After the Iranian deal, Russia’s power struggle in the Caucasus – The Case of Armenia

Introduction

The nuclear agreement between the West and Iran will alter relations between Russia and the Caucasus. In this paper the role of Armenia will be highlighted. Armenia is geo-strategically key. The country is a transit hub for Iranian oil and gas towards the West. Although, such a scenario will hardly be accepted by Russia, whose interest is to keep Yerevan under its control. Any collaboration between Yerevan and Tehran would emancipate the country away from Moscow's orbit. Russia will attempt everything to keep its stakes in the country. In order to avoid losing ground and thus ensuring its dominant role, Moscow has recently stepped up its presence. The ultimate goal therefore, is to keep Armenia dependent on Russia. 

Despite Armenia's key location as a possible transit country for energy supplies between the Middle East and Europe, the country is almost completely isolated. Since its independence from the former Soviet Union, Armenia is surrounded by hostile states. Azerbaijan to the east and Turkey to the west are difficult neighbors. Yerevan fought a brutal war with Azerbaijan over the Nagorno-Karabakh region. Turkey supported Baku in the conflict. Sandwiched between those two hostile countries, Armenia aligned itself with Russia for economic and military support. To the south, relations between Iran and Armenia could not develop mainly due to the sanctions placed on Tehran. 

Russian interventionism – Counter Iranian assertiveness

The agreement concluded between the five UN Security Council Members and Germany and Iran could pave the way for a new and more assertive Iranian role in the region. Iran began to reach out to Yerevan as it eyes the transit potential for Iranian energy supplies to the ports of Georgia, namely Batomi. Talks started on a railway link between Iran and Armenia. However, Russian opposition to the project was so fierce that Iranian officials reconsidered the project and instead focused on Azerbaijan, Armenia's main rival, as an alternative railway route to Georgia (Abrahamyan, 2015). Circumventing Armenia in turn reinforces Yerevan's dependence on Russia and deprives the country from vital investments in order to emancipate from Russian dependence. 

A second project came under constrain and corroborates Russia's assertiveness in the region and thus Armenia's difficult position to loosen ties from the Russian grip on the country: Last summer, Iran and Armenia signed an agreement, reinforcing power links between the two countries. The agreement entails the construction of a third high voltage power line from Iran into Armenia. However, Russia's energy giant Gazprom already dominates Armenia's distribution networks. In order to emphasize and extent its position further the energy company acquired an additional 20 percent of Armenia's natural gas monopoly. Not only does Gazprom possess the rights over the planned power line for energy exports, it also obtained the ownership of the pipeline network which transports Armenian natural gas to the Iranian border. In numbers, Armenia imports 500 million cubic meters gas from Iran. In comparison, 2 billion cubic meters are imported from Russia (Giragosian, 2015).

 “Russian economic troubles caused by a decline in energy prices and Western sanctions implemented […] also triggered economic difficulties in Armenia”

Furthermore, relations between Armenia and Russia were tested last year over the killing of an entire Armenian family by a Russian soldier. More protests have arisen in Yerevan over electricity prices which have been increased by Russian companies. The domestic anger not only originated in increased electricity prices but also in general over the Armenian economic situation which is closely aligned with the Russian economy. Russian economic troubles caused by a decline in energy prices and Western sanctions implemented as a consequence of Russia's involvement in eastern Ukraine also triggered economic difficulties in Armenia. This ultimately caused concerns in Moscow that Armenian protests could evolve in a general discontent over Armenia's stance towards Russia. Relations came additionally under constrain when the European Union and Armenia started negotiations over a new cooperation agreement after Yerevan rejected the Association Agreement with Brussels in 2013. 

Going southwards – Linking Iran and Russia

On the other hand, Russia's position in the Caucasus is complicated and challenged by many factors. As Iran's economy becomes more influential, Moscow has good reasons to extend Russian networks southwards. Historically, Russia's influence in the Caucasus remained unchallenged until the collapse of the Soviet Union. With the disintegration of the Soviet Union, Georgia has taken concrete steps to integrate in Western institutions and Moscow was forced to withdraw its troops from Azerbaijan (Donaldson, Nogee, 2014). Moreover, Baku's unfriendly ties to Iran did not reinvigorate Azerbaijan's willingness to serve as a transit country for Russian and Iranian energy supplies. Meanwhile, Russia's presence in the region could further be challenged by many factors. The most likely challenge stems from the conflict between Azerbaijan and Armenia over the Nagorno-Karabakh region which could turn into a war. Another defiance could originate from an increased military cooperation between Turkey, Georgia and Azerbaijan. At the same time, as described above, Iranian economic activities are increasing in the region after the lifting of sanctions. 

“Russia's attempts to extend infrastructure networks southwards in order to establish direct links to Iran had so far limited success”

Russia's attempts to extend infrastructure networks southwards in order to establish direct links to Iran had so far limited success. Road networks to Iran fell victim to geopolitical hostilities and constrained ties between the Caucasus states themselves or with their relations to Iran, for instance Azerbaijani-Iranian relations (Nichol, 2014). Therefore, the Russian government started to look for more reliable options. One option is to connect Russia with Iran via railways passing Turkmenistan and Kazakhstan. In the framework of the International Transport Corridor North-South the establishment of a direct railway link between Russia and Iran in the Caspian region is planned (Russian Railways, 2015).  

Conclusion

Russia's policy towards the Caucasus, in this paper highlighted with the example of Armenia, is driven by two contrary ambitions.

First, Moscow's priority is to ensure its predominant position in Armenia by preventing the country to move too far away from Moscow's orbit. Any attempt by Yerevan to foster economic cooperation with Iran causes Russia's intervention with the consequence of severely damaging the cooperation and thus preventing Armenia to become more independent from Russia.

Second, Russia itself is looking for ways to benefit from Iran's strengthened position after the lifting of economic sanctions. Although, possibilities are very limited due to intertwined geopolitical circumstances among the Caucasus states and their relations to Tehran. Moreover, Russia's goal to preserve influence in the region seems to be contradictory in light of its policies towards Iran. While it is preventing Armenia from any cooperation with Iran it creates simultaneously hurdles in its ambitions to extend and enforce its infrastructure network southwards. 

In order to advance Russia's own cooperation with Iran and benefit from a strengthened Iranian economy, Moscow has to compromise on its role in the Caucasus. A solution in the Nagorno-Karabakh region can be facilitated if Moscow stops to pit Armenia against Azerbaijan for its own benefit. Moreover, direct links between Russia and Iran could be apprehended through Armenia and Georgia if Moscow allowed for more independent cooperation in the Caucasus states with Iran and instead of jeopardizing them for the sake of concerns over Russian influence in those countries.

Frank Lunemann is a Junior fellow at the CGSRS | Centre for Geopolitics & Security in Realism Studies. He may be contacted at frank.lunemann@cgsrs.org.

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