Escalating tensions involving Iran are already reshaping civilian and commercial aviation routes across the South Caucasus. As airlines increasingly avoid Iranian airspace, they are relying more heavily on alternative flight paths across the region. Flight-tracking data indicates a growing concentration of east–west traffic passing through Azerbaijani and Georgian airspace. These developments highlight that the Middle Corridor and broader Trans-Caspian connectivity are not only strategically important for container transportation and trade routes, but are also increasingly emerging as alternative corridors when traditional routes become politically or militarily unstable.
This is not the first time regional instability has redirected aviation flows. Similar patterns were observed during the direct Iran–Israel confrontations in April and October 2024, as well as during the 12-day conflict in June 2025. During these crises, Iran temporarily closed its airspace to civilian traffic, forcing international airlines to reroute flights through Turkish, Caucasus, and Central Asian airspace. As a result, the South Caucasus experienced a noticeable increase in transit aviation traffic.
These disruptions also have broader implications for regional connectivity initiatives, particularly the North–South Transport Corridor and the Middle Corridor. Instability in Iran creates significant risks for trade routes and economic integration across the South Caucasus. The most critical vulnerability concerns the International North–South Transport Corridor, which has recently gained renewed momentum through deepening cooperation between Russia and Iran.
For example, during the visit of Russia’s Energy Minister to Iran on February 18, several agreements were signed, including plans to begin construction of the Rasht–Astara railway on April 1. This railway represents a critical missing link in the North–South Corridor. However, the current instability in Iran will almost certainly delay this project. Russia has previously committed to guaranteeing Azerbaijan a cargo supply of five million tons annually starting January 1, 2028, but this commitment depends heavily on the completion of the Rasht–Astara railway. If instability persists, construction timelines are likely to be postponed.
The crisis has also had immediate repercussions for global energy markets. Oil prices briefly surged amid fears of disruptions in the Strait of Hormuz, a critical maritime chokepoint through which roughly one fifth of global oil trade passes. The strait is also essential for Qatari liquefied natural gas (LNG) exports, making it a key artery of global energy supply.
For countries in the South Caucasus, these developments carry significant implications for energy security. Azerbaijan, in particular, could once again emerge as a pivotal supplier during periods of regional instability. Since the expansion of the Southern Gas Corridor, Azerbaijan has strengthened its position as a key energy partner for European markets.
Concerns over potential disruptions in the Strait of Hormuz, combined with Iranian attacks on cargo vessels carrying energy supplies, have already generated volatility in global markets. European gas prices have reacted to these risks, reinforcing Azerbaijan’s strategic importance in both oil and natural gas exports.
At the regional level, Azerbaijan’s importance for neighboring countries such as Georgia and Armenia may also increase. As part of the ongoing normalization process with Armenia, Azerbaijan has already begun replacing certain Russian energy supplies. Instability in the Persian Gulf could accelerate this trend and further reshape regional energy partnerships.
Despite these risks, regional states are not without options to mitigate potential disruptions. If the conflict continues for an extended period, countries in the region can pursue several strategies to reduce their vulnerability.
In the short term, global markets reacted sharply during the initial phase of the crisis, although prices later stabilized at around $78 per barrel. However, if tensions escalate further, particularly between Iran and the United States, renewed disruptions and heightened uncertainty are likely.
In the long term, diversification remains the most viable strategy. Countries across the region will seek alternative partners, routes, and supply chains to reduce their exposure to geopolitical shocks. In this context, the current situation may present an opportunity for countries such as Azerbaijan to further demonstrate their importance in global energy markets and adjust their strategic positioning accordingly.
Migration dynamics also represent a potential challenge. Organized preparations have reportedly already been observed along the Azerbaijan–Iran border, including humanitarian infrastructure and security arrangements designed to manage possible refugee flows. While migration has not yet reached critical levels, flows could increase dramatically under certain scenarios.
One of the most serious possibilities involves the collapse of Iran’s central government following sustained attacks on key political and military institutions. Such a development could trigger internal instability or even civil conflict, potentially generating significant migration flows toward neighboring countries.
In such a scenario, Turkey, Armenia, and Azerbaijan would likely become primary destinations for refugees. These states have long considered such risks and have developed contingency planning mechanisms for potential migration surges.
For Azerbaijan, the issue is particularly sensitive. A significant portion of potential migrants could consist of ethnic Azerbaijanis from northern Iran. Under such circumstances, Azerbaijan would face both humanitarian and political pressures to respond proactively in order to protect their interests and ensure their safety.
Iranian diplomacy has historically been characterized by flexibility and adaptability. While Iran’s state capacity is likely to remain resilient, the current crisis may expose tensions within the governing system, particularly between political factions and decision-making centers. In this context, it is not necessarily the state itself, but the internal balance of power within the Islamic Republic that may shift. As a result, while a complete transformation of the political system remains unlikely, the trajectory of governance and foreign policy direction is becoming increasingly difficult to predict.
What is increasingly clear, however, is that the South Caucasus may soon face a new geopolitical environment in which two major regional powers — Russia and Iran — are simultaneously constrained by multiple, overlapping pressures. While neither country is unfamiliar with sanctions or conflict, the simultaneity and intensity of these pressures may limit their regional flexibility in unprecedented ways.
This situation may not initiate a shift in foreign policy orientations, but it could accelerate ongoing efforts by smaller regional states to diversify their partnerships and reduce strategic dependencies.
For Armenia, this development could prove particularly significant, as Iran has traditionally served as an important regional partner, especially as Yerevan seeks to reduce its dependence on Russia. A weakened Iran would therefore complicate Armenia’s strategic calculations.
For Azerbaijan, the challenge will lie in maintaining a careful balance in a shifting geopolitical landscape. A weakened Iran may coincide with a stronger regional presence of the United States and Israel, potentially acting in coordination with Turkey — two important partners of Azerbaijan.
Nevertheless, Azerbaijan’s growing military capabilities, expanding energy exports to Europe, and increasing geopolitical relevance may provide the country with sufficient strategic autonomy to navigate this evolving regional environment.
Given these dynamics, policymakers in the South Caucasus should prioritize three strategic areas: strengthening regional aviation coordination, accelerating the development of alternative energy transit routes, and preparing contingency frameworks for potential migration flows.