The day Russia lost the South Caucasus: The Washington Declaration is changing the balance of power in the region

From left to right: Azerbaijani President Ilham Aliyev, US President Donald Trump and Armenian Prime Minister Nikol Pashinyan after signing the Washington Declaration. Source: The Washington Post

However, the South Caucasus has recently been given a real chance to achieve lasting peace. On 8 August, in Washington, Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan, with the mediation of US President Donald Trump, signed a declaration outlining the contours of future peace in the region.

Russia, which has been destabilising the situation in the South Caucasus for decades and exploiting the confrontation between Armenia and Azerbaijan, has suffered a geopolitical defeat.

Details of the Washington Declaration, the benefits for the signatories, the reaction of international players and Russia's geopolitical losses are discussed below.

Historical background

The main apple of discord between Armenia and Azerbaijan is Nagorno-Karabakh (Artsakh in Armenian).

The conflict in the region can be traced back to the early 20th century, when the Nagorno-Karabakh Autonomous Region was formed as part of the Azerbaijan SSR. This decision was probably part of Russia's ‘divide and rule’ policy, as the majority of the population was ethnic Armenian. This made clashes between the two nationalities inevitable.

After the collapse of the Soviet Union, the unrecognised Nagorno-Karabakh Republic (NKR) was formed with the support of Armenia. Azerbaijan did not recognise this, but as a result of the First Karabakh War of 1992-1994, it lost control of the region.

For two decades, Azerbaijan actively strengthened its army in preparation for revenge. The situation changed dramatically after the Second Karabakh War of September-November 2020. Azerbaijan regained control over significant territories, while the unrecognised NKR had only a narrow strip of land connecting it to Armenia in the form of the Lachin corridor, which was controlled by Russian peacekeepers. In 2023, the Azerbaijani armed forces carried out their last major operation, resulting in the complete elimination of the ‘republic’.

Baku's military superiority over Yerevan was obvious to everyone, so Azerbaijan began to actively promote its interests. Armenia, under its current leadership, is demonstrating flexibility and actively making concessions.

Currently, the Washington Declaration has become the culmination of the peace process. This document should serve as a starting point for the final legal consolidation of the end of the long-lasting conflict.

Map showing the distribution of control in Nagorno-Karabakh. 1 – territory captured by Azerbaijan in 2020; 2 – territory transferred to Azerbaijan under the ceasefire agreements; 3 – territory of the post-war NKR, which was liquidated in 2023; 4 – Lachin corridor under the control of the Russian military. Source: Wikipedia

The Washington Declaration – content and consequences

The signing of the Washington Declaration was truly a historic moment for Armenia, Azerbaijan, and the entire South Caucasus. Its main provisions are as follows: the parties renounce territorial claims and the use of force against each other, no third-country troops will be stationed on the border, and Baku and Yerevan will establish diplomatic relations.

The United States, and Donald Trump personally, will also benefit significantly. Known for his desire to conclude great and beautiful deals, the American president has, in fact, hit the jackpot. Through his mediation, the peace process between Azerbaijan and Armenia has been significantly accelerated.

The most significant achievement for Washington was the creation of the Trump Route for International Peace and Prosperity (TRIPP) based on the Zangezur corridor. It is now known that the Armenian section of the route will be leased to the US for 99 years, which will gain significant influence in the region by controlling the strategically important corridor. There is no information on whether Washington will own the transit profits or other revenues from the route, but it is quite likely, given Trump's business approach to international politics. American companies may also receive priority rights to develop gas and oil pipelines and other infrastructure. The US government will not be directly involved in the construction.

An American military base or private military company may appear in the region to guard the corridor and/or protect Armenia. In this scenario, Yerevan will receive real security guarantees against territorial claims, and all conditions will be in place for the withdrawal of Russian troops.

The benefits for Azerbaijan and Armenia are obvious. Baku will gain direct access to its exclave of Nakhchivan. It will also create new conditions for the transit of goods from Asia through Azerbaijan to Europe, which will increase cash flows to the budget.

Armenia, meanwhile, will emerge from a certain isolation and gain significant access to European and Asian markets. It will also receive foreign currency revenues from the transit of goods, which will help develop its economy. Most importantly, Yerevan has the opportunity to end a long-lasting conflict in which it has lost and has no chance of improving its position.

Zangezur Corridor. Source: Caspian Policy Centre

Nevertheless, there is uncertainty regarding the Armenian Constitution. It contains a reference to Nagorno-Karabakh, which Azerbaijan perceives as an unacceptable territorial claim. Armenian Prime Minister Nikol Pashinyan has expresses his willingness to amend the Constitution at Baku's request, but there are a number of nuances. This requires a referendum, which is to take place in 2026-2027, but the results of which are difficult to predict. Some in the opposition are against such a decision and will exploit it for political gain. For this reason, Pashinyan's government must find the best possible solution, which is not a piece of cake.

Reaction and position of international players

Turkey is firmly on Baku's side, but also proclaims its desire for dialogue with Armenia. The two countries have a very complicated history of relations, but the opening of mutual borders and the start of normal dialogue are currently expected. Nikol Pashinyan recently visited President Erdogan and, after signing the Washington Declaration, had a telephone conversation with him. Both events were very positive.

Iran, on the other hand, has always expressed concerns about the Zangezur corridor. Ali Akbar Velayati, senior advisor to Supreme Leader Ali Khamenei, has stated that the proposed corridor is a geopolitical plan led by the US and the Israeli regime aimed at undermining Iran's national security and strategic ties. Tehran suspects that Azerbaijan and Turkey will gain too much influence, while Armenia will be cut off from it. This fear is aggravated by the fact that 16-25% of Iran's population is Azerbaijani, which could be used to destabilize the country.

After the declaration was adopted, the Iranian establishment was completely divided. Ali Akbar Velayati said: “Iran, with or without Russia, will prevent the American corridor... it will become a graveyard for Trump's mercenaries.” However, after that, Foreign Minister Abbas Arakchi and President Masoud Pezeshkian noted that the corridor is not so scary and that Iran's key interests have been taken into account.

It appears that Khamenei's advisor's words were Tehran's premature genuine reaction to “Trump's corridor.” In this context, several factors threatening Tehran converge: its rivals Azerbaijan and Turkey are growing stronger, and the US is creating a new threat, especially given the possibility of introducing security forces into the region.

Despite this, the Ayatollah regime has no real influence on the course of events. After the Twelve-Day War with Israel, the country is quite weakened and is unlikely to want a repetition of those events. But this creates all the conditions for even greater rapprochement of Iran with Russia and China – states that are also dissatisfied with Trump's initiative.

China remains completely neutral, but a potentially attractive region for expanding its previously lost influence. In the global confrontation between the US and China, the US has won this battle, which cannot fail to irritate China. At the same time, this is unlikely to translate into an active response or lead to serious immediate consequences.

The decline of Russian influence

Russian Foreign Ministry spokeswoman Maria Zakharova said that Moscow welcomes the signing of the Washington Declaration. However, public statements do not reflect the real state of affairs. Russia's relations with Armenia and Azerbaijan have been deteriorating for a long time, and Moscow's influence in the region is plummeting. In Azerbaijan, this is due to a series of events: from the crash of an Azerbaijani Airlines passenger plane, which Russia is responsible for, to the mass arrests of ethnic Azerbaijanis in Russia. Baku's response was to restrict Russia's presence in the country. Azerbaijan has closed the "Russian House", cancelled joint cultural events with Russia, and restricted the activities of the Russian propaganda media outlet "Sputnik".

At the same time, Moscow's relations with Yerevan are deteriorating due to a mismatch of interests. Russia lacks the strength and desire to defend Armenia within the framework of its CSTO commitments, so Yerevan sees no need to remain in Russia's orbit because of this. Armenia has already frozen its participation in the CSTO and is actively seeking international contacts. In March 2025, the Armenian parliament passed a law to begin the process of the country's accession to the EU. This is more of a symbolic step, but the general direction of movement is becoming increasingly clear.

Previously, Moscow was an integral part of the peace agreements in the South Caucasus. Hence, with Russia's mediation, a ceasefire was reached after the First Karabakh War in 1994, and the Bishkek Protocol was signed. Following the second Karabakh War, nearly 2,000 Russian peacekeepers were deployed in the Lachin corridor connecting Armenia and the NKR. The key document signed in Washington without its participation is a symbol of the decline of its influence in the region. Moreover, at present, the Russian Federation cannot influence the course of the negotiations in any way.

Ilham Aliyev and Nikol Pashinyan's press conference, mediated by the Russian president after the Second Karabakh War, was disappointing for Armenia

Russian forces in the South Caucasus and potential for destabilization in the region

Despite its declining influence, Moscow still has ways to destabilize the situation in the South Caucasus. In general, this has been Russia's policy since the collapse of the USSR, as Moscow benefits from as many conflicts in the world as possible.

In the South Caucasus, this has manifested itself in simultaneous support for Armenia and the sale of large quantities of weapons to Azerbaijan. Baku has purchased, at least, $5 billion worth of Russian weapons over the past 30 years, and Moscow has been one of the most important suppliers. During active hostilities, Yerevan repeatedly requested assistance from the CSTO, but it was not provided. Given that about 200 km² of Armenian territory remains occupied by Azerbaijan, this is a clear reason to fulfil its alliance obligations.

Russia is currently conducting a campaign to discredit the peace process, targeting Armenian society. For example, the propaganda agency “Sputnik” calls the Washington Declaration a “surrender of national interests,” a “betrayal of fallen Armenians,” “the end of sovereignty,” and so on. This is being done to escalate the internal situation ahead of the parliamentary elections to be held in June 2026.

Russia is attempting to destabilize the situation in Armenia by influencing the results of next year's parliamentary elections. Fuelled by Russian propaganda, pro-Russian and/or military forces that advocate continued confrontation with Azerbaijan may come to power. This will only be possible if close relations with Moscow are maintained and large arms supplies continue. Needless to say, in such a scenario, Yerevan will have no chance of military success and will further worsen its geopolitical position in favour of the Russian Federation, which will be able to take advantage of the situation to increase its influence.

The current Armenian government is doing everything possible to prevent such a scenario. Prime Minister Pashinyan is campaigning against pro-Russian oligarchs and the clergy of the Armenian Apostolic Church. Russian propaganda is actively working to discredit the government's actions.

Russia's military presence in Armenia remains an important factor. Currently, it is represented by Russian border guards, a military base in Gyumri, and Yerevan Airport, where the 102nd Russian military base and its aviation component are located, with a total strength of up to 5,000 personnel. In 2025, the process of gradually reducing the number of Russian border guards began: they stopped serving at Yerevan airport and at several border points with Iran and Turkey. However, they are still present in other areas of these borders.

Armenian Prime Minister Nikol Pashinyan visits a military base in Gyumri accompanied by Russian military personnel. Source: Primeminister.am

Considering the rumours about the deployment of American troops, the presence of a Russian base becomes completely meaningless. Is Yerevan seeking to withdraw the Russian Armed Forces? Armenia would like this, as it understands the potential danger they pose. However, is it possible to get rid of them? The withdrawal process would take place in the following order: border guards – aviation – military from the Gyumri base.

The situation with the border guards is the simplest, given the existing precedents. Their withdrawal is a matter of time, as Yerevan has set a course for independence in this matter.

The situation with the servicemen of the 102nd Russian military base is much more complicated. The agreement on the base is valid until 2044. Waiting 20 years to get rid of the Russian base is a controversial decision. The base can also be liquidated if a joint intergovernmental commission reaches a consensus. It can be convened at the initiative of one of the parties, but the withdrawal of the base requires the votes of both countries. It is unlikely that Moscow will agree. Will the potential presence of American troops prompt this? That is an open question.

A unilateral decision to liquidate the base is the most difficult. It is possible, but it threatens long legal proceedings. It could be legally justified by citing a “significant violation of the terms of the agreement” by the Russian side. This could include violations of environmental regulations by Russian soldiers, the import of more weapons to the base than agreed with the Armenian side, or the use of force outside the facilities under the jurisdiction of the Russian Federation.

Yet, it is likely that the withdrawal of Russian troops in the near future is only possible if Russia and the United States improve relations and agree on spheres of influence in the world. Thus, American forces could theoretically replace Russian forces in Armenia.

Recently, there have also been frequent reports of a possible military escalation between Russia and Azerbaijan. After the attack on Azerbaijani energy infrastructure in Ukraine, Baku has intensified its ‘attacks’ on Russia. State Duma deputy Andrei Gululev, propagandist Vladimir Solovyov, and military correspondent Yuri Podolyaka are unanimous in declaring the ‘possibility of expanding the SVO.’ However, war is unlikely now. Moscow does not have the resources available for operations in the Caucasus. This is especially true given Azerbaijan's significant capabilities and its alliance with Turkey.

Opportunities for Ukraine

All of this demonstrates a window of opportunity for Ukraine. We already have fairly positive relations with Azerbaijan. The situation with Armenia is more complicated, but it participates in the annual Ukraine Recovery Conferences and voted in the UN for a resolution recognising Russia's actions as aggression. This indicates a good starting position with Azerbaijan and at least some progress with Armenia, which is already good for the current situation.

Potential areas for cooperation:

1. Logistics, transportation. Azerbaijan is a large logistics hub between the Black and Caspian Seas, which is an integral part of the Trans-Caspian corridor. It is used to transport goods from China, Central Asia and Europe. Ukraine is already participating in the project, and in order to be included in larger supply chains, we must have a partnership with Baku. Yerevan, meanwhile, seeks to diversify its logistics routes and not depend on Turkey. It has access to the Black Sea through Georgia, from where goods can also go to Ukraine. We can play the role of a ‘window to Europe.’

2. Defence technologies. Ukraine is currently one of the few countries in the world with extensive combat experience. We are also the only country that has established effective production and use of various types of UAVs on the front lines from scratch. These aspects are extremely interesting for Armenia and Azerbaijan, as they are under threat from Russia but are unable to confront it directly due to their incomparably smaller territories and economies. The use of relatively cheap and effective weapons and tactics can compensate for these shortcomings.

3. Traditional methods of cooperation: cultural and educational exchanges and trade (especially food). Trade turnover with Armenia in January 2022 amounted to almost $150 million, with exports from Ukraine increasing by 19.4% compared to 2021, and from Armenia by 35.2%. The main items traded were grain crops and metal products. The figures for Azerbaijan are particularly impressive: in 2021, trade turnover amounted to $1.08 billion. Food products were also the main commodity. These results can be repeated and strengthened.

What's next?

The Washington Declaration is a victory for all its signatories. The US will gain influence in a new region, and the South Caucasus will have a chance for lasting peace. The ball is now in Armenia and Azerbaijan's court – it is up to them to complete the peace process.

At the same time, this state of affairs is a clear loss for Russia. Despite having tools to exert influence, Moscow has lost its key role in the region. It has become clear to everyone that the situation can be resolved without Russia, without receiving a strike in return. Despite this, Russia will try to destabilise the South Caucasus. Local governments will have to resist this. It is also worth monitoring the actions of Iran and China, which are dissatisfied with the new state of affairs.

Stabilisation in the South Caucasus is also in Ukraine's interests. With initiative and desire, our relations and partnership with the region can and will improve. There is every reason to believe that this will happen relatively soon. The Armenian-Azerbaijani case shows that a conflict that originated in Soviet times and has lasted for decades can be resolved. If the South Caucasus follows the path of successful development and normalisation, it will set an example for all countries of the former USSR.

Analytical material prepared by Oleksandr Buryachenko, observer of the Trans-Caspian region, exclusively for Resurgam