Iran-Azerbaijan: Tensions and Transit Cooperation


Iran-Azerbaijan: Tensions and Transit Cooperation

Over the last three years, Iran-Azerbaijan relations have become increasingly tense. Both the previously existing problems and the new ones arising after the war in Artsakh have soured bilateral relations. Despite these tensions, there are areas where the cooperation continues to develop.

Text: Zhanna Vardanyan


Bad blood between the neighbors 

After the 2020 war in Artsakh, Azerbaijan's promotion of the so-called ՛Zangezur Corridor՛ strained its relations with Iran. Over the recent months, this tension has reached its peak.

In a broader sense, such tensions are not something new. There have been deep-seated issues between the two countries that have surfaced from time to time in previous years, causing friction. These problems include:

  • Azerbaijan's relations with Israel,
  • Iran's religious policies in Azerbaijan,
  • Persecution of Shiite activists in Azerbaijan,
  • Disagreements over the Caspian Sea,
  • Azerbaijan's attempts to provoke separatism in Iran,
  • Azerbaijan's appropriation of Iran's cultural heritage.

The issue of the so-called ‘Zangezur Corridor’ has now been added to these problems, becoming a major source of tension in Baku-Tehran relations for the past three years. The new phase of tension began in the autumn of 2022 and further escalated in January 2023 following the attack on the Azerbaijani embassy in Iran.

Azerbaijan called the attack on the embassy a “terror act” organized by Iranian authorities and used this incident as a pretext to withdraw its embassy staff from Tehran. Meanwhile, there was an increase in arrests of Shiite believers in Azerbaijan, who were detained on charges of either spying for Iran or drug trafficking. Within the context of portraying Iran as a terrorist country, Baku accused Tehran of organizing an assassination attempt on Fazil Musatafa, member of the Azerbaijani parliament. Furthermore, Baku claimed that an Iranian network was planning to carry out terror acts in Azerbaijan.

The culmination of this situation was marked by the opening of the embassy of Azerbaijan in Tel Aviv, Israel, where the Israeli foreign minister claimed that Iran posed a threat to both countries and that he had agreed with Azeri colleagues to create a united front against Iran. In response, Iran condemned the opening of the embassy in Israel at the level of the Foreign Ministry, the Government, and the Parliament, emphasizing that  Israel's goal is to create friction between the two neighboring countries. The Iranian foreign ministry demanded an explanation for the statements about the united front against Iran. Additionally Tehran sent a note of protest to Azerbaijan for the anti-Iranian propaganda in the Azerbaijani media. 

Baku responded to Iran's actions with even more hysterical statements․ Unlike Azerbaijan, Iran has maintained its self-control all this time. Azerbaijan's actions against Iran were and are clearly provocative, and Iran has reacted to them in a much more balanced way.

At the same time, Iran continues to emphasize its commitment to a policy of maintaining good relations with all its neighbors, including Azerbaijan. As part of its efforts to ease tensions, Iran also initiated two phone conversations between foreign ministers․ 


Iran-Azerbaijan cooperation in the transit sphere

Despite the contradictions in Iran-Azerbaijan relations, the two countries have been able to develop cooperation in various fields over the years. One such area is transit cooperation between the two countries as well as along the North-South transit corridor, which, according to Baku, has not been affected by the strained bilateral relations.

The railway passing through Azerbaijan

The North-South international corridor, which is meant to connect India with Russia and Europe, branches off in the territory of Iran into three routes. The western route of the North-South corridor passes through Azerbaijan. Although it has yet to be completed, multimodal cargo transportation is carried out through it. It is about the Qazvin-Rasht-Astara(Iran)-Astara(Azerbaijan) railway, the construction of which has been planned since Azerbaijan joined the North-South project in the mid-2000s. Astara-Astara, the shortest section of the railway, was completed in 2018, while Qazvin-Rasht completed in 2019.

However, the Rasht-Astara section of the railway has not yet been built. It was initially planned to be financed jointly by Iran and Azerbaijan, but the Azerbaijani party failed to implement its commitment. Iran then turned to Russia for financing. Since January 2022, negotiations with Russia are underway. The Iranian side has stated that a final agreement on financing the Rasht-Astara section will be signed in May 2023.

Moscow's interest in the construction of the railway and the full operation of the North-South corridor increased particularly since the outbreak of the war in Ukraine and the sanctions imposed on Russia. Moscow now sees the corridor as a way to solve logistical problems caused by sanctions, as demonstrated by the increased cargo transportation on this corridor in the months of January to March 2023. In this period compared to the same months of the previous year the cargo turnover exceeded 2.3 million tons out of which 2.2 million tons (the increase has doubled)  have been transported via western route.  However, the involved parties have more expectations from the North-South corridor. In September 2022 Iran, Azerbaijan and Russia agreed to increase freight transit through the Corridor to 30 million tons by 2030. 

The land route through Azerbaijan

In addition to the railway, the land route through Azerbaijan is also important for Iran and Russia. In 2021, Iran's customs service spokesperson, Ruhollah Lotfi, reported that 1,051,000 tons of goods worth $504,575,000 were exported to Russia in Iranian calendar year 1399 (March 2020-March 2021). Of that amount, 57% (604,587 tons) were exported through Azerbaijan, with 34% going through the Astara and Bilesuvar checkpoints in Iran-Azerbaijan border and 23% through the Astara railway. The remaining 42% of goods were exported by sea.

In the case of land transportation, the most part of cargo transportation is carried out through the Astara checkpoint. However, in recent years there has been an increase in truck queues here, mainly  due to the high volume of cargo transportation, limited infrastructure, bureaucracy, and, according to Iranian media, problems intentionally created by Azerbaijan. Iranian media have attributed the queues in Astara to Azerbaijan's scheme to keep the Iranian trucks on the border crossings for days thus causing the spoilage of food items transported to Russia.

Iran-Russia trade in 2013-2021. Source:


To address these problems, Tehran agreed with Baku that Azerbaijan would receive more trucks from Iran. It is unclear whether Baku has fulfilled the agreement, but the problem remains unresolved. That is why the Iranian side has recently proposed a technical solution by introducing an online queue registration system.

Azerbaijan and Iran also agreed to build another bridge over the Astara River as a solution to the queue issue. In January 2022, it was announced that they planned to complete the bridge construction in 18 months with joint investments. The fate of the bridge construction is currently unknown. In general, the sound of bilateral cooperation projects has been mostly muted amid tensions between Baku and Tehran.

Iran-Azerbaijan trade.Source: The State Statistical Committee of Azerbaijan


Preferred alternative

The Trans-Caspian route of the North-South corridor is considered to be the most desirable route for Iran, as it provides an alternative to the land route through Azerbaijan, which has been more problematic due to the above-mentioned tensions. However, the Trans-Caspian route also faces challenges, such as the availability of suitable ships for cargo transportation, although in the last two years Iran has been actively engaged in solving these problems. 

The Iran-Turkmenistan-Kazakhstan railway is considered as an alternative route as well, but it faces difficulties in terms of differences in the standard of track gauge. However, the railway was operated in test mode in 2022 and some railway companies in Russia have reportedly reached agreements on discounts for cargo transportation in the eastern direction.

Overall, while there are alternatives to the land route through Azerbaijan, each one of them has its own challenges and limitations, which need to be addressed to increase their effectiveness. Iran is working to develop and improve these alternative routes as part of its efforts to diversify its transit options and reduce its dependence on any single route or country.

Iran is also seeking to diversify its transportation routes and reduce the dependence on Azerbaijan by exploring the possibility of a North-South route through Armenia. Tehran believes that this route can increase the international importance of Armenia and make it more difficult for Azerbaijan to carry out aggression against Armenia. This is exactly what Azerbaijan is trying to disrupt by advancing the ‘Zangezur Corridor’ project, which would serve as an east-west corridor, leaving Iran out and reducing its transit significance.

In summary, there are indeed a significant amount of issues in Iran-Azerbaijan relations, which are likely to keep the level of tensions between those two countries at a stable rate in the long run. However, there are areas where bilateral cooperation continues regardless of the frictions. On the other hand Iran and Azerbaijan manage to advance various projects of cooperation during periods of detente, and the same is likely to happen after the current phase of antagonism. At the same time, Iran is striving to maintain a balance and avoid giving Azerbaijan a leverage to exert influence over it.

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