being ready to countenance an expanded presence for other external actors, notably regional powers – principally Iran, Turkey and, increasingly, China – while remaining opposed to the US and the EU.

In the absence of a Euro-Atlantic security commitment capable of challenging Russia in the South Caucasus, the policies of enlargement (eventual NATO and EU membership) have lost traction. The Euro-Atlantic community now risks being marginalised in an increasingly competitive regional environment. If it is to undercut Russia’s effort to build a new position – to retie the Caucasian knot – and retain a significant regional role, it will need to develop approaches capable of responding to and shaping the new South Caucasus geopolitics and geo-economics.

Introduction

Russia is facing a key moment in its post-Soviet position in the South Caucasus (Georgia, Azerbaijan and Armenia). Since the mid-2000s, geopolitical competition between Russia and the Euro-Atlantic community has emerged as a defining issue shaping the regional order. Using security policy – including direct military action – as its primary tool, Russia was able to establish itself both as the main arbiter in conflict resolution and central to the balance of power in the South Caucasus. On this basis, Russia was able to limit NATO and EU enlargement policies, while at the same time seeking to advance its own integration project.

▲ Figure 1: Political and Military Map of the South Caucasus. Source: Labrang/Wikimedia. Edited by RUSI.

As a result, the South Caucasus became an internally and externally fragmented region (see Figure 1). Countries were divided domestically and regionally by protracted conflicts – Nagorno-Karabakh was contested between Azerbaijan and Armenia, and conflicts emerged over the regions of Abkhazia and South Ossetia in Georgia. Armenia, Azerbaijan and Georgia also developed differing foreign and security policy trajectories and built diverse allegiances. Azerbaijan adopted policies of balancing and neutrality, Georgia aspired to join the EU and NATO, and Armenia became Russia’s ally within the Collective Security Treaty Organization (CSTO) and the Eurasian Economic Union (EAEU). Russia has sought to manipulate and deepen these divisions to give itself a central regional role. In recent years, as President Vladimir Putin has developed a more assertive policy of rebuilding Russia as a “great power”, the South Caucasus has become integral to the Kremlin’s wider ambitions of dominating the Black Sea, and projecting power into the Middle East and the Mediterranean.

The pre-eminence that Russia has established in the South Caucasus over the past three decades is now being eroded by far-reaching shifts in the international regional and domestic environments. These changes have the potential to create a new regional order. A variety of international actors – China, Iran, Israel, the Gulf states and India, among others – has entered the region, offering new diplomatic and political, trade and investment, and security relations, and providing alternatives to both Russia and the Euro-Atlantic community. The governments of Armenia, Azerbaijan and Georgia have sought to widen their space for political action by developing foreign policies to engage with new international actors and to escape from the geopolitical competition between Russia and the West. Together, these developments have diminished the significance of Russia’s security leverage, notably in respect to the contest over Nagorno-Karabakh as Azerbaijan and Armenia seek to finalise a peace agreement, and shifted the South Caucasus towards alternative agendas for trade, connectivity and strengthening multipolarity.

This paper explores the challenge to Russia’s established position in the South Caucasus as the region undergoes significant change, and analyses Moscow’s effort to craft a new regional approach. The findings of the paper are drawn from three principal sources. A review of secondary literature on regional developments in the South Caucasus was supplemented by a workshop conducted in Tbilisi, Georgia, in April 2024 that brought together leading experts on regional issues. In addition, interviews were conducted, in confidence, with officials from the US, the EU and the UK in Washington, DC, Brussels, London, Tbilisi and Yerevan between February and May 2024.

The paper has three chapters. Chapter I examines how in the post-Soviet decades Russia established itself as the leading external actor in the South Caucasus. Chapter II analyses how Russia’s regional position is being challenged, notably by the wars over Ukraine and Nagorno-Karabakh, the appearance of new international actors in the South Caucasus, and by the shift of regional governments to pursuing foreign policies of multi-alignment, made possible by multipolarity, and often in conjunction with increasingly illiberal domestic politics. Chapter III considers the implications of these changes for Russia’s regional position and sets out how Moscow has sought to respond to these shifts to retain a leading role. The paper concludes with the implications of the changes in Russia’s position and the wider shifts in the South Caucasus for the policies of the Euro-Atlantic community.

I. Russia’s South Caucasus Strategy

The South Caucasus has historically played a key role in Moscow’s broader strategic thinking. The conquest of the North and South Caucasus was central to Russian imperial ambitions and involved a prolonged and ultimately triumphant struggle for control over the region with the Ottoman and Persian empires between the 18th and 20th centuries. The defeat of the Ottomans was at the heart of the wider Russian plan to establish dominance in the Black Sea region, including extending state boundaries through the territories of contemporary Ukraine, and expanding influence into the Balkans, as well as through the Caucasus.

This strategic goal of expanding control over the Caucasus was a stepping-stone for Russia to extend its reach into the Middle East and the Mediterranean, notably as it sought naval access to the world’s oceans beyond the limits of its northern ports. During the Soviet era (1922–91), Moscow applied a similar strategic logic to the region, while also seeing the South Caucasus as a buffer zone to the conflicts of the Middle East and, during the Cold War, the threat posed by NATO to the south.

Post-Soviet South Caucasus Engagement

With the collapse of the Soviet Union in 1991 and the emergence of the independent states of Georgia, Azerbaijan and Armenia, Russia initially shifted away from viewing the South Caucasus as integral to its security policy. The new Russian leadership under President Boris Yeltsin focused instead on a Euro-Atlantic vector in its external ties, while its neighbours were a much lower priority. A series of civil wars in the South Caucasus – over Abkhazia and South Ossetia in Georgia and Nagorno-Karabakh in Azerbaijan – involved elements of Russia’s security forces and led Moscow to develop a new security engagement in the region around the deployment of Russian-led “peacekeeping operations”. These missions served to freeze the violence, rather than resolve the conflicts, and opened the way for Moscow to manage, as well as manipulate, the conflicts in subsequent years, including the opportunity to influence regional issues.

From the mid-1990s, growing violent instability in the North Caucasus, notably in Chechnya, drew Russia into a more southern-oriented security and military posture, and promoted a refocus of its foreign and security policy onto the immediate neighbourhood. Notwithstanding the withdrawal of some Russian military facilities from the South Caucasus in the 1990s and early 2000s, notably from Georgia and Azerbaijan, Moscow retained a border guard and military presence in Armenia. This positioning reflected the long-term view in Moscow of the South Caucasus as a buffer to instability from the south and a means to balance Turkey’s regional aspirations.

The growing threat of Islamist terrorism in Russia’s North Caucasus and the launch of the second Chechen war by Putin in 1999 led Russia to strengthen further its military and security focus on both the North and South Caucasus. It was, however, the emergence of growing Euro-Atlantic engagement in the region that led Russia increasingly to instrumentalise protracted conflicts as leverage in an emerging geopolitical struggle with the West.

During Putin’s initial period as Russia’s president (2000–08), and in particular during his second term (2004–08), Russia moved away from cooperative security approaches to regional conflict management, notably through the OSCE, to giving primacy to its own bilateral engagements. Moscow sought to balance betweenArmenia and Azerbaijan over the Nagorno-Karabakh conflict, including through the supply of weapons to both sides. Russian repositioning around Georgia’s protracted conflicts accelerated following the November 2003 Rose Revolution that brought to power in Tbilisi a government seeking closer ties to NATO and the EU. Increasingly, Moscow backed the separatist leaderships of the two breakaway regions of Abkhazia and South Ossetia in opposition to Georgia.

Russia and Euro-Atlantic Regional Competition

The August 2008 Russia–Georgia war, following the April NATO Bucharest Summit Declaration that Georgia (and Ukraine) would join the Alliance in the future, marked the onset of full-scale geopolitical confrontation in the South Caucasus. Russia’s use of military force was designed to demonstrate that it was unwilling to countenance Euro-Atlantic integration in territories it considered its backyard.

The return of Putin as president in 2012 marked a new phase of Russian policy towards the South Caucasus. The region became fully integrated into Putin’s growing great power ambitions for Russia, and the confrontation with the Euro-Atlantic community. Russia’s military action against Georgia in 2008 directly challenged the Euro-Atlantic community by suggesting that it would need to be ready for war with Russia if it sought to advance membership in European organisations for countries in the South Caucasus. Through this positioning, Putin aimed to maintain a regional status quo favourable to Russia.

While Russia’s security position has been its trump card in the South Caucasus, Moscow has developed other interlinked policy approaches, both to coerce and attract the region. As geopolitical competition with the Euro-Atlantic community strengthened after 2008, Russia increasingly sought to integrate the South Caucasus more closely as part of its efforts to create a “sphere of privileged interests” across the territory of the former Soviet Union. Russia aimed to counter Euro-Atlantic integration efforts through its own integration agenda, focused on the EAEU and the CSTO. Ultimately, only Armenia agreed to join the EAEU – it was already a member of the CSTO – when Russia leveraged Armenia’s security dependence to pressure it to reject an EU association agreement in 2013.

Moscow’s policy mix has been tailored to the countries of the region. With Georgia, the Kremlin has used a stick-and-carrot approach. Initially, Moscow relied on economic coercion and disinformation, while leveraging the protracted conflicts (including periodically raising the prospect of annexing South Ossetia), and the threat of further coercive and even military action against Tbilisi following the 2008 war. With the adoption by the Georgian government of a policy to normalise relations with Russia from 2012, and in particular as the ruling Georgian Dream Party has grown increasingly authoritarian in its domestic policies, leading to a deterioration of ties with the Euro-Atlantic community, Moscow has offered visa liberalisation, the resumption of direct flights between the two countries, increased tourism and the importance of a trade relationship.

With Armenia, Moscow has employed a different approach. It has provided security guarantees through Armenia’s CSTO membership and the presence of Russian military and border guard facilities. Moscow has also offered Armenia favourable economic terms. It has sought to advance Russian investment in the energy and other sectors, while membership of the EAEU has provided Armenia with access to a large market.

In the case of Azerbaijan, Russia has been ready to accommodate flexibility as long as Baku has eschewed seeking NATO or EU membership, while at the same time pledging good neighbourly relations. This has been achieved through the conclusion of a series of partnership agreements over the past two decades (notably the partnership agreement in February 2022), and building cooperation in key economic areas, critically energy.

Over the past two decades, Russia has sought to use its pre-eminent security position, supported by other policies, to limit the three South Caucasian republics’ options for external economic and security ties. The aim of these approaches has been to isolate the South Caucasus strategically while tying it ever closer to Russia. Entangling the conflicts of the South Caucasus with Russian security interests has created a Gordian knot for the Euro-Atlantic community in the region which, in the absence of a readiness to challenge Russia directly for fear of escalation to military confrontation and even war, has been unable to advance substantially its integration efforts.

Russia as a Great Power and the South Caucasus

As competition with the Euro-Atlantic community intensified, the South Caucasus became part of Russia’s broader ambition to project its power around and across the Black Sea. In a return to Russia’s grand strategy towards the South Caucasus, Moscow’s regional engagement was linked to the wider goal of projecting power into the Black Sea region and beyond, into the eastern Mediterranean and the Middle East, as Russia became involved in the conflicts in Syria and Libya. After the 2008 Russo-Georgian War, Russia’s 2014 annexation of Crimea and its intervention in eastern Ukraine, the military and security dimensions of the South Caucasus were strengthened through enhancing the network of Russian military bases in Abkhazia, South Ossetia and Armenia (see Figure 1), and promoting the integration of these facilities with the regional network of Russian military facilities.

Russia’s Growing Dominance of the South Caucasus

By the 2020s, Russia appeared to have largely achieved dominance in the South Caucasus. Moscow’s approach to the region had effectively halted Euro-Atlantic integration while gradually strengthening its own position. In 2020, when Azerbaijan launched the Second Nagorno-Karabakh War, Russia aimed to advance its regional role with the introduction of “peacekeepers” into the conflict, something it had sought for over 20 years. These developments led to interpretations that Russia was consolidating its regional pre-eminence. In fact, the South Caucasus was already experiencing a set of interrelated shifts that have together undermined the regional position that Russia built up in the post-Soviet period.

II. Russia Challenged in the South Caucasus

In recent years, the foundations of Moscow’s dominant regional position, built in the context of geopolitical and geo-economic competition with the Euro-Atlantic community, have been challenged by three interlinked developments.

First, the Second Nagorno-Karabakh War (2020 and 2023) created a new regional balance of force and the emergence of economic and connectivity opportunities that have undercut security agendas. Second, a set of external actors has entered the region, providing alternatives to Moscow, Brussels and Washington, and tying the South Caucasus more closely to the Middle East, central Eurasia and Asia. Third, Russia’s war in Ukraine initially led to a questioning of Moscow’s ability to project security and military force in the region, while the prolonged nature of the war has reinforced hedging strategies by countries in the region unsure of who will ultimately be victorious. Together, these developments are promoting foreign and security policies of multi-alignment in the South Caucasus, as regional governments seek to develop multiple external partners to balance and hedge against the dominance of Russia and the Euro-Atlantic community.

The Second Nagorno-Karabakh War

The most significant development within the South Caucasus region has been Azerbaijan’s military actions in 2020 and 2023 to take back territory occupied by Armenia following the First Nagorno-Karabakh War (1988–94), and ultimately to reclaim control over the Nagorno-Karabakh region itself. As a result, Azerbaijan has emerged as the regional agenda setter and has attracted Russia’s interest.

For Armenia, there has been a deterioration in the Armenia–Russia alliance as a result of Russia’s failure to restrain Azerbaijan in 2020 and the inability – and possibly unwillingness – of Russian “peacekeepers” to prevent the seizure of the whole of Nagorno-Karabakh in 2023. This led to the flight of the ethnic Armenian population amid claims of ethnic cleansing – along with a perception that Moscow is more interested in developing a close relationship with Baku.

Armenia has signalled publicly that it is ready to shift away from its reliance on Russian security guarantees and seek closer relations with others, notably the US and the EU (especially France). Prime Minister Nikol Pashinyan has indicated that Armenia has suspended its participation in the CSTO – having previously indicated that it would leave the organisation – although he has not closed the door to a future relationship, and Russian border guards have been removed from Yerevan airport. With the Nagorno-Karabakh conflict resolved by military force, Russia is no longer able to leverage its role as a mediator, while the prospect of a peace agreement between Armenia and Azerbaijan, potentially also leading to Armenia–Turkey normalisation, will further reduce Moscow’s ability to leverage its security role. With the war in Ukraine also redefining Russian regional interests, Moscow has begun to reshape its approach to the South Caucasus.

Emerging International Actors in the South Caucasus

While the period since 2008 has been marked by geopolitical competition between Russia and the Euro-Atlantic community in the South Caucasus, states within the region are increasingly reaching out to a wider network of partners to help them to manage geopolitical competition and expand economic opportunities.

Turkey

The growing influence of Turkey has relied to a significant degree on its strategic alliance with Azerbaijan and the coordinated approach that the two countries have taken to Armenia and the Nagorno-Karabakh conflict, as well as energy projects. Since 1992, they have forged close military, diplomatic and economic ties. Turkey has notably provided Azerbaijan with important military capacities and training. This relationship was central to the 2020 Second Nagorno-Karabakh War, in which Turkish military technologies played an important role, but even more significant was the ability of Turkey’s President Recep Tayyip Erdoğan to balance diplomatic efforts by Putin to shape the outcomes of the conflict to Russia’s advantage. Since then, Turkey and Azerbaijan have coordinated efforts to position the South Caucasus as the gateway to the Middle Corridor, which links Europe through the Caspian region to Central Asia and western parts of China, and to accelerate work on this initiative.

Although Azerbaijan is Turkey’s key regional ally, Turkey has been exploring deeper ties with Georgia, reflecting the country’s key transit role for energy, transport and trade. Turkey identifies relations with Georgia as a “strategic partnership”, supports its territorial integrity and does not recognise claims by Abkhazia and South Ossetia for independence. Turkey is Georgia’s leading trade partner, ahead of Russia and China, and Ankara views Georgia as a critical partner in its plans for the development and expansion of the Middle Corridor. Turkey has also sought to develop its security ties to Georgia, including as part of a trilateral format with Azerbaijan, and has been a supporter of closer ties between NATO and Georgia. Turkey’s role has also been important as part of a broader strengthening in relations between the South Caucasus and Middle Eastern countries that has included rising trade and deepening diplomatic ties, notably with Saudi Arabia, but also with Iraq and Jordan (as well as Iran and Israel).

Iran

Iran does not have the levels of regional influence achieved by Russia and Turkey, in part reflecting its strategic view of the South Caucasus as a buffer region. Tehran’s approach has been focused on preventing overspill from the region into Iran. It hopes to balance the influence of regional rivals (Turkey and Russia) and ensure that the South Caucasus does not become a base of operations for states seen as hostile to Tehran (principally the US and Israel). As the third regional neighbouring state it has, nonetheless, built ties with Armenia, while managing a complex and occasionally confrontational relationship with Azerbaijan.

As the South Caucasus has begun to open to greater connectivity, gaining access to Iran’s trade and transport routes has risen in importance. Tehran has developed a more forward-leaning foreign policy towards the South Caucasus and has sought to improve its relationship with Azerbaijan and adopt a more balanced approach to the countries in the region. This has led to an emergent closer relationship with Georgia.

Along with Russia and Turkey, Iran shares an interest in limiting the role of the Euro-Atlantic community in the South Caucasus, and Tehran has supported efforts to advance the “3 + 3” South Caucasus Regional Cooperation Platform format, aimed at bringing together Iran, Turkey, Russia and the South Caucasus countries. Iran has also recognised the strategic importance of efforts to shape a new regional transportation network as part of a peace agreement between Armenia and Azerbaijan. Crucially, Tehran has opposed efforts to open the so-called Zangezur Corridor, the proposed transport link between Azerbaijan and its exclave Nakhchivan across the southern Armenian region of Syunik, fearing it would impede its trade links northwards and strengthen Turkey’s regional position, even when this has led to friction with Russia.

Despite strains in the Iran–Russia relationship, there has been a strategic convergence between Tehran and Moscow as a result of the Ukraine war, which is being formalised through a proposed partnership treaty that will include regional security issues, alongside a free-trade agreement to link the EAEU to Iran. Iran’s evolving engagement in the South Caucasus, and notably its cooperation with Russia in the area of transport, form an important element of the growing alignment between the two countries.

Israel and the Gulf States

After Turkey, Israel has been Azerbaijan’s most important external partner in military, investment and diplomatic support. Azerbaijan has looked to Israel to provide it with key military capabilities, as well as technologies to advance its ambitions to move its economy away from reliance on hydrocarbon production. Azerbaijan has become a significant energy supplier to Israel. Israel has, on the other hand, had modest relations with Georgia and Armenia, and its engagement in the South Caucasus has served primarily to reinforce Baku’s international options and capabilities, rather than to play a regional role. At the same time, Iran’s concern about a potential Israeli security presence in Azerbaijan has fed into Tehran’s broader foreign and military approach to the South Caucasus, notably into an effort to weaken Baku through support for Armenia.

Building on their established links to Azerbaijan, Gulf states are increasingly looking to the South Caucasus for investment and trade opportunities, particularly in the energy and transportation sectors.

China and Central Asia

China’s presence in the South Caucasus has been growing through trade and tourism, as well as infrastructure projects. The new international interest in transport corridors through the South Caucasus, in part created by the wars in Ukraine and the Middle East, has increased China’s engagement in the region as it seeks to develop “the Great Silk Road” as part of its global Belt and Road Initiative. The award to a Chinese-led consortium of a contract to build the Anaklia deepwater port in Georgia is a particular focus for Beijing as part of its effort to build transport infrastructure connecting China’s economy to European markets.

The pull of China in relation to economic and trade issues is also drawing the countries of the South Caucasus to the east in their external relations, as efforts to develop the Middle Corridor accelerate. While the central approach of China in the South Caucasus appears to be geo-economic, its growing interest in Georgia has been linked to the erosion of democratic practices through rising elite corruption, while also being seen to reinforce the broader regional shift of foreign policy – away from the Euro-Atlantic community.

To cement its developing regional role, China has sought to conclude “strategic agreements” with Georgia and Azerbaijan. Baku has made the most significant shift to the east, even raising the prospect of joining regional formats, and President Ilham Aliyev has attended the Central Asia head of state consultative meetings, as well as forging bilateral and minilateral ties with countries across that region. The transport connectivity agenda is, however, exerting a pull on all the South Caucasus countries, pushing them to develop ties linking the Black and Caspian Sea regions.

India and Pakistan

India and Pakistan are relatively minor international actors in the region, but India has been increasing its arms sales, notably becoming a primary supplier to Armenia, while Pakistan has concluded defence agreements with Azerbaijan. Pakistan has sought to track India’s growing regional ties as an extension of their bilateral rivalry. Relations with the South Caucasus also reflect India’s long-term plans to build new trade and transport routes from South Asia across Eurasia to Europe, linking the region to the Gulf and the Indian Ocean. These new ties are becoming the basis for competing groupings, with India seeking to cooperate with Iran and Armenia, and Pakistan looking to partner with Turkey and Azerbaijan.

The South Caucasus as a Multipolar Region

The emergence of a multitude of international actors in the South Caucasus is changing the region’s international environment. While Russia and the Euro-Atlantic community remain key reference points, reflecting their continuing regional strategic weight, new actors are offering additional security, economic and transport relationships. Minilateral formats are emerging to reflect new partnerships and blending of interests, and some South Caucasus states are looking to participate in larger multilateral formats, including the Shanghai Cooperation Organisation, the BRICS (Azerbaijan announced its application to join in August 2024), and the Organization of Turkic States.

For countries in the region, this approach to external ties is driven by two main interests. First, governments are pursuing balancing approaches to serve as counterweights to external integration projects that seek to curtail the position and interests of domestic elites, whether it is via Russia’s efforts to shape pro-Moscow regimes or the Euro-Atlantic community’s democracy, human rights and rule of law agenda challenging illiberal and kleptocratic regimes. Second, the broadening of external contacts has enabled countries in the South Caucasus to increase their leverage, and notably to hedge their dominant bilateral ties to Russia and the Euro-Atlantic community, in order to improve their bargaining position.

The development of this dimension of regional politics is, however, also a source for new instability in the region, with countries now linked to various disputes and competition beyond the South Caucasus, for example the tensions between Turkey and Israel over Gaza and Lebanon have unsettled their ties to Azerbaijan. It is also difficult for external actors to develop a stable approach to the region, as the regional governments are able to switch external partners and play them against each other to secure better offers.

Russia’s War in Ukraine

Russia’s invasion of Ukraine in February 2022 created shock waves across the South Caucasus. Initially, Russia pulled forces from the region to reinforce its struggling troops in Ukraine. As Moscow faced difficulties in overcoming Ukrainian forces, questions were raised in the region about the effectiveness of Russia as a military and security actor. The war also increased external pressure on the governments in the South Caucasus to take sides in the conflict, including through observing Western sanctions on Russia.

Georgia, concerned about the Russian threat to its own territories, distanced itself from Kyiv and refused to apply sanctions. Azerbaijan sought to maintain its policy of balancing, providing limited support to Ukraine, agreeing to supply extra gas volumes to Europe as it sought to diversify its energy markets, and emphasised its crucial geographic position at the heart of the Middle Corridor as an alternative to Russian transit routes. At the same time, Baku sought to maintain its strategic relationship with Moscow. Armenia, given its reliance on Moscow and questions about the effectiveness of Russian forces and the ability of Russia’s defence industry to supply weapons, began to recalibrate its security partnership with Russia.

As the Ukraine war has continued, the impact of the conflict on the South Caucasus has shifted. With considerable uncertainty about the outcome of the war, all three South Caucasus states have sought to avoid being too overtly tied to one side and have pursued different balancing options. There is also concern that if Russia is victorious in Ukraine, it may then look to strengthen its control over the South Caucasus as the next step in efforts to expand Russia’s regional power, and so the prudent approach is to avoid taking sides.

At the same time, the Ukraine war has reshaped Russia’s own interests in the South Caucasus. As a result of the war and Western sanctions, the South Caucasus has become critical to Russia’s efforts to reorient trade and communications away from Europe. This has led Moscow to rebalance its regional relations, with Baku becoming central to Russia’s regional transportation plans.

III. Russia’s Repositioning in the South Caucasus

Faced with the current shifts across the region, Russia has sought to craft a new balance of policies so that it can reposition itself and remain at the heart of the South Caucasus regional order.

Security Policy

Despite the emergence of new policy tools, Moscow continues to use security issues to shape the region towards its interests. The ongoing occupation of Abkhazia and South Ossetia and their steady integration into Russia remains a defining point in Moscow’s regional position. As the relationship between Georgia and the Euro-Atlantic community has frayed, as Tbilisi has adopted increasingly anti-democratic domestic policies and continued to develop ties with Russia, Moscow has rebalanced its approach from threat to inducement around the protracted Abkhaz and South Ossetian conflict. Before the Georgian elections on 26 October 2024 Moscow hinted that it would be ready to help Tbilisi “normalise” relations with the two breakaway regions.

At the same time, the fact that the Euro-Atlantic community has not been prepared to challenge Russian military occupation of Abkhazia and South Ossetia directly signals to the wider region the limit of EU/NATO regional commitment. While Russia’s policy towards Georgia remains a clear indication that Moscow will not countenance Euro-Atlantic integration in the region, its ability to bind the wider region through security ties has, however, corroded, notably with the resolution of the Nagorno-Karabakh conflict and the subsequent shift by Armenia towards a broader range of security partners.

Since its defeat in the Second Nagorno-Karabakh War, Armenia has signalled strong dissatisfaction with the Russian security guarantee, and there has been an escalation of negative rhetoric regarding Moscow’s role. Yerevan has taken steps on the margins of its security relationship with Moscow to underline its discontent, opened to a wider range of external relationships, including with the Euro-Atlantic community, and begun to rebuild its military through partnerships with Europe, India and the US. While Armenia may be able to “navigate a path away from Russia” through diversifying its security partnerships, there are real limits on how far Armenia can push, at least in the medium term. It has become clear since 2020 that Russian security protection does not extend to actions by Azerbaijan. However, ultimately, only Moscow is willing to give security guarantees to Armenia when it believes it remains vulnerable to other external threats, notably from Turkey, and there continues to be security interdependence between Russia and Armenia. Moscow may also be ready to threaten more direct responses to Armenia if it veers far from Russian interests.

Azerbaijan has sought to diminish Russia’s security leverage, notably through a commitment over several decades to building ties to other military partners (Turkey and Israel). But an equally important element of managing the Russian security threat has been Baku’s decision to eschew EU and NATO integration – a decision taken to a significant degree in light of the lesson of the 2008 Russo-Georgian War that the Euro-Atlantic community is not ready to challenge Russia militarily in the region. To underline that it does not seek to break away completely from Russia, Azerbaijan has sought to identify a positive agenda of alternative policy areas for cooperation with Russia where it can shape a partnership in its interests.

▲ Figure 2: Key South Caucasus Transport Routes. Source: Tanvir Anjum Adib/Wikimedia. Edited by RUSI.

Transport and Communications

Moscow’s most important policy shift regarding the changing political and economic dynamics of the South Caucasus is the new emphasis given to the region as a zone for trade and communications (see Figure 2). The breakdown of ties with the Euro-Atlantic community, the imposition of sanctions and the closing of some markets has effectively forced Russia to reorient its economic policy on a north–south axis, away from the previous east–west axis. Moscow’s efforts to reorient its external economic relations, as part of the wider shift in its foreign and security relations brought about by the Ukraine war, are already having significant results, as trade along a north–south axis, notably with Iran and India, has increased substantially in recent years.

In this context, the key project for Russia is the International North–South Transit Corridor (INSTC), a series of rail, ship and road routes connecting Russia to Iran and its Gulf ports and beyond, to South and East Asia. The most promising route goes through Azerbaijan, the only country that borders both Russia and Iran, and which already has a railway connecting Russia and Iran. While the INSTC has been on the drawing board since 2005, it has gained new impetus since the war in Ukraine and Western efforts to isolate Russia economically. In May 2023, Russia and Iran agreed to complete, by 2027, the construction of a railway from the Iran–Azerbaijan border, at Astara, to Rasht in northern Iran, which represents the last missing rail link to connect St Petersburg to the Gulf. Realisation of the INSTC is a strategic goal for Moscow, supported by Iran and India, but Russia is likely to be the main funder of any new infrastructure, in view of its pressing need to bypass Western sanctions.

The focus on connectivity in the South Caucasus is giving Russia a new direction for its security policy. Russia is aiming to assert a security role in the South Caucasus transport network to unblock the regional transport network on its terms and, thereby, provide Moscow with important regional leverage. For this reason, the Zangezur Corridor has become a particular focus for Russian diplomacy and a key interest in the wider Armenia–Azerbaijan peace negotiations.

Citing provisions on Russian security personnel managing the land corridor in the 2020 Armenia–Azerbaijan ceasefire agreement brokered by Moscow, the Kremlin insists on its presence along the corridor. If it were able to exert influence on the region’s transport networks, Moscow would gain new leverage over the countries of the South Caucasus, including Georgia, which currently is the main axis for north–south trade. Russia has sought to channel negotiations on transport links into the 2021 tripartite commission on this issue that it convenes with Armenia and Azerbaijan, and into key bilateral formats.

Pivot to Azerbaijan, Monitoring Georgia

A third key component of Moscow’s evolving policy towards the South Caucasus is a deepened partnership with Baku. Azerbaijan has emerged as the leading regional state as a result of its military successes against Armenia, its ability to build a latticework of external partners, and its balancing policy towards Russia. Indeed, Azerbaijan is now essential for Russia in terms of energy exports and its transport links to Iran. The Kremlin has stressed that Azerbaijan is a “stable” partner in the region, and has spoken of the bilateral relationship in warm terms as having an “alliance” character.

Azerbaijan has been able to use its newfound regional leverage to bypass Russia’s efforts to manipulate regional conflicts – ignoring Russia’s demands over Nagorno-Karabakh, forcing the withdrawal of Russian peacekeepers, and sidelining Moscow’s role in mediating the Armenia–Azerbaijan relationship – all while maintaining a degree of support for Ukraine. But Baku has lined up behind Russia on Moscow’s interests where they largely align with those of Azerbaijan. Together with Russia, Azerbaijan has been critical of Armenia’s efforts to reach out to the Euro-Atlantic community, and it has opposed the deployment of an EU border-monitoring mission to the region. Azerbaijan is also publicly supporting Russia’s position on transport corridors across Armenia, even if there are suspicions that Baku would also be keen to leave Russia out of the route.

While Azerbaijan is now Russia’s main regional partner, Moscow is paying close attention to contemporary developments within Georgia. Since the Rose Revolution, Georgia has been the anchor of the Euro-Atlantic community’s regional engagement, and in 2023, the EU granted Tbilisi candidate status. However, despite movement on some bureaucratic processes, the integration of Georgia into the Euro-Atlantic community has been effectively frozen following the 2008 Russo-Georgian War, reflecting the reluctance of the US and its European allies to challenge directly Moscow’s security commitment to Abkhazia and South Ossetia.

Since the Georgian Dream political party – established and led by the billionaire Bidzina Ivanishvili – entered government in Tbilisi in 2012, Georgia has followed a twin-track policy of seeking to advance NATO and EU memberships while also pursuing a policy of gradual normalisation with Moscow. With Euro-Atlantic integration unable to make real progress and with the turn to increasingly authoritarian domestic politics in Georgia in recent years, the relationship between Tbilisi, Washington and Brussels has deteriorated significantly.

At the same time, the normalisation process with Russia has continued, even in the difficult context of the war in Ukraine. While there is little evidence that Russia has driven the breakdown in ties between Georgia and the Euro-Atlantic community, Moscow has opportunistically sought to benefit. The Georgian government has also given the impression that it is ready to move closer to Moscow if the US and Europe continue to set democracy and human rights conditions that are unacceptable to Georgian Dream.

Against this background, the October 2024 parliamentary elections were seen as a critical test of Georgia’s future. With Georgian Dream claiming victory in the disputed elections, relations with the Euro-Atlantic community appear set to deteriorate further. Following the election, the US and European countries called for an investigation into how it was conducted and, in particular, the steps taken ahead of the vote by the ruling party to ensure its victory. US President Joe Biden publicly raised concerns about the decline of democracy in Georgia.

At the same time, having offered ahead of the election to facilitate Georgia’s territorial disputes as a means to promote support for Georgian Dream, Moscow will need to demonstrate that it can deliver progress on a new relationship between Georgia and the two breakaway regions that will satisfy Tbilisi. Given Moscow’s strategic investment in the nominal independence of these regions, the prospects of significant shifts over the status of Abkhazia and South Ossetia are, however, slim, likely placing an important check on how far Russia–Georgia rapprochement can advance. The Georgian government may well move closer to Russia to test Moscow’s offer, but is likely to continue to pursue multi-alignment in its foreign and security policies rather than joining Russia’s regional organisations such as the CSTO or the EAEU.

Economic and Trade Relations

As an economic actor, Russia remains vital for the countries of the South Caucasus. Indeed, sanctions on Russia over its invasion of Ukraine have strengthened interdependence between Russia (and, via the EAEU, Belarus and Central Asia) and the countries of the region. The Ukraine war is having far-reaching impacts on the geo-economics of the South Caucasus, with the region’s role as an energy and trade corridor becoming even more significant, notably for Russia.

Georgia serves as an example for Moscow of how – despite the political tensions between the two governments over the occupied territories – economic cooperation has a positive impact on relations. Indeed, trade with Russia has continued to be strong in recent years. Since 2021, Georgia’s economic dependence on Russia has increased, with some sectors reliant on the Russian market. For example, in 2023, wine exports to Russia increased 5% on the previous year, with the Russian market taking 65% of Georgian wine exports, the highest level since 2013. Although there is widespread Georgian public distrust and even hostility to Russia, views on closer economic relations are mixed.

For Armenia, despite the political rhetoric about souring ties, economic relations continue to flourish, with a notable rise in exports following the onset of the Ukraine war – widely seen as a result of Armenia (alongside Georgia) becoming a route to Russia for goods that avoided sanctions. Russia is Armenia’s largest trading partner, with an overall foreign trade volume in 2023 of more than 35% and notably 49.6% of Armenia’s imports coming from Russia. In 2022, the volume of trade between Armenia and Russia nearly doubled, a trend that continued through 2023 and the first months of 2024. In 2023, Russia’s over 35% share of the country’s foreign trade contrasted with the EU’s 13%. Russian companies also have considerable investments in Armenia, notably owning key parts of the energy sector and the railways, and make a substantial contribution through taxes to the national budget.

For Azerbaijan, which has sought to diversity its economic as well as security policy, economic ties with Russia are following a similar trajectory to its neighbours. In 2023, trade between Azerbaijan and Moscow was reported to have risen by 17.5%. Bilateral energy trade has also developed in recent years.

Cooperation with Regional Powers

It would appear that Russia has implicitly accepted that it can no longer maintain primacy in the South Caucasus and that other, notably regional, powers will have roles. The Russian regionalisation policy aims at intensifying dialogue, coordination and interaction with the main regional powers engaged in the South Caucasus. Moscow has, however, tried to maintain a regional leadership position through seeking to manage informal cooperation – and competition – with Turkey and Iran. Iran has become a key ally for Russia on the international stage and both countries share an interest in developing closer ties and north–south trade links. On 25 December 2023, the EAEU signed a free-trade agreement with Iran that will eliminate customs duties on almost 90% of goods, thereby linking Russia’s regional economic integration initiative to its efforts to build a wider bloc of friendly countries beyond the post-Soviet space. While Turkey and Russia cooperate and compete in various theatres (often articulated through tactical alliances), including in the South Caucasus, they share an interest in establishing a new regional strategic equilibrium around a potential peace settlement of the Armenia–Azerbaijan confrontation.

Institutionally, Russia supports the 3 + 3 South Caucasus Regional Cooperation Platform format, which sets the stage for the direct participation of Iran and Turkey in determining the future of the region – although Georgia has, to date, boycotted the grouping. Speaking at the October 2024 meeting of the 3 + 3 format, Russian Foreign Minister Sergei Lavrov indicated that Armenia and Azerbaijan should use the platform to negotiate their peace agreement.

The Armenia–Azerbaijan Peace Settlement

A resolution of the bitter Armenia–Azerbaijan relationship through a peace agreement and subsequent process of normalisation stands at the centre of the potential transformation of the South Caucasus. Agreement between Baku and Yerevan would open the region for investment in transport, trade, energy and communications projects, unlock closed borders, and create some of the conditions for Armenia–Turkey normalisation. The nature of an agreement would also have a profound impact on the balance of power within the South Caucasus. For these reasons, the negotiations between Armenia and Azerbaijan have become a focus of external actors, with Russia, the EU (notably France and Germany) and the US jockeying for influence and a role in the negotiations.

With Azerbaijan’s victory in its two military campaigns in 2020 and 2023 to reclaim the occupied territories and the Nagorno-Karabakh region, Russia’s previous leverage around the protracted conflict collapsed as the OSCE Minsk Group process (the diplomatic mechanism established in 1992 to facilitate negotiations to end the conflict over Nagorno-Karabakh under the co-chairmanship of the US, Russia and France) was marginalised, Moscow’s leverage as the leading arms supplier to both sides evaporated, and Baku sought to move negotiations between different formats and ultimately to push successfully for direct bilateral Armenia–Azerbaijan contacts as the way forward to exclude third parties (principally Russia, the US and the EU).

With the departure of Russian “peacekeepers” from Nagorno-Karabakh in April 2024, as well as pressure on the Russian relationship with Armenia, Moscow’s ability to use security to shape developments on the ground has been undermined. Instead, it has sought to reposition itself diplomatically to shape developments so that an eventual peace agreement would also serve Russian interests.

Moscow’s goals have been to ensure that Russia has a central role in any agreements about the future shape and management of land transport and communications infrastructure in the South Caucasus, that the Euro-Atlantic community is marginalised, and that the region’s immediate neighbours (Russia, Turkey and Iran) emerge as the key regional arbiters – with Moscow in the lead role. Russia has sought to insert itself into the key issue of a transport corridor across Armenia and to ensure that the INSTC, which is vital to its ability to build economic and trade links to the south, goes ahead. Moscow views a role in these areas as critical to ensuring its regional influence, notably in the Armenia–Azerbaijan relationship.

The partnership with Azerbaijan has become central to Russia’s efforts to advance this agenda – notably as the transatlantic community has increasingly aligned to support Armenia, leading to growing tensions with Baku. In August 2024, the visit of Russian Security Council Secretary Sergey Shoigu to Baku underlined how the variety of Russian regional interests are now being channelled through the bilateral relationship. In a meeting with President Aliyev, Shoigu highlighted the intersection of the peace negotiations, the development of the INSTC and the future agenda of the 3 + 3 format to manage the stabilisation of the South Caucasus, with efforts to prevent Western “meddling” in the region.

Conclusion: Russia Retying the Caucasian Knot?

For most of the past two hundred years, Russia has pursued relatively stable strategic goals in relation to the South Caucasus region. At the core, Russia has focused on binding the region to itself, as a buffer zone against external encroachment. In more expansionist foreign policy phases, such as since the turn of the 21st century under Putin, the region has been seen as integral to ambitions to extend Russia’s influence and control in the Black Sea and Caspian Sea regions, as well as the Middle East. At such times, the territories and peoples of the South Caucasus have also often been viewed by Moscow as part of a wider Russian world.

With the South Caucasus undergoing a transformation, notably as result of geopolitical and geo-economic trends towards multipolarity, Russia’s regional role is displaying elements of continuity, but is increasingly characterised by change. Much of the analysis of the region sees Russia as experiencing a “managed decline” or loss of hegemony because of this process of change. The analysis in this paper, however, points to a different conclusion. Moscow is attempting to refashion its position through a renewed regional approach – seeking to retie the Caucasian knot to ensure a continuing central role for Russia in the South Caucasus, retain close links to countries in the region, and marginalise the Euro-Atlantic community.

Over the past two decades, geopolitical competition with the Euro-Atlantic community in the region has been the key challenge to Russia’s ability to achieve its longstanding strategic goals. In this struggle, the Kremlin has deployed security policy as Russia’s trump card. Up until 2020, it was customary to assume that Russia’s goal in the South Caucasus was to use its security advantage to preserve a favourable status quo. Moscow’s current policy towards the region reflects a shift in some respects from this approach and indicates a changed significance of the South Caucasus in Russia’s strategic calculus.

Moscow has recognised that the changes in the international politics of the South Caucasus towards multipolarity have provided opportunities for the countries in the region to pursue policies of multi-alignment. This has meant that Russia can no longer approach the region as though it remains part of the post-Soviet space where it has an exclusive role, and some of its past policy levers have lost traction – notably in respect to the Armenia–Azerbaijan conflict. At the same time, the breakdown of ties with Europe and the US has forced Moscow to seek to reorient its foreign and economic ties south and east.

Russia now looks on the South Caucasus not just as a buffer against the Euro-Atlantic community and a means to strengthen its power projection ambitions in the Black Sea and the Middle East, but also as a vital link to Iran, as well as the location of potential southern routes to access markets and build political and security ties across Eurasia. Russia is therefore rebalancing and realigning its policies to continue to be a central regional player in the South Caucasus, even if this requires a shift from its previous reliance on security policy and the ambition to exclude other external powers from the region.

Moscow is today willing to accommodate and even cooperate with other international actors, notably Iran, China and even Turkey, in the South Caucasus, and it has also adapted by developing new and varied bilateral ties with the three South Caucasian states to shape the regional agenda, particularly on economic and transport issues. However, the Kremlin remains focused on blocking Euro-Atlantic integration efforts in the region, and is willing to work with other regional powers to advance this goal. Indeed, Moscow is now looking to develop its new approach in the South Caucasus as part of a larger Eurasian security initiative, driven, together with China, Iran and other partners, as a counter-West bloc.

Moscow is also experiencing real challenges in forging a new approach to the South Caucasus. It is having to contend with an increasingly complex region in which not only is there a diversity of other, often competitive, external actors, but also the governments of the region have a new degree of agency in developing their foreign relationships. As a result, Moscow is facing resistance to its efforts to insert itself within the central issues that could reshape the regional order, notably the Armenia–Azerbaijan peace agreement and the associated initiatives to open the region’s transport network.

Faced with the prospect of being marginalised from the peace process, Putin made a rare state visit to Baku in August 2024 to promote Moscow’s regional role. The visit was marked by positive words, photo opportunities and commitments to cooperation (notably on the INSTC). Putin appeared, however, unable to reverse the steps that have seen Russia pushed out from its former regional role. Critically, since the early 1990s, Russia – together with the US and Europe – has been at the centre of diplomatic efforts to resolve the Armenia–Azerbaijan conflict. Since 2020 and the Second Nagorno-Karabakh War, Baku has, however, managed to exclude major third parties from discussions, even turning to Kazakhstan to host peace negotiations.

During his visit to Baku, Putin indicated, with a degree of desperation, that he would “be happy” to serve as a regional peacemaker, but neither Baku nor Yerevan has responded positively. At the same time, the decision of Armenia and Azerbaijan to exclude the issue of the Zangezur Corridor from discussions on a peace agreement struck a direct blow to Moscow’s efforts to reinsert itself between the two countries, leading to further, unsuccessful Russian diplomatic efforts.

Russia’s South Caucasus policies are thus at a key moment. Moscow has recognised the importance of the shifts taking place in the region and is taking action to try to ensure that it remains a key regional player. Despite the advantages that Russia has as a consequence of history and geography and the country’s strong security policies, it is nevertheless facing a struggle to reposition itself in the South Caucasus. There is a real prospect that the Kremlin’s efforts to forge a renewed regional role may prove unsuccessful, and Moscow may emerge from the process of realignment a significantly reduced regional force. The high-level political engagement in the region, notably signalled by Putin’s visit to Baku, suggests, however, that the Kremlin is prepared to commit significant political capital to ensure that Russia remains a leading regional actor, and to show that Moscow is not ready to accept a diminished role.

Implications for the Euro-Atlantic Community

The changing geopolitics of the South Caucasus and Russia’s shifting regional approach pose a challenge for the Euro-Atlantic community. Over the past two decades, the prospect of eventual EU and NATO integration has been the main policy framework to build support and attract regional states. The approach marries values – in support of human rights, rule of law and democratisation – with a geopolitical approach to counter Russia and its integration offer, notably through access to European markets and financial assistance.

Since 2008, Moscow has, however, been able to thwart Euro-Atlantic integration through its dominance of regional security politics. Unwilling to challenge Russia’s security trump card, the Euro-Atlantic community has officially followed an open-door policy for NATO and EU membership for Georgia, and maintained a readiness to advance ties to Azerbaijan and Armenia if there is an opportunity. In reality, the EU and NATO tracks have effectively been stalled, even in the case of Georgia, which has been at the forefront of building ties.

With shifts in the international politics of the South Caucasus, a policy built on “strategic patience” is well past its expiry date. The changes that have affected the South Caucasus have shifted the region from being an exclusively European security region, as it was in the decades after the collapse of the Soviet Union, to one increasingly linked to the Middle East, South Asia and China. The countries of the South Caucasus now have alternative partners to the Euro-Atlantic community (and Russia), notably for trade, infrastructure investment and business, but also for the supply of weapons and for diplomatic ties. While these ties may lack the potential of Euro-Atlantic integration, they offer immediate and tangible gains, especially in comparison to the promise of a bright future of EU and NATO membership that never seems to quite arrive.

The links to other external actors generally also come without the formal conditionality attached by the Euro-Atlantic community. The development of multipolarity has, in this way, reinforced the ability of local elites to advance illiberalism. As a result, Russian-style authoritarian politics has taken hold in Georgia and is consolidated in Azerbaijan, while democratisation remains fragile and vulnerable in Armenia. With this shift, the idea that the region will become part of the Euro-Atlantic community through eventual EU and NATO membership looks unrealistic.

This presents a dilemma for the Euro-Atlantic community: either continue to criticise non-democratic governments and risk them shifting orientation to Russia and others, or try to retain engagement but then face working with regimes that do not reflect Western values. In either option, Euro-Atlantic integration will struggle to advance. In recent years, Georgia has represented this challenge most starkly. The adoption of increasingly antidemocratic practices by Georgian Dream, the ruling party, and the cultivation of a diversity of external ties have seen a withdrawal of Euro-Atlantic security and economic support. After decades of effort to advance Tbilisi as the key Euro-Atlantic partner in the South Caucasus, Georgia was largely absent from the Washington NATO Summit Communique in 2024. An EU report on Georgia’s progress towards membership that appeared immediately after the October 2024 election appeared to indicate that the membership process was effectively frozen.

As the Euro-Atlantic position has weakened in Georgia, there has been an effort to pivot to Armenia, including supplying security assistance and even military equipment. This will add little to Armenia’s overall defence and deterrence, but the shift risks being seen as taking sides within the region, further accelerating the militarisation of the South Caucasus and contributing to the emergence of a new round of internal divisions just as the prospects of a new regional settlement are emerging. In any case, Armenia’s prospects for Euro-Atlantic integration will be constrained by the same developments that have affected the other countries of the region – Russia’s readiness to use its range of policies, and centrally its willingness to use security and military tools, to prevent Euro-Atlantic enlargement, and the appearance of attractive alternative international partners.

The risks for the Euro-Atlantic community of failing to find an effective means of engagement in the region are highlighted by Azerbaijan. Having turned away from Euro-Atlantic integration, Baku has been able to consolidate its authoritarian political order and reclaim the occupied territories and Nagorno-Karabakh, employing approaches that have led to ethnic cleansing. Euro-Atlantic actors appear largely powerless regarding either development. Indeed, Europe has been keen to develop closer energy and transport links to Azerbaijan, even as Baku has followed this domestic and foreign policy course.

The Euro-Atlantic community must now look at the emerging regional realities and craft a regional policy capable of influencing contemporary developments. Given the broader confrontation with Russia, weakening Moscow’s presence in the South Caucasus and disrupting its efforts to rebuild a new regional position for itself should be at the heart of a regional strategy for the Euro-Atlantic community. A key emphasis should be on countering Moscow’s efforts to position itself in the regional trade and communications infrastructure to support its war effort and reinforce its strategic partnership with Iran.

The focus of Western policy should be on strengthening the sovereignty and independence of regional states and their ability to balance Russia through multi-alignment (in which context the Euro-Atlantic community can remain a leading partner), and to undermine Russia’s efforts to control them or to shepherd them into regional and international formats (such as the 3 + 3 and the BRICS) that exclude Europe and the US. This approach should also include supporting and investing in projects such as the Middle Corridor that will help economic diversification and promote external investment, while seeking to constrain projects that strengthen the Russia–Iran north–south axis and enable Moscow to reshape regional trade and transport around its own agenda.

Supporting the Armenia–Azerbaijan peace process, including measures to build trust and confidence to overcome the legacy of conflict, will be critical, as this agreement is central to opening the region. To play such a role, the Euro-Atlantic community will need to be more effective in balancing its approaches with Armenia and Azerbaijan. Rebuilding a political relationship with Baku, which is increasingly the regional agenda-setter, to go beyond energy cooperation will be a necessary step to balance Moscow–Baku ties. If peace can be achieved, there will also be opportunities to advance regional cooperation among the South Caucasus countries, which Russia has effectively undercut to date, and which can help to balance Moscow’s policies by strengthening regional balancing.

While domestic political forces more favourable to the West may re-emerge in the countries of the South Caucasus, the geopolitical and geo-economic context in the region militates against the Euro-Atlantic integration model regaining traction, with its interdependent security, normative and economic elements. Russia has begun to adapt its approach to the South Caucasus as the region undergoes change, and so must the West. Support for democracy and human rights should be pursued, where realistic, but its prioritisation will need to be balanced with the geopolitical imperative of building relationships to counter Russia and its major allies.

Enhancing coordination with Turkey on regional issues should be a priority. Ankara is continuing to strengthen its South Caucasus interests and engagement as part of a broader strategy reaching to Central Asia and across the Black Sea. An opening of the South Caucasus would inevitably see an even greater Turkish presence. As a NATO member, Turkey is uniquely placed to strengthen regional security that aligns with the wider interests of the Euro-Atlantic community, if common cause can be promoted.

Without a readiness to adapt, the Euro-Atlantic community is likely to face a growing regional marginalisation and the prospect that Russia will be able to reposition itself, while the countries of the South Caucasus are likely to be drawn increasingly into regional and international groupings that exclude the US and Europe. To challenge Russia effectively and to rebuild regional influence, the Euro-Atlantic community will need to recalibrate its policies and move beyond approaches that have lost the ability to shape regional developments effectively.

This will involve difficult trade-offs, including working with non-democratic regimes. It will also mean being ready to acknowledge that the South Caucasus is unlikely to be part of a wider Europe, and so should be approached through the sort of foreign and security policy frameworks that are applied to other such parts of the world, rather than through integration. While such a shift will be challenging, Russia is at a uniquely vulnerable moment in the South Caucasus as the region undergoes far-reaching change. Although Russia is already active in repairing its position, the Euro-Atlantic community nevertheless has an opportunity to help facilitate a regional realignment that could substantially constrain Moscow.

Neil Melvin is Director of the International Security research group at RUSI. Prior to joining RUSI, he was Director of the Armed Conflict and Conflict Management Programme and then Director of Research at the Stockholm International Peace Research Institute (SIPRI). He has held senior adviser positions in the OSCE and the Energy Charter. He has published widely on the international and security politics of the South Caucasus.