Iranian Journal of Trade Studies

Iranian Journal of Trade Studies

The Zangezur Corridor and the Armenia-AzerbaijanPeace Agreement: Economic and Trade Implications for RegionalStakeholders, with a Focus on Iran’s Potential Role

Document Type : Regular Papers

Author
Researcher, Foreign Trade Department, Institute for trade Studies and Research, Tehran, Iran.
Abstract
The Zangezur Corridor, renamed the “Trump Path to International Peace and Prosperity” under the USbrokered
peace agreement signed between Armenia and Azerbaijan on August 8, 2025, represents a significant
transformation in the geopolitics of the South Caucasus. From the perspective of international relations, this
study examines the political, economic, trade, and security implications of the corridor for key stakeholders,
including Azerbaijan, Armenia, the United States, Iran, Turkey, and Russia. Developments in 2025 and
projections regarding the 99-year US lease of this 32-kilometer route through Armenia’s Syunik province
suggest that the project could facilitate 50–100 billion dollars in annual Eurasian trade, reduce European
energy costs by 10–15 percent, and reshape regional transportation networks and power dynamics. The
findings indicate that the corridor has the potential to alter the regional balance of power and redefine existing
trade and transit patterns. However, Iran perceives the project as a potential geopolitical and security challenge,
as it may restrict Iran’s northern access to Europe and the Black Sea, reduce transit revenues, and increase
border security risks. The revival of the corridor, rooted in post-Soviet territorial disputes and intensified after
the 2020 Nagorno-Karabakh War, has further increased regional competition and tensions. While Azerbaijan
and Turkey seek to strengthen regional connectivity based on their cultural and ethnic ties, Iran and Russia
remain concerned about the expansion of Western influence in the South Caucasus. Economically, the project
may diversify energy routes and provide alternatives to sanctioned pathways; however, it may also impose a
potential 20–30 percent decline in Iran’s transit revenues. Iran’s strategic responses could include promoting
alternative routes such as the Aras Corridor, strengthening north–south integration with Russia and India
through the International North–South Transport Corridor, and utilizing multilateral diplomatic partnerships
to reduce regional isolation. The study concludes that inclusive diplomacy and alternative connectivity
initiatives are essential for mitigating tensions, balancing competing interests, and promoting sustainable
regional development.The Zangezur Corridor, renamed the “Trump Path to International Peace and Prosperity” under the USbrokered
peace agreement signed between Armenia and Azerbaijan on August 8, 2025, represents a significant
transformation in the geopolitics of the South Caucasus. From the perspective of international relations, this
study examines the political, economic, trade, and security implications of the corridor for key stakeholders,
including Azerbaijan, Armenia, the United States, Iran, Turkey, and Russia. Developments in 2025 and
projections regarding the 99-year US lease of this 32-kilometer route through Armenia’s Syunik province
suggest that the project could facilitate 50–100 billion dollars in annual Eurasian trade, reduce European
energy costs by 10–15 percent, and reshape regional transportation networks and power dynamics. The
findings indicate that the corridor has the potential to alter the regional balance of power and redefine existing
trade and transit patterns. However, Iran perceives the project as a potential geopolitical and security challenge,
as it may restrict Iran’s northern access to Europe and the Black Sea, reduce transit revenues, and increase
border security risks. The revival of the corridor, rooted in post-Soviet territorial disputes and intensified after
the 2020 Nagorno-Karabakh War, has further increased regional competition and tensions. While Azerbaijan
and Turkey seek to strengthen regional connectivity based on their cultural and ethnic ties, Iran and Russia
remain concerned about the expansion of Western influence in the South Caucasus. Economically, the project
may diversify energy routes and provide alternatives to sanctioned pathways; however, it may also impose a
potential 20–30 percent decline in Iran’s transit revenues. Iran’s strategic responses could include promoting
alternative routes such as the Aras Corridor, strengthening north–south integration with Russia and India
through the International North–South Transport Corridor, and utilizing multilateral diplomatic partnerships
to reduce regional isolation. The study concludes that inclusive diplomacy and alternative connectivity
initiatives are essential for mitigating tensions, balancing competing interests, and promoting sustainable
regional development.
Keywords
Subjects

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