Russia Benefits from the
South Caucasus
Tensions

The biggest winner in the ongoing tensions between Yerevan and Baku is Moscow.
Since liberating its formerly occupied territories in the Karabakh region in a 44-day war
in 2020, Baku has attempted to demarcate its borders, open communications, including
humanitarian corridors in strategic areas, and to finalize the terms of the peace
agreement with its neighbor. The trilateral peace agreement that secured Baku’s victory
has come under increased scrutiny over time, as the peace talks between Armenia and
Azerbaijan have dragged on. In public, Azerbaijani officials and analysts tend to blame
these difficulties on the pressures placed on PM Nikol Pashinyan by revanchists inside
and outside Armenia, especially foreign lobbyists, who don’t want him to come to terms
with the battlefield reality. However, the interventionism by foreign state actors,
especially Russia, is more noteworthy.

Over the last two years, while Russian peacekeepers were supposed to be
safeguarding the fragile peace, Baku has blamed the Russians’ for willful blindness.
Terrorist attacks and provocations by Armenian forces resulted in escalatory actions,
mostly border skirmishes. The Armenian military conspicuously remains in areas that
should have long been freed from their control. Would Armenia be openly challenging
superior military forces if there was no external backing? In September, Azerbaijan
returned fire directly into Armenian territory after another attack on its military.
That incident was the most violent and significant in scope and scale since the
conclusion of the Second Karabakh War; it nearly brought both countries to the brink of war, killing over 100 people.

While both sides blamed each other for the escalation, the coverage of the tensions pointed to continuing involvement of Russian interests behind the scenes, particularly in pro-Armenia propaganda campaigns that followed. The giveaway was the continuing use of the term “Nagorno-Karabakh.” Created by the Soviet Union to designate a strategic enclave/autonomous republic in which the
Karabakh Armenians resided, the name was officially retired since Azerbaijan retook
control. Baku had rebuked Russia for continuing to use the term in official addresses
even despite the formal change in protocol communicated by Azerbaijan’s Foreign
Ministry.

Russia’s involvement with Armenia has a long history; Russia is credited with helping
create the Armenian state and has kept a military presence there since the 19 th century.
But Moscow also bears responsibility for instigating a portion of the Armenian military to
try to carve out a sovereign territory within the Ottoman Empire on Turkish soil to further
Russian ambitions of access to the Mediterranean through and led to the massacre of
over a million Armenians.

During the Soviet period, Moscow instigated and fed ethnic tensions between
Armenians and Azerbaijanis; following the dissolution of the Soviet Union, the Kremlin
openly backed an Armenian attack on Azerbaijan and the resulting takeover of nearly
20% of its territory, which was then occupied for close to 30 years. Moreover, the newly
independent Armenia became an extension of Russia’s military influence in the South
Caucasus.

In exchange for fealty, the Kremlin supported ideological aspirations for a
reestablishment of “ Greater Armenia ”, which at the very least would include Karabakh.
Russia was also one of the top economic donors to the small country lacking in natural
resources.Its ideological influence in both post-Soviet countries was extensive; many of the former
Politburo class transitioned into the ruling elites in both Yerevan and Baku. However,
Azerbaijan was swayed by other political and cultural interests and influences, and
ultimately leaned towards the West. Armenia claimed to retain an alliance with the
United States, but served Moscow’s bidding. In later years, it gravitated towards the
Russia-Iran-Qatar gas cartel, formed in 2008, and which dominates over 60% of the
global gas market.

As Armenia sought new areas for cooperation with an increasingly anti-Western axis of
interest, Russia expanded its military presence in the country, including contingents of
FSB-linked border guards. The Russian 102 nd military base in Gyumri is under the
command of the Southern Military District of the Russian Armed Forces. Russia has
also been supplying Armenia with weapons, including new helicopters and fighter jets.
Simultaneously, Russia maintained trade relations and an interest in political and
economic relations with Azerbaijan. For that reason, in recent years Moscow preferred
to stay behind the scenes and not to get involved in border skirmishes except via the peacekeepers’ formal role. Armenia for its part has pushed for a larger Russian military
presence in its territories and turned to Russia for support during the 44-day war.
Reportedly, PM Pashinyan did not acquire President Putin’s blessing before launching
an offensive that resulted in a clear military defeat and the loss of occupied territories,
which were not recognized as an independent state even by Armenia itself.
Russia regarded an open conflict between Armenia and Azerbaijan as a risky venture in
terms of its own interests; significant military superiority by Baku would imperil
Moscow’s “investment” into Armenia. Moscow’s assistance during the war therefore was
negligible compared to Yerevan’s expectations; the Kremlin’s standing following the
liberation of the territories suffered a blow, especially as Turkey showed political support
for Baku and advanced its own economic interests as an ally.

Russia’s tense relations with Turkey played out through proxy warfare in a variety of
theaters; however, in the South Caucasus Ankara had a clear advantage. Moscow’s
challenges to Turkey therefore continued to be indirect. Moscow courted Turkey on
some issues, such as the sale of S-400, with the hope of weakening NATO, while
pushing back in Libya and Syria.

The war in Ukraine changed the calculus. Turkey came to play an important role as a
mediator of deals between Russia and Ukraine, but simultaneously proved to be one of
the few countries willing to accommodate Russia’s push for ruble acceptance in
exchange for oil. Ankara also joined Russia on several energy projects. But while
Turkey threw Russia, struggling in Ukraine, an economic lifeline, Russia continued
suffering losses elsewhere. It was forced to withdraw some troops and the S-300
system from Syria, and had to remove some of the peacekeepers in the South
Caucasus to cover for mounting losses in Ukraine. This leaves Turkey at an even
greater advantage.

Karabakh residents – and the rest of Azerbaijan – meanwhile came to question the role
of these peacekeepers, as they observed them abusing their authority and favoring
Armenia in staging military confrontations. Moscow continues to exploit the South
Caucasus situation. Indeed, recently even Armenia&’s PM Pashinyan admitted that
Russia’s extensive military influence inside Armenia threatens the country’s security.
For instance, a Russia-based Armenian oligarch, Ruben Vardanyan—who had, at one
point, held the title of State Minister of “Artsakh” (the self-proclaimed Armenian enclave
in Karabakh)—relocated fulltime to Karabakh and relinquished his Russian citizenship
right before the most recent tensions.

Shortly thereafter, a chain of mysterious events led to additional confrontations. Foreign nationals linked to Vardanyan’s financial empire, were caught engaging in illegal excavations of Azerbaijan’s natural resources, including gold and minerals, in Karabakh. The Russian peacekeepers who were
supposed to guard against any breaches of the peace failed once again. These illegal mining operations were also linked to two companies, reportedly responsible for smuggling the loot through the Lachin corridor, which was supposed to be a humanitarian passage for Armenians to travel between Karabakh and Armenia, and to transport humanitarian aid . What happens to the contraband once it leaves the
region? Investigative reporting is forthcoming, but given Vardanyan’s long-standing connections to the Kremlin, perhaps some of the proceeds go towards illicit financing of the Russian war in Ukraine. Vardanyan and several other officials of the self-declared “Artsakh”  were recently removed from their official positions – perhaps in a nod to US recent mediation efforts – but he may still project influence behind the scenes.

Starting  December 2022 , Russian peacekeepers intervened to block Azerbaijani civilian eco-activists from entering the mining region, observing, and protesting. The standoff has been
ongoing for nearly four months. Articles have proliferated in the English language media
accusing Baku of blocking the Lachin corridor, as well as cutting off gas in Karabakh, to
intimidate the local Armenian population. These reports fail to explain Azerbaijan’s
concern about the environmental and economic impact of the unauthorized mining, or
the interventions of Russian peacekeepers overstepping their authority. The media campaign translated into political statements, as well. Secretary Biden in various statements called on Azerbaijan to open the Lachin corridor despite information shared by Azerbaijani diplomats pointing to other actors behind the block. At the Munich Security Conference, he again brought up the issue of the opening of the communications and humanitarian load at the meeting with President Aliyev and PM Pashinyan. 

The Baku-based AIR Center’s Deputy Director, Dr. Esmira Jafarova, countered in a
recent interview that Azerbaijan has not blocked the road, nor does Baku have access
to the gas, which is supplied from Armenia. Only Armenians and the Russian
peacekeepers have the means to block the roads and to stop the energy from flowing.
Dr. Jafarova also pointed out that there is a direct correlation between Azerbaijan’s
accomplishments on the energy front and physical attacks and provocations. For
instance, two months prior to the outbreak of the Second Karabakh War, Armenians
had attacked Tovuz, the source of much of Azerbaijan’s oil and gas supplies. And the
current tensions sparked just as Azerbaijan is rising in Europe as a critical supplier of
gas, including through the recently inaugurated Trans Adriatic Pipeline—a part of the
Southern Gas Corridor, which supplies Greece and the Balkans. A growing number of
Azerbaijani energy projects are weakening Russia’s stranglehold on European energy.
Most recently, Baku has concluded two major energy agreements: one quadrilateral
agreement aims to transport green Azerbaijani energy to European states, and a wider
agreement with the EU that will have Azerbaijan double its gas output to Europe. These
developments are a direct challenge to the Russia-Qatar-Iran cartel.

The success of a peace agreement with Armenia would further undermine Russian
interests, integrating Yerevan more into South Caucasus and providing it with an
opportunity to share in the gas trade with Azerbaijan and Turkey, thus becoming less
reliant on its current patron. Russia is instigating provocations and spreading
propagandistic media campaigns to sabotage the possibility of peace.

Irina Tsukerman is a New York-based national security lawyer and a geopolitical
analyst. She is the President of Scarab Rising, Inc., a media and security strategic
advisory, the host of the Washington Outsider Report, and the Programs Vice
Chair of the American Bar Association’s Oil and Gas Committee.