Kavkaz Files ISSN 2975-0474 Volume 26 Issue 2
Author: Giuliano Bifolchi

Executive Summary

This report analyses recent developments in the bilateral relations between Russia and Azerbaijan, focusing on the outcomes of Russian President Vladimir Putin’s official visit to Baku and its implications for regional geopolitics.

The visit concluded with the signing of several agreements, underlining an enhanced dedication to strengthening economic, strategic, and political relations between the two countries.

Putin’s visit to Baku stresses Russia-Azerbaijan’s strategic convergence, demonstrating their mutual interests in bolstering economic cooperation and exerting regional influence. Key agreements include the reinforcement of the strategic partnership under the Declaration of Allied Interaction and an action plan for enhanced bilateral cooperation through 2026.

The report draws on previous analyses by SpecialEurasia, alongside local and international media articles and official statements.

Key Findings

• The recent state visit by President Putin to Azerbaijan resulted in the signing of several key agreements, including an action plan for enhanced bilateral cooperation from 2024 to 2026.
• Economic ties between Russia and Azerbaijan are expanding, with a notable increase in trade volumes and significant investment projects being undertaken by both nations.
• The ongoing tensions surrounding the Zangezur Corridor and issues to fully implement the trilateral agreements between Baku-Yerevan-Moscow highlight a contentious issue that affects the broader regional stability.

Putin’s Visit to Azerbaijan: Background Information

On August 19^th, 2024, Russian President Vladimir Putin paid an official visit to Baku and met Azerbaijan President Ilham Aliyev. Putin’s visit ended with the sign of a comprehensive package of agreements, marking a significant step in the Russia-Azerbaijan partnership.

The central document is a joint statement detailing the future trajectory of bilateral relations, emphasising mutual respect for sovereignty and territorial integrity. This statement, alongside several additional agreements, displays the strategic and economic goals for the coming years.

In addition, the parties signed agreements across various sectors during the visit, including healthcare, agriculture, food safety, and environmental management. The bilateral trade and investment landscape continues to strengthen, with the economic dialogue being furthered through an action plan extending through 2026.

On August 9^th, 2024, the Azerbaijan-Russia intergovernmental commission reviewed bilateral economic progress that highlighted a sustained growth in trade and collaboration, underscoring the solidification of economic ties between the two countries.

Geopolitical Scenario

The deepening alliance between Russia and Azerbaijan reshapes the regional power dynamics in the South Caucasus. Azerbaijan’s strategic location as a conduit for the International North-South Transport Corridor (INSTC) is of immense significance to Moscow’s broader Eurasian strategy.

The INSTC, which aims to connect Russia with India and Iran through Azerbaijan, enhances Moscow’s ability to exert economic influence and counterbalance Western-led initiatives. This infrastructure project not only strengthens Russia’s trade routes but also fortifies its geopolitical leverage in a region increasingly scrutinised by global powers.

Azerbaijan’s alignment with Russia comes at a time of heightened geopolitical friction in the South Caucasus. The recent confrontation between Azerbaijan and Armenia over Nagorno-Karabakh has further complicated regional stability. Baku’s military achievements and territorial acquisitions have altered the power dynamics in the region, establishing it as a prominent force in the South Caucasus, particularly with the backing of a strategic partner like Turkey.

However, the ongoing tensions over the Zangezur Corridor and Baku-Yerevan’s confrontation to implement agreed-upon measures reflect deeper regional disputes that continue to challenge efforts towards comprehensive peace and stability.

Azerbaijan’s growing ties with Russia may affect its relationship with Turkey, despite both nations’ shared interests in the energy sector and regional security. The collaboration between Moscow and Baku in areas such as the INSTC and energy transit could create friction within the regional geopolitical framework, particularly with Ankara’s competing aspirations in the region. This dynamic introduces a complex interplay of alliances and rivalries that could influence future regional developments.

In these shifting alliances, the North Caucasus, particularly Dagestan, assumes an increasingly strategic role in promoting Moscow-Baku’s economic, trade, and transport cooperation. The North Caucasus, which serves as a critical link between Europe and Asia, is central to Russia’s regional policy and its efforts to project influence across the South Caucasus. Dagestan’s integration into the Kremlin’s broader strategic objectives, especially thanks to implementing the Makhachkala Sea Trade Port in the Caspian Sea, could affect the overall balance of power in the region.

Furthermore, the increasing Russia-Azerbaijan’s cooperation in different fields could affect Baku-Brussels’s relations. Given Azerbaijan’s status as a crucial energy provider to Europe and a strategic partner of Russia, Baku might find itself in a delicate position where its foreign policy choices must carefully navigate intricate geopolitical forces.

Putin’s visit to Baku is also a message for Armenia, considering Yerevan’s recent increasing cooperation with the United States and NATO. Following Azerbaijan Foreign Affairs Minister’s expression of willingness to sign a peace agreement with the Armenian counterpart in Moscow, in the presence of a Russian representative, Moscow has once again demonstrated its decisive role in the dynamics of the South Caucasus, highlighting the potential need for Yerevan to depend on its historical ally rather than the West.

Why Does It Matter?

The enhanced partnership between Russia and Azerbaijan has substantial implications for regional stability and international relations. The deepening cooperation between the two countries could exacerbate existing tensions with Armenia or push Yerevan to rebalance its foreign policy in favour of Moscow instead of the new cooperation with Washington and Brussels.

In this regard, we can highlight two potential scenarios capable of increasing the regional geopolitical risk:

1. Increased Regional Tensions. The strengthened Russia-Azerbaijan relationship might heighten tensions with Armenia considering the current ‘frozen’ relations between Moscow and Yerevan and the Armenian’s decision to diversify its foreign partners and rely more on the West, mainly the United States. Backed by Russia and Turkey, Azerbaijan will find itself in a better and advantageous position regarding Armenia which, although has increased its cooperation with NATO and the United States, has not assurances of a Western military support in case of a military aggression.
2. Complicated Western Relations. Azerbaijan’s growing alignment with Russia could strain its relations with Western nations, especially those within the EU. Given the ongoing conflict between Moscow and Brussels over Ukraine, and Azerbaijan’s role in exporting natural gas to Europe, European countries may exert pressure on Azerbaijan because of its cooperation with Russia. Given Baku’s growing cooperation with China, it is imperative for Brussels to discover whether Azerbaijan is pivoting its foreign policy towards the multipolar world represented by Moscow and Beijing.

For further reports, analyses, and consulting regarding Azerbaijan, Russia and the Caucasus, contact us at info@specialeurasia.com.