SOUTH CAUCASUS IN FOCUS OF GLOBAL RIVALRY: CHALLENGES AND OPPORTUNITIES FOR UKRAINE
Kostiantyn Kononenko,
Advisor to the Director of the National Institute for Strategic Studies
General Overview
The end in 2023 of the protracted Armenian–Azerbaijani conflict, together with the geopolitical effects of the conflicts still under way around Ukraine and in the Middle East, has produced fundamental change in the regional balance of power in the South Caucasus.
Its defining features are, first and foremost, the diminishing regional role of Russia, which is rapidly losing its levers of military and political influence in the region as a result of the war in Ukraine and its international isolation. One consequence of this trend is the erosion of Russia’s traditional mechanisms of control over Armenia, as well as the weakening of its instruments of pressure on Azerbaijan and Georgia, which has allowed these countries to diversify their foreign-policy priorities.
Against this backdrop, other influential actors – the United States, the European Union, Türkiye and China – are strengthening their positions, accompanied by intensifying competition among them for resources and for control over logistics routes. At the same time, military instability around Iran, which for a long time sought to actively shape international relations in the South Caucasus, has further weakened that country’s position and its role in the regional balance of power.
Impact of Global Rivalry on Policies of South Caucasus Countries
The global rivalry among the United States, the European Union, Russia, Türkiye and Iran has turned the South Caucasus into an arena of complex geopolitical play. The weakening of Russia’s traditional dominance as a result of its aggression against Ukraine, and the shift in the balance of power in favor of new players, is fundamentally transforming the policies of the South Caucasus countries (Azerbaijan, Armenia and Georgia), forcing them to rethink their security alliances and foreign-policy orientations, to construct multi-vector policies and to diversify their partnerships.
This trend is most clearly visible in Armenia, which in recent years has been engaged in a radical rethinking of its traditional role as Russia’s principal ally in the region and in a search for new ways to position itself in a rapidly changing regional balance of power. The strategic pivot to the West initiated by the government of Nikol Pashinyan – prompted by Moscow’s failure to honor its allied commitments during the Armenian–Azerbaijani war of 2020 and by the demonstrative passivity of Russian peacekeepers during Azerbaijan’s military retaking of the territory of Nagorno-Karabakh in 2023 – is intended to reduce the country’s critical dependence on Russia, to secure stability through Western institutions and to build an alternative security architecture in cooperation with the European Union and the United States.
Within this approach, Armenia has de facto completely frozen its participation in the Collective Security Treaty Organization and is actively diversifying its foreign policy, officially distancing itself from Russian foreign-policy concepts (including the aggression against Ukraine), while emphasizing European integration, raising the level of its engagement with the European Union and stepping up a multidimensional dialogue with the United States (on the basis of the Charter on Strategic Partnership of 14 January 2025 and the follow-on Charter on Comprehensive Strategic Partnership of 26 May 2026).
The past year has seen substantial movement in Armenia’s relations with the United States, driven in large part by the focus of Donald Trump’s right-wing populist administration on supporting peace efforts on the Armenian–Azerbaijani track and by its ambition to take part in regional projects in logistics, energy and security (above all the TRIPP project) that will compete with the corresponding Russian and Chinese initiatives. It is in this light that one should view the Armenian–American agreement on civil nuclear cooperation (Section 123) of 9 February 2026, which provides for the export of American nuclear technology, equipment and services worth $9 billion to modernize the Metsamor Nuclear Power Plant and is critically important for strengthening Armenia’s energy independence. Given the official support extended to the government of Nikol Pashinyan by the administration of United States President Donald Trump ahead of the parliamentary elections in Armenia (7 June this year), one can speak of a strengthening of the American vector in the country’s foreign policy in the years ahead.
The central focus of Armenian foreign policy remains the signing of a peace treaty with Azerbaijan mediated by the European Union and the United States, the delimitation of borders and mutual recognition of territorial integrity (including the Azerbaijani status of Nagorno-Karabakh), as well as the completion of the difficult process of normalizing relations with Türkiye. This would make it possible to open the borders and lift Armenia out of the logistical isolation in which it has found itself since gaining independence in 1991, turning it into a fully fledged participant in, and beneficiary of, the new architecture of Eurasian logistics corridors. At the same time, Armenia is seeking to preserve a stable and deep level of bilateral cooperation with Iran, which remains for Yerevan an important trading partner, an alternative supplier of energy resources and a weighty factor in ensuring regional stability and maintaining balance in relations with other players, above all Russia, Türkiye and Azerbaijan.
Georgia is also in a process of transformation: in recent years its policy has been marked by a “Euroskeptic” turn away from its traditional pro-Western orientation towards rapprochement with Russia, China and other authoritarian regimes, despite the formally declared goal of joining the European Union and the North Atlantic Treaty Organization and the official European Union candidate status obtained in 2023.
The attempts of the ruling Georgian Dream party to build elements of authoritarianism into Georgia’s political system through the implementation of a series of controversial laws that copy Russian repressive norms and substantially restrict civil liberties (such as the law on transparency of foreign influence, a package of laws against “lesbian, gay, bisexual and transgender propaganda”, the criminalization of criticism of the authorities and the “ban on extremism”, and the introduction of legal mechanisms for dissolving and banning opposition parties) have provoked a split in Georgian society and led to a deep crisis in the country’s relations with the European Union and European institutions, above all the Parliamentary Assembly of the Council of Europe. Its consequences have included the suspension of European Union and United States financial assistance to Georgia, the freezing of their political dialogue with the Georgian government, the imposition of personal sanctions and visa restrictions on senior Georgian officials, and the weakening of the country’s engagement within the North Atlantic Treaty Organization.
In the context of policy towards Russia, one can speak of a gradual normalization of Georgian–Russian relations. Against the backdrop of the effective halt of Georgia’s European integration, the Georgian Dream government has set a course for “pragmatic engagement” with Russia, avoiding any trigger issues capable of provoking direct confrontation in bilateral relations. Under this strategy, Georgia has not joined international sanctions against Russia; economic, energy and logistics ties between the two countries are actively expanding; and direct air links (earlier cancelled by Moscow) have been restored, which has increased the flow of Russian tourists and business into Georgia. Despite the absence of official diplomatic relations, severed after the 2008 war over Moscow’s recognition of the “independence” of the occupied Georgian regions of Abkhazia and South Ossetia, Russia still remains one of Georgia’s main trading partners (accounting for around 10.4% of its total foreign-trade turnover). In recent years, the Chinese factor has exerted an ever greater influence on Georgia’s foreign policy. The Georgian Dream government regards China as a geopolitical counterweight to the West and, to a certain extent, to Russia, as a key investor and as its main partner in developing logistics routes. Given the strained relations between the current Georgian authorities and the West, China is a convenient partner for official Tbilisi, since Beijing traditionally attaches no political conditions (such as compliance with standards of democracy, human rights and the like) to its assistance and loans. Another important factor is Chinese diplomacy’s non-recognition of the “independence” of the Russian-occupied Georgian territories.
Azerbaijan has adapted most successfully to the changes in the regional balance of power in the South Caucasus, having managed to build its own effective model of balancing in relations with global centers of power and – thanks to a multi-vector foreign policy, diversified partnerships and financial independence – to achieve regional strategic autonomy and acquire agency in regional international relations.
By avoiding accession to military-political and integration blocs, relying on its strategic alliance with Türkiye and skillfully using energy diplomacy as a weighty instrument of “soft power”, Baku has managed to build a system of durable regional economic dominance, which has created opportunities for developing pragmatic relations with all strategically important partners – Russia, the European Union, the United States, China and Iran. A key factor in this context is, to a large extent, Azerbaijan’s leading role in international cooperation on the implementation of transcontinental transport and energy corridor projects, which allows it to maintain with the aforementioned actors a pragmatic and at the same time self-assured dialogue based on the principles of mutual respect, aimed at minimizing security risks in the region and underpinned by joint integration into a series of large-scale economic projects (such as the North–South transport corridor linking Russia and Iran, the Southern Gas Corridor, the American TRIPP project, China’s Belt and Road Initiative, the development of the Trans-Caspian International Transport Route/“Middle Corridor” and others).
Another weighty factor is the country’s growing geopolitical importance for the energy security of the European Union as an alternative and reliable supplier of energy resources, in view of the European diversification policy driven by the rejection of Russian energy carriers as a result of Russia’s aggressive actions against Ukraine and European Union countries, as well as amid geopolitical instability in the Middle East.
In recent years, Azerbaijan’s role as a strategic energy partner of the European Union has been transformed from that of a regional supplier of energy resources into one of the guarantors of European energy security. It currently provides around 4.3% of the European Union’s oil imports, as well as 8.1% of its total imports of pipeline gas, which is transported through the Southern Gas Corridor (including the Trans-Adriatic Pipeline) to the countries of Southern and Central Europe (Italy, Greece, Bulgaria, Romania, Hungary, Austria and Germany). In the European Union’s overall energy balance, in which natural gas accounts for approximately 24% of all energy consumed, Azerbaijani gas makes up about 2% of total consumption (12–13 billion cubic meters a year). It should also be noted that Azerbaijan’s energy strategy towards the European Union is closely tied to the development of the Trans-Caspian International Transport Route (“Middle Corridor”) and the TRIPP project, which makes Azerbaijan the main transit hub between Central Asia and the European Union. At the same time, given the persistently high level of conflict potential in the South Caucasus region, security cooperation, aimed in particular at protecting critical infrastructure, remains an important strand of bilateral engagement between the government of Azerbaijan and the European Union.
Russia’s Policy in South Caucasus: Attempts to Preserve Remnants of Influence
The concentration of Russia’s military and financial resources on the war against Ukraine has substantially constrained its capacity for dominance in the regional projection, gradually leading to the loss of its positions, the decay of the Russian security architecture (the Collective Security Treaty Organization and “peacekeeping” formats) and a systemic transformation of Russian influence in the region to the benefit of other geopolitical players (the United States, the European Union, China and Türkiye).
Azerbaijan is the most difficult, independent and financially self-sufficient factor in Russia’s plans for the South Caucasus – one that Moscow is forced to treat as an equal player rather than an object of manipulation. The elimination of Karabakh separatism and the withdrawal in June 2024 of the Russian “peacekeeping contingent”, which had been deployed in the territory of Nagorno-Karabakh as a “security guarantor” under the trilateral agreement of 10 November 2020, deprived Moscow of its main military instrument of blackmail and lever of influence over the policy of the Azerbaijani government. Under current conditions, Moscow is forced to reckon with the full restoration of Azerbaijan’s sovereignty over Nagorno-Karabakh and is trying to preserve its partnership with Baku as a key transport and logistics node for circumventing Western sanctions.
At the same time, Armenia occupies a key place in Moscow’s plans to preserve its geopolitical influence in the South Caucasus, having historically been Russia’s principal military-political ally in the region and a member of Russian integration formats (the Collective Security Treaty Organization and the Eurasian Economic Union).
Yerevan’s current rapprochement with the European Union, initiated by the government of Nikol Pashinyan, has provoked a sharp reaction from the Kremlin. In an effort to keep Armenia within its sphere of geopolitical influence and to halt its pivot to the West, Moscow has chosen a traditional confrontational strategy involving a comprehensive set of instruments of hybrid, economic and political pressure, including direct threats of “consequences, as in Ukraine”, should the country’s authorities continue their European-integration course.
In the context of political pressure, this concerns above all the creation of artificial political instability and hybrid interference in electoral processes during the parliamentary elections in Armenia (7 June this year) with the aim of overthrowing the government of Nikol Pashinyan and changing the state’s foreign-policy course. One can speak of the Kremlin’s attempt to implement a scenario of political revanche by pro-Russian forces through large-scale covert disinformation and propaganda campaigns aimed at discrediting the incumbent prime minister, Nikol Pashinyan, and supporting pro-Russian candidates (above all the “Strong Armenia” alliance of the Russian-Armenian oligarch Samvel Karapetyan); the manipulation of public opinion through networks of fake news sites, bot farms and sham media platforms; the use of an “electoral landing force” technique (referring to attempts at the large-scale airlifting of up to 100,000 ethnic Armenians from the diaspora in Russia in order to influence the results of voting inside the country, for which, according to Western intelligence services, up to $50 million had been allocated); and other methods. The convincing victory of the pro-government Civil Contract party (around 50% of the vote) broke this scenario and became a geopolitical defeat for Russia, forcing it to shift to a tactic of long-term sabotage of European-integration reforms and the provocation of artificial destabilization.
Towards Georgia, Russia is acting according to a scenario of “soft absorption”, seeking – through a combination of geopolitical blackmail, economic privileges, political pressure on the ruling elite and the comprehensive application of instruments of “soft” and “hard” power – to secure Tbilisi’s “voluntary” renunciation of integration with the European Union and the North Atlantic Treaty Organization, the country’s return to the sphere of Russian geopolitical influence and its gradual hybrid annexation.
The Kremlin uses economic ties as a powerful instrument of hybrid influence over Georgia, given the structural dependence of its economy on Russia.
It is precisely the economic sphere that forms the key levers of influence opening up broad opportunities for Moscow to exert pressure on the Georgian leadership with the aim of imposing Russian political interests. It is in this light that one should view the adoption by the government of Georgia of a series of political decisions that have marked the country’s turn away from the West towards Moscow.
This concerns, first of all, the refusal of the Georgian Dream government to impose economic sanctions against Russia after its full-scale invasion of Ukraine in 2022, which effectively turned Georgia into a convenient logistics hub through which Moscow seeks to partially neutralize sanctions restrictions.
Another pro-Russian step by the government can be considered the adoption by the Georgian parliament in May 2024 of the law “On Transparency of Foreign Influence”, despite mass protests and sharp criticism from the United States and the European Union. The passage of this law, which almost entirely duplicates its Russian analogue and is aimed at suppressing civil society and independent media, provoked a deep and protracted political crisis in the country and an internal political split in Georgian society, and became a blocking factor on the path of Georgia’s European and Euro-Atlantic integration.
New Logistics Corridors of South Caucasus as Element of Global Rivalry
The geopolitical changes in the South Caucasus have radically altered the global significance of this region in the context of building new secure logistics corridors between Europe and Asia, which, amid the decline of Russia’s transit role and the growth of conflict potential in the Middle East, are becoming ever more important for the world economy. This concerns above all the project of the so-called “Middle Corridor” (also known as the Trans-Caspian International Transport Route), which is intended to create a reliable multimodal trade route between China and the countries of Europe in circumvention of Russian territory. Amid the rapid growth of freight flows on this axis, this logistics corridor of roughly 4,000 kilometers – combining rail, road and maritime transport routes from China through Kazakhstan, across the Caspian Sea, and via Azerbaijan, Georgia, Türkiye and the Black Sea onwards to the European Union – is increasingly becoming an important element of the new architecture of Eurasian logistics.
After 2022, this corridor turned from a theoretical alternative into a real logistics route. Thus, in 2021 the volume of freight it carried amounted to just 840,000 metric tons, whereas by the end of 2025 it had grown more than fivefold – to a record 5.2 million metric tons. Container traffic increased 2.6-fold, which testifies to the involvement of major international operators.
New opportunities are opening up thanks to the prospective implementation of the TRIPP project (The Trump Route for International Peace and Prosperity), which was agreed by United States President Donald Trump, Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan at a trilateral meeting in Washington in August 2025 and acquired practical shape in a series of Armenian–American framework agreements signed during the visit of Secretary of State Marco Rubio to Yerevan on 26 May 2026. This project (which is a diplomatic and infrastructural reformatting of the Russian project of the so-called “Zangezur corridor”) envisages the creation of a transport, energy and digital node 43 kilometers long in the south of Armenia (Syunik Province) that will connect the main part of Azerbaijan with its exclave of Nakhchivan and with Türkiye. Its infrastructure is to be transferred to the management of an international consortium (under the auspices of the United States, with 74% belonging to it and 26% to Armenia) for a term of up to 99 years, minimizing the security risks of military escalations in the region.
At the same time, in geopolitical and geo-economic terms, the “Middle Corridor” (including the TRIPP project) is radically changing the balance of power in Eurasia, reducing Russia’s influence and creating new alliances.
Challenges and Opportunities for Ukraine
For Ukraine, the changes in the balance of power in the South Caucasus open up a range of opportunities for projecting a strengthening of its presence in this strategically important region.
One promising avenue in this context could become military-political partnership. Ukraine, which acts as a key catalyst of change in the South Caucasus by containing Russian expansionism and helping to push Russia out of regional processes, is turning – for the states of the region interested in restraining the Kremlin’s imperial ambitions – into an important geopolitical partner, an alternative center of power capable of guaranteeing security and stability.
In the security dimension, such a partnership can rest on our state’s substantial military potential and on the unique military experience it has gained in the process of countering Russian aggression, the study of which could be useful for the countries of the South Caucasus. Today, Ukraine serves as a “shield” that ties down the bulk of Russia’s military resources, making it impossible to use them for pressure on the countries of the South Caucasus – which, in particular, has allowed Armenia and Azerbaijan to pursue more independent policies without looking over their shoulders at Moscow.
Yet another strategic avenue could become multidimensional economic partnership, in which Ukraine offers new sales markets and a European-integration vector, while the countries of the South Caucasus act as important partners in ensuring energy, food and raw-materials security and in developing trade, creating an alternative to Russian goods on local markets and an economic counterweight to Russian monopolies.
Ukraine is viewed as a potential end hub for the logistics routes running through the South Caucasus, notably in the context of the “Middle Corridor” project. Given our state’s geographical position and its close integration ties with the European Union, its participation could prove critically important for delivering energy resources, agricultural products and goods from this region and from Central Asia to the markets of the countries of Central, Eastern and Northern Europe and the Baltic states in circumvention of Russian territory, should freight volumes along this route continue to grow. Under such a scenario, Ukraine’s Black Sea ports (above all Chornomorsk) and the ferry link between Ukraine and Georgia become additional logistics links for transporting cargo along this route to the European Union.
At the same time, for Ukraine the “Middle Corridor” project has several critically important geopolitical dimensions. First, by integrating into this logistics route, which is closely linked to the development of the transport corridor of the GUAM Organization for Democracy and Economic Development, it objectively turns into an important geopolitical partner both for the European Union and for the countries of the South Caucasus and Central Asia that seek geopolitical independence from the Kremlin. Ukraine acts as a natural ally of these states in creating sovereign trade routes, which strengthens Kyiv’s regional diplomatic positions.
Second, Ukraine’s participation in the “Middle Corridor” project opens up for it the possibility of becoming part of the European Union’s Global Gateway strategy, attracting European investment in the modernization of infrastructure and ports and aligning them with European Union logistics standards, which will be an important step in the context of our state’s integration into the European Union.
Third, Ukraine’s inclusion in the logistics chains supplying the energy and raw-material resources of the Caspian region to the European Union will allow it to directly obtain oil, gas and critically important minerals needed for the defense industry, high-technology sectors and the “green” transition.
Fourth, the transformation of the Black Sea into a safe zone of international transit reduces the geopolitical impact of Russia’s military projection and restores to Ukraine the status of a key maritime player in the region.
At the same time, in a broader context, the current geopolitical changes in the balance of power in the South Caucasus create for Ukraine a series of serious geopolitical, security and diplomatic challenges and risks to its ambitions of becoming an influential regional player.
It must be borne in mind, above all, that today’s international relations in the South Caucasus are the product of a complex balancing of interests, of open and covert alliances and conflicts, of the direct and asymmetric influence of major geopolitical and regional players, and of the action of multidirectional factors. Ukraine therefore needs to build, in its relations with the countries of the region, a complex balance between strategic security interests, economic engagement and these states’ desire to avoid conflicts with the great geopolitical powers, including Russia. A challenge in this context remains finding a balance in relations with Armenia, which is distancing itself from Russia, without harming the long-standing and critically important strategic partnership with Azerbaijan, given the persistently high level of conflict potential in Armenian–Azerbaijani relations. Yet another challenge, in view of Georgia’s critical importance for Ukraine’s logistical access to the South Caucasus, is the search for a balance in relations with the pro-Russian Georgian Dream government without losing the goodwill of Georgian civil society, which actively takes pro-Ukrainian and pro-European positions, and the possibility of preserving a shared European-integration track.
An important challenge to the strengthening of Ukraine’s regional role may become the Turkish factor, given that Türkiye is today the main beneficiary of the reduction of the Russian presence in the South Caucasus. Without a strategic partnership with Ankara that involves the search for balances across a broad spectrum of political, economic and security interests, it will be difficult for our state to build up its positions in the region, lacking autonomous military-political levers there.
Significant risks in the context of the Ukrainian–Russian confrontation remain security and military threats. Ukraine’s intentions to integrate into the logistics of the “Middle Corridor” make Ukrainian infrastructure a target for Russian hybrid attacks and sabotage. One can anticipate Russian attempts to block or destroy logistics nodes in the Black Sea (ports, terminals) with the aim of disrupting Caucasus transit bypassing its territory, which would reduce the attractiveness of the Ukrainian route.
Moreover, as long as the war with Russia continues, Ukraine’s internal economic and diplomatic resources remain critically limited. In the foreseeable future, this resource deficit may become a constraining factor for the active advancement of Ukrainian interests in the South Caucasus, which will clearly require substantial financial and political investment currently needed for internal defense and reconstruction.
The publication is prepared under the project “Strengthening the Analytical Capabilities of the Foreign Policy Decision-Making with the Civil Society” of the Centre for International Security with the support of the Konrad-Adenauer-Stiftung Ukraine.
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