After the US and Israel launched coordinated strikes on Iran on February 28, east‑west commercial air traffic was funneled into a narrow corridor over the South Caucasus. That air route shift highlights a deeper change on the ground: the region has become a pivotal segment of the Trans‑Caspian International Transport Route, known as the Middle Corridor, which links Europe and China while avoiding both Iran and Russia by routing through Central Asia and the South Caucasus.
The war in Iran has sharpened the corridor’s strategic importance. Disruption of the Strait of Hormuz, which handles roughly 20% of the world’s oil and LNG shipments, would strain global energy supplies. The Bab el‑Mandeb and the Red Sea, carrying about 12% of global trade, have also been repeatedly disrupted by the Houthi militia in Yemen, which is linked to Iran. Detours around the Cape of Good Hope add more than ten days to journeys between Asia and Europe, making alternative land routes more attractive.
Geographically the Middle Corridor is the shortest land route between Europe and China and is intended to carry not only manufactured goods but also critical minerals and Central Asian energy to European markets. Both the EU and China have pledged billions to upgrade ports, rail lines and roads along the route. Freight volumes moving along the corridor have quadrupled since 2022, and the World Bank projects they could reach about 11 million tons by 2030.
Regional analysts see rising strategic value for the South Caucasus. “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, predicts that over the medium to long term the Middle Corridor will become one of the main overland routes linking the EU and China, elevating Georgia, Azerbaijan and Armenia as key transit states.
Azerbaijan, abundant in energy resources, stands to gain in the near term from higher oil and gas prices; independent estimates have suggested additional revenues of roughly $500–600 million a month. Baku has also increased natural‑gas shipments to help offset shortfalls from the Gulf. Europe currently imports about 4% of its gas from Azerbaijan—around 12.8 billion cubic meters—with plans to raise that to roughly 20 billion cubic meters by 2027.
At the same time, conflict undermines trade and investment. “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 Iran conflict, but relations with Tehran remain tense. Iranian officials have long protested Azerbaijan’s deepening ties with Israel; in 2025, Israel received about 46.4% of its oil from Azerbaijan via the Baku‑Tbilisi‑Ceyhan pipeline, and Azerbaijan sources much military equipment from Israel.
Tensions have flared. On March 5, four Iranian drones struck an airport in Azerbaijan’s Nakhchivan exclave. Baku called the attack a “terrorist act,” threatened retaliation, and briefly halted freight traffic from Iran. The immediate escalation eased after a direct conversation between the leaders of Iran and Azerbaijan, but the incident raised fresh uncertainty. Azerbaijani officials also reported thwarting alleged sabotage attempts by Iran’s Islamic Revolutionary Guard Corps against the BTC oil pipeline and the Israeli embassy in Baku.
A prolonged or widening conflict could jeopardize major regional projects, including the Trump Route for International Peace and Prosperity (TRIPP), which was agreed as part of the US‑brokered settlement between Armenia and Azerbaijan. TRIPP envisions a 43‑kilometer road and rail passage through Armenia linking mainland Azerbaijan to its exclave Nakhchivan and on to Turkey, reopening a border that had been closed since the Nagorno‑Karabakh conflict. The United States has strongly backed TRIPP, viewing it as an important supply line for critical minerals; the corridor is planned to be constructed and managed by a US‑led consortium. Iran has expressed skepticism about US involvement given the corridor’s proximity to its border, and some Iranian advisers have criticized the project. Construction is not scheduled to begin until the second half of 2026.
Ultimately, the South Caucasus has a strong interest in preserving regional stability. Azerbaijani officials and analysts say Baku does not want Iran to collapse or for the war to drag on, because prolonged instability would increase economic uncertainty, raise security risks and could trigger a refugee flow from a country that includes more than 20 million ethnic Azeris. From Baku’s perspective, a weakened but territorially intact theocratic Iran—isolated diplomatically but not disintegrated—helps preserve Azerbaijan’s role as a reliable economic and geopolitical bridge between East and West.
Edited by Srinivas Mazumdaru.