Executive Summary

Iranian President Masoud Pezeshkian’s official visit to Azerbaijan is a significant step towards restoring bilateral relations between Tehran and Baku after years of tensions. The visit focused on strengthening historical ties and enhancing cooperation in trade, energy, transport, and cultural sectors.

Although Azerbaijan’s growing relationship with Israel and regional infrastructure disagreements create ongoing structural tension, both governments pragmatically priorities mutual interests. Several cooperation agreements signal a cautious but realignment of Iranian-Azerbaijani relations in a highly competitive geopolitical landscape.

Key Takeaways

• Iran and Azerbaijan signed new agreements enhancing cooperation in transport, trade, and cultural sectors.
• Ongoing tensions over Azerbaijani-Israeli ties and Tehran’s support for Armenia persist beneath efforts to normalise relations.
• Baku continues with a delicate multilateral foreign policy amid regional actors (Iran, Israel, Russia, and Turkey).

Background Information

On April 28, 2025, Iranian President Masoud Pezeshkian officially visited Baku and met the Azerbaijani President Ilham Aliyev. The purpose of the visit was to improve recently strained relations and increase collaboration in the fields of economics, trade, energy, and transportation. At the end of the official visit, the parties signed several agreements, including:

• A 2025–2027 Political Consultation Program between the Foreign Ministries of Azerbaijan and Iran.
• A Memorandum of Understanding on Comprehensive Cooperation in the Field of Transportation for 2025–2026.
• A Memorandum on Mutual Recognition of Certifications Related to the Training and Certification Standards of Seafarers.
• A 2025–2028 Cultural Exchange Program.
• A Memorandum on Media Cooperation.

Cultural affinities have historically shaped relations between Iran and Azerbaijan and competing regional interests. Strained relations between Azerbaijan and Iran have stemmed from a 2023 attack on Azerbaijan’s Tehran embassy, increased Azerbaijani-Israeli military cooperation, and disagreements over the Zangezur Corridor. Iran perceives these developments as threats to its regional standing. Conversely, Azerbaijan accuses Iranian proxies of destabilisation efforts.

President Pezeshkian’s ethnic background and focus on Iran-Azerbaijan shared history create opportunities for improved diplomatic relations.

Geopolitical Scenario

President Pezeshkian’s visit to Baku is a Tehran’s attempt to reposition itself amid intensifying competition with Israel and Turkey in the South Caucasus. His emphasis on territorial integrity and international law aligns Iran diplomatically with Azerbaijan’s sovereignty claims, particularly regarding Nagorno-Karabakh. Iran’s support for projects like the International North-South Transport Corridor (INSTC) and proposed rail links shows a clear move toward practical regional cooperation.

Azerbaijan’s strong security relationship with Israel, built on significant arms sales, continues to pose a strategic challenge to their bilateral relations. Tel Aviv’s planned engagement with Baku adds another layer of complexity to Tehran’s outreach efforts, given the competition between the two for influence in a strategically important region for energy and security. Although Tehran and Baku have recently cooperated on military and infrastructure projects, deep-seated mistrust, especially concerning intelligence and military operations, hinders a true strategic partnership.

Although Pezeshkian confirmed Azerbaijan’s territorial integrity, the Islamic Republic has a strategic partnership with neighbouring Armenia, confirmed by the bilateral trade and the opening of the Iranian Trade Centre in Yerevan. Furthermore, the opening in 2022 of an Iranian consulate in Kapan, in Armenia’s southern Syunik Province, underscored Tehran’s efforts to maintain its influence and presence along the Armenian-Iranian border.

Conclusion

In the short term, President Pezeshkian’s visit to Baku is Tehran’s a tactical recalibration aimed at stabilising Iran-Azerbaijan relations and mitigating the strategic encroachment of Israel in the South Caucasus.

Iran’s focus on bilateral agreements and shared interests, like energy and transport, seems a calculated move to sideline disputes over Azerbaijan’s links to Israel and the Zangezur Corridor. The trust deficit persists, particularly as Iran remains wary of Azerbaijani territory being utilised for intelligence or military operations against its interests.

With substantial losses among its Middle Eastern proxies and a shift in strategy towards neighbouring countries like Afghanistan, Pezeshkian’s visit to Baku could confirm a new direction in Iranian foreign policy.

In the medium term, regional projects and security shifts will shape Iran-Azerbaijan relations. Tehran’s concern over the Zangezur Corridor, seen as bypassing Iran and supporting Turkish regional ambitions, will influence its actions.

Faced with a strengthening Azerbaijani-Turkish-Israeli partnership, Iran might expand its engagement with the INSTC (backed by the Russian Federation), emphasising its critical role in regional logistics while quietly bolstering its relationship with Armenia.

While Pezeshkian’s ethnic heritage and conciliatory rhetoric may temporarily soften hostilities, Middle Eastern geopolitical dynamics involving the Islamic Republic and Israel might influence Tehran-Baku’s relations. Iran might continue cautiously engaging, using economic cooperation to build goodwill while simultaneously maintaining a deterrent posture.

Instability could easily return, particularly if regional players take unilateral actions regarding infrastructure or security that undermine Iran’s regional influence or endanger its western borders via Armenia.

*Cover image: President Pezeshkian meets Iranian, Azerbaijani traders in Baku at the presence of Azerbaijani President Aliyev (Source: Official Website of the President of the Islamic Republic of Iran)

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