In the hours after the US and Israel began conducting joint strikes on Iran on February 28, east‑west air traffic was forced into a narrow corridor over the South Caucasus. What is new in the skies has been developing on the ground: the region has become a key link in the Trans‑Caspian International Transport Route, the Middle Corridor, which connects Europe and China while bypassing Iran and Russia via Central Asia and the South Caucasus.
The Iran war has sharpened the Middle Corridor’s importance. If the Strait of Hormuz — which handles roughly 20% of global oil and LNG shipments — is disrupted, global energy flows suffer. Meanwhile, the Bab el‑Mandeb Strait and Red Sea route, carrying 12% of the world’s trade, has been repeatedly disrupted by the Iranian‑linked Houthi militia in Yemen. Rerouting around the Cape of Good Hope adds more than ten days to Asia‑Europe journeys.
The Middle Corridor, the shortest geographical route between Europe and China, is meant to move Chinese goods plus critical minerals and Central Asian energy to Europe. Both the EU and China have pledged billions to upgrade ports, rails and roads along the route. Cargo volumes along the corridor have quadrupled since 2022, and the World Bank estimates volumes could reach 11 million tons by 2030.
Analysts say the South Caucasus stands to gain strategic value. “For this region, this is an opportunity within this crisis,” says Richard Giragosian, director of the Regional Studies Center in Yerevan. Kornely Kakachia, a politics professor in Tbilisi, adds that in the mid to long term the Middle Corridor will be one of the main EU‑China land routes, elevating Georgia, Azerbaijan and Armenia as pivotal transit states.
Energy‑rich Azerbaijan may see short‑term gains from higher oil prices. Analysts have estimated extra revenues of $500–600 million a month. Azerbaijani officials say they are increasing natural gas shipments to make up for Gulf shortfalls. Europe currently receives about 4% of its gas from Azerbaijan (roughly 12.8 billion cubic meters); that is slated to rise to about 20 billion cubic meters by 2027.
But conflict also undermines trade. “For the Middle Corridor to be successful, it needs stability from China to the EU and around the South Caucasus,” Kakachia says. Georgia, Azerbaijan and Armenia have declared neutrality in the war, but tensions with Iran persist. Iranian officials have long criticized Azerbaijan’s deepening ties with Israel; in 2025 Israel received 46.4% of its oil from Azerbaijan via the Baku‑Tbilisi‑Ceyhan pipeline, and Azerbaijan sources much of its military hardware from Israel.
On March 5 four Iranian drones struck an airport in Azerbaijan’s Nakhchivan exclave. Azerbaijan called the strike a “terrorist act,” threatened retaliation, and briefly suspended freight traffic from Iran. The escalation eased after a direct call between Iran’s and Azerbaijan’s leaders, but the incident increased uncertainty. Azerbaijani authorities also said they thwarted alleged sabotage attempts by Iran’s Islamic Revolutionary Guard Corps targeting the BTC pipeline and the Israeli embassy.
A prolonged conflict could endanger major corridor projects, including the Trump Route for International Peace and Prosperity (TRIPP), agreed under a US‑brokered peace deal between Armenia and Azerbaijan. TRIPP envisions a 43‑kilometer road and rail corridor through Armenia linking Azerbaijan to Nakhchivan and Turkey, reopening a border closed for decades by the Nagorno‑Karabakh conflict. The United States has strongly backed TRIPP, viewing it as a supply line for critical minerals; the project is to be built and managed by a US‑led consortium. Iran has been skeptical of US involvement given the route’s proximity to its border, with some Iranian advisers denouncing it sharply. Construction is not scheduled to begin until the second half of 2026.
Ultimately, the South Caucasus has an interest in regional stability. Azerbaijan, in particular, does not want Iran to collapse or for the war to persist, officials and analysts say, because that would increase uncertainty, economic instability and risk a refugee influx from a country with more than 20 million ethnic Azeris. For Baku, a weakened but intact theocratic Iran — isolated internationally — preserves Azerbaijan’s value as a stable economic and geopolitical link between East and West.
Edited by: Srinivas Mazumdaru