Armenia-Iran Secret Arms Deal: Implications For The South Caucasus – Analysis

Last month, several media outlets reported that Iran and Armenia covertly finalized a $500 million arms deal. This deal, notable for its scale and the inclusion of advanced military technologies such as drones and air defense systems, represents the latest move by Tehran in re-establishing its influence in the Caucasus. The deal includes a variety of Iranian-made drones like the Shahed series and air defense systems such as the Sevom Khordad, rejuvenating military cooperation between the two nations.

While not officially confirmed by either country, the widely reported details of the agreement suggest a deepening of military and intelligence ties, including joint training and the prospect of Iranian bases on Armenian soil.

This deal has significant implications for regional powers like Azerbaijan, Turkey, and Israel. Azerbaijan, which has a historically contentious relationship with Armenia, is likely to view this deal with consternation, as the sale of Iranian arms blunts the comparative advantage held by Azerbaijan’s drone fleet, primarily comprised of Turkish imports, in future conflicts with Armenia. Azerbaijan’s strategic implementation of drones was seen as instrumental to its’ victory over Armenia in the disputed Nargorno-Karabakh region, providing valuable insight into the future of warfare and value of air supremacy.

Background and Context of Armenia-Iran Relations

Armenia and Iran share a long history of cultural and economic interactions, rooted in their geographical proximity and shared historical experiences. This relationship is characterized by mutual respect and a pragmatic approach to their economic and political dealings. For centuries, Armenia and Iran have engaged in trade, with economic ties ranging from energy to infrastructure projects.

The 2020 Nagorno-Karabakh conflict, which saw Azerbaijan recapture territories with substantial support from Turkish and Israeli arms, underscored Armenia’s vulnerable position. This conflict strained Armenia’s relations with traditional allies like Russia, while encouraging Yerevan to diversify its arms procurement. Consequently, Iran has emerged as a critical partner for Armenia, especially given Yerevan’s economic and strategic isolation.

The blockade imposed by Turkey and Azerbaijan has severely limited Armenia’s access to international markets, making Iran a vital conduit for trade and energy supplies. A recent example of this includes a January 2024 deal for Armenian access to Iranian ports, including Chabahar, to facilitate Armenian trade with India. In turn, India’s rapidly developing arms industry gains a new export market in Armenia. India has previously sold Armenia its Akash Surface-to-Air Missile (SAM) system, in addition to an updated version of the Pinaka multi-barrel rocket launcher, which first saw service as an effective tool in targeting Pakistani positions in mountainous terrain during the Kargil War.

Iran’s Strategy in the Caucasus

Given its interests in the region, Iran has taken a balanced approach in its relations with both Armenia and Azerbaijan. Azerbaijan’s relationship with Israel, marked by significant military and intelligence cooperation, is a particular point of concern for Iran. Tehran fears that Azerbaijan could serve as a base for Israeli operations, including surveillance and potentially military actions against Iran. Iran has made its concerns know to Armenia regarding inroads made by Iran’s adversaries in the South Caucasus. Furthermore, Armenia is engaged in a delicate balancing act that saw it just last month wrap up joint military drills with the United States, a message directed toward Russia amid its weakened position in Armenia.

One of Iran’s primary strategic interests in the Caucasus is preventing any changes to international borders, which could disrupt the regional balance of power and Iran’s own geopolitical position. A critical concern is the proposed Zangezur Corridor, which would connect Azerbaijan to its exclave of Nakhchivan through Armenian territory, potentially bypassing Iranian routes. This corridor would lead to a loss of transit revenues for Iran and could catalyze the next conflict between Armenia and Azerbaijan, as Azerbaijan President Ilham Aliyev has not ruled out constructing the corridor by force in the absence of Armenian accession.

Compared to other regional and global powers, Iran’s interests in the Caucasus intersect in several areas. While Russia has traditionally been a key ally of Armenia, its recent reluctance to fully support Yerevan has created a vacuum that Iran is eager to fill. Meanwhile, Turkey, a staunch ally of Azerbaijan, has consistently supported Baku with essential defense technology, with the recent sale potentially setting up a telling showdown between Turkish and Iranian defense technology should conflict between Azerbaijan and Armenia erupt again.

Turkey’s ambitions, which include expanding its influence through initiatives like the Turkic Council, are viewed with suspicion by Tehran, particularly given Turkey’s strategic ties with NATO. The United States, for its part, has shown interest in the region as part of its broader strategy to counter Russian and Iranian influence. Regarding Azerbaijan-Israeli relations, the former is a key supplier of Israel’s energy needs, and Azerbaijan counts Israel as a critical source of arms and intelligence cooperation.

Conclusion

The Iran-Armenia arms deal is a significant development with broad geopolitical implications. It underscores Iran’s strategic ambitions in the Caucasus and its desire to counterbalance the influence of other regional powers, particularly Turkey and Israel. The deal also reflects Armenia’s urgent need to modernize its military and diversify its international partnerships amid its isolation and security challenges. By focusing on closing the asymmetrical advantage in air superiority held by Azerbaijan, Armenia seeks to fortify its capacity to respond to future threats and prevent a similar setback as seen in the 2020 war.

Arman Sidhu is an American writer and educator. He is a doctoral candidate at Arizona State University and his work has previously appeared in Geopolitical Monitor, The Diplomat, Foreign Policy Journal, and Economic & Political Weekly, among others.