Armenia and Azerbaijan Expand Trade, Weakening Russia's Regional Grip

Longtime rivals Armenia and Azerbaijan are increasing trade in ways that analysts say could support peace-building, ease Armenia's longstanding blockade, and gradually weaken Russia's role in the region as Moscow remains preoccupied with its war in Ukraine.

New Trade Routes

Azerbaijan has begun exporting energy products to Yerevan and is serving as a transit route for wheat from Kazakhstan and Russia. In December, a train carrying 24 wagons of Azerbaijani-produced gasoline crossed from Georgia into Armenia — a post-Soviet first as trade relations between Yerevan and Baku slowly resurface after more than three decades of conflict.

Diplomatic Progress

In February, Baku and Yerevan agreed to further explore opportunities to expand bilateral trade and economic cooperation during talks between Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan in Abu Dhabi.

Russia's Declining Role

With Moscow focused on Ukraine, Armenia and Azerbaijan are bypassing the Kremlin and establishing direct trade links. This trend is undermining Russia's traditional influence in the South Caucasus and reshaping regional dynamics.

2026 Priorities

Both sides aim to conclude the peace accord, legally establish borders, and expand economic cooperation. Energy, transportation, and trade are identified as the key sectors for anchoring the bilateral relationship.