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.
Azerbaijan has begun exporting energy products to Yerevan and is serving as a transit route for wheat from Kazakhstan and Russia.
Armenian officials, meanwhile, say they are finalizing a list of industrial and agricultural goods for export to Azerbaijan.
"I agree that Armenia and Azerbaijan are acting in a way that reduces Moscow's influence in the Caucasus, though I don't know to what extent the Russia factor is driving their calculations," Joshua Kucera, a senior analyst for the South Caucasus at International Crisis Group, told RFE/RL.
"I suspect it is a secondary consideration: Their first priority is to resolve their conflict, and their relations with Russia or any other power is secondary to that." he added.
The neighboring countries were at war for more than three decades over Nagorno-Karabakh, a region of Azerbaijan that was mostly populated by ethnic Armenians. Momentum toward normalization followed Azerbaijan's recapture of Karabakh in 2023 and a Washington peace summit in August 2025 that helped break the deadlock.
For decades, Armenia has faced a partial blockade, with borders closed by Azerbaijan and its ally Turkey. With Iran constrained by international sanctions, Armenia has relied heavily on Georgia as its main transit corridor -- particularly for trade with Russia, its largest trading partner and supplier of essential goods.
But both Baku and Yerevan have seen ties with Moscow deteriorate.
Armenian Prime Minister Nikol Pashinian has frozen his country's participation in the Collective Security Treaty Organization (CSTO), a Moscow-led alliance, further distancing the country from Russia's security umbrella. And Azerbaijani President Ilham Aliyev has sharply criticized Moscow over the downing of an Azerbaijani airliner in late 2024.
Both leaders have also backed the US-supported Trump Route for International Peace and Prosperity (TRIPP), a corridor signed in Washington last August aimed at connecting Azerbaijan with its Nakhchivan exclave while reducing the logistical and political influence of both Russia and Iran.
Against this backdrop, new trade flows between Armenia and Azerbaijan are beginning to take shape.
Oil And Gas: From And Through Azerbaijan
Currently, goods from Azerbaijan to Armenia transit through Georgia. However, Richard Giragosian, founding director of the Regional Studies Center in Yerevan, does not rule out the possibility of direct trade opening up across the Azerbaijan-Armenia border.
"What we see with the recent arrival of Azerbaijani civil society activists through a border crossing point in the northern Tavush region, we should expect the opening of road access," Giragosian said.
For this to take place, however, "We need to have concluded the delimitation and demarcation of this passage," Farhad Mammadov, director at the Center for Strategic Studies, an organization close to the Azerbaijani government, told RFE/RL.
Despite a sharp decline in trade with Russia, Moscow still accounted for 35.5 percent of Armenia's foreign trade last year, according to Armenian government statistics, followed by China (12.5 percent) and the European Union (11.8 percent).
Azerbaijan sent its first trains of 22 wagons loaded with gasoline to Armenia last December. In-mid January, Prime Minister Nikol Pashinian stated on social media that "premium-grade gasoline has mainly been imported from Azerbaijan, and...the minimum price of premium gasoline in Armenia has decreased by 15 percent."
Armenia imported 490,000 tons of petrol and other fuel last year, about two-thirds of which came from Russia.
"Any amount of petroleum products, gas supplies from Azerbaijan, etc., represents progress in terms of offsetting Russia's dominance of the market,” Giragosian in Yerevan told RFE/RL.
"Armenia may consider gas imports from Turkmenistan through Azerbaijan. At the same time, there is also a more ambitious plan for Armenia's import of Azerbaijani natural gas, as well," he added.
"If Azerbaijan has enough gas to give Armenia and Armenia and Turkmenistan agrees how to deliver Turkmenistan gas to Azerbaijan, these can be possible too," Mammadov told RFE/RL from Baku.
Azerbaijan has broadly agreed to take on a transit role for Armenia since last year and is already serving as a transit route for wheat from Kazakhstan and Russia. According to Azerbaijani official statistics, Russia has so far sent about 23,000 tons of wheat and about 700 tons of fertilizer to Armenia through Azerbaijan.
However, the peace remains fragile without a final treaty in place. Baku still demands Armenia amend its constitution to remove perceived territorial claims over Karabakh.
Emily Babakanian Frazier, a research fellow at the Regional Studies Center, told RFE/RL last year that while immediate supply cuts are unlikely, Armenia remains vulnerable to Azerbaijan cutting energy links in the medium to long term.
Giragosian argues that Russia found itself marginalized with the end of the Nagorno-Karabakh conflict, during which Moscow had wielded primary leverage over both nations. However, he warns, this shift is temporary.
"I expect an angry, vengeful Putin to try to regain lost Russian influence after a cease-fire in Ukraine. Armenia and Azerbaijan are drawing closer because of this shared threat," he added.
