The United States needs to develop and implement a new Caucasus strategy to account for the region’s connectivity alternatives to the Persian Gulf.

As the military confrontation between the United States, Israel, and Iran expands into a multi-theater conflict, Azerbaijan is emerging as a strategically significant yet underappreciated actor, reshaping energy flows, logistics corridors, and regional alignments far beyond the immediate Persian Gulf battlefield. The world’s attention is riveted on the Strait of Hormuz, where sporadic Iranian attacks on vessels passing through this key waterway have effectively closed it to commercial traffic even after this week’s ceasefire. Iran’s attacks on Gulf oil and gas-producing states make big headlines. Now the United States will be blockading the strait as well. However, while Iran’s northern border sees little missile fire, the South Caucasus, especially Azerbaijan, remains a highly contested front in the conflict.

Following the decapitation strikes that eliminated the top leaders in the Tehran regime, increasingly decentralized and assertive elements of the Islamic Revolutionary Guard Corps (IRGC) have intensified asymmetric operations across the region. These include drone and missile attacks against Gulf infrastructure and maritime targets, which have disrupted traditional energy routes and prompted global markets to seek alternative suppliers and transit pathways. As a result, the Caspian basin, anchored by Azerbaijan, has become more important as a relatively stable source of oil and gas.

However, Azerbaijan’s role is not limited to energy supply. In recent weeks, Baku has quietly assumed a second, equally important function as a logistical and humanitarian gateway into Iran, which might lead to an intermediary role. On March 10, 2026, Azerbaijan dispatched its first humanitarian aid shipment—approximately 30 tons—into northern Iran, followed by a second, larger shipment of 82 tons on March 18, timed to coincide with the ancient Persian New Year and spring holiday, Nowruz. These deliveries, consisting primarily of food, medicine, and medical equipment, were sent via land routes likely crossing through the Astara corridor into Iran’s Caspian provinces.

The speed of these shipments is impressive. They began just days after a serious security incident in which drones attacked Azerbaijan’s Nakhchivan exclave, an attack Baku called “a terrorist act committed by Iran against the state of Azerbaijan,” which Tehran denied. Instead of escalating the conflict, Azerbaijan responded with a carefully balanced mix of deterrence and de-escalation, reinforcing its sovereignty while also providing humanitarian aid. This dual approach reflects a broader strategy aimed at preventing Azerbaijan from engaging in military hostilities.

Azerbaijan is not only sending aid but also becoming a transit hub for aid from others. With maritime routes in the Gulf increasingly contested and air corridors constrained, northern overland access via the South Caucasus is gaining strategic relevance. This positioning highlights Azerbaijan’s delicate balancing act. On one hand, Baku maintains close security and intelligence ties with Israel and strong alliances with Turkey and Pakistan.

On the other hand, it works to prevent direct conflict with Iran. This balancing act is strengthened by Azerbaijan’s growing role in European energy diversification, especially through the Trans-Caspian Oil Transport System, which brings Kazakh oil to the Baku-Tbilisi-Ceyhan pipeline, the Southern Gas Corridor, and the proposed Trans-Caspian Pipeline, which would move Turkmen gas westward while avoiding both Russia and Iran.

The United States has a clear strategic interest in strengthening this role. Azerbaijan is a crucial segment of the “Middle Corridor”—a transcontinental trade and energy route linking Central Asia to Europe via the Caspian and South Caucasus. As global supply chains change due to conflict and geopolitical fragmentation, the security of this corridor is becoming a strategic priority. Despite the recently signed strategic partnership between the two countries, US policy toward Azerbaijan remains constrained by an outdated legislation: Section 907 of the Freedom Support Act of 1992. 

Originally enacted under pressure from Armenian lobbying groups during the First Karabakh War, Section 907 restricts direct US assistance to Azerbaijan, making it the only post-Soviet state subject to such limitations. Although successive administrations have issued temporary waivers—most recently in 2025—these workarounds are insufficient for the current strategic environment.

The situation that gave rise to Section 907 no longer exists. Azerbaijan regained control over Karabakh following conflicts in 2020 and 2023, fundamentally altering the regional balance and significantly diminishing Russia’s influence in the region. Armenia itself has begun to shift westward and signed a pledge to reach a peace agreement with Azerbaijan at a White House summit hosted by President Donald Trump in  August 2025, erasing the rationale for punitive measures against Baku. Meanwhile, Azerbaijan has demonstrated its value as a security partner, an energy supplier, and, now, a logistics hub in a time of war.

Repealing Section 907 would enable the United States to export advanced defense systems to Azerbaijan, improving its ability to defend critical infrastructure and transit routes. This is crucial given the ongoing threat from Iran, including drones and hybrid warfare tactics near Azerbaijan’s borders. Enhancing Azerbaijan’s defenses would not only protect its sovereignty but also secure the larger energy and trade networks that Europe and US allies increasingly rely on.

There is also a broader strategic opportunity. By strengthening cooperation with Azerbaijan, the United States can help anchor the South Caucasus more firmly within a Western-aligned framework, counteracting the influence of China, Russia, Iran, and their allies. Expanding connectivity through Armenia could further integrate the region economically while helping to reduce long-term conflict risks.

Amid a regional conflict in the Middle East that now extends beyond its borders, Azerbaijan has emerged from a peripheral player to a key front-line state in both security and energy. It is simultaneously deterring Iranian pressure, facilitating humanitarian access, and providing alternative supply routes for global markets. 

The United States should develop a clear, effective strategy—initially outlined by the Trump administration in the South Caucasus—dealing with the South Caucasus, the Caspian, and Central Asia in conjunction with Iran. The emerging map of the conflict clearly demonstrates that the future of regional stability and energy security won’t be determined in the Persian Gulf alone. It will also depend on transportation corridors, partnerships, and countries like Azerbaijan—located at the crossroads of Europe, Asia, and the Middle East—whose strategic importance is rapidly increasing.

About the Author: Theodore Karasik

Dr. Theodore Karasik is a non-resident fellow in Russia and Middle East Affairs at the Jamestown Foundation. Previously, he was a senior advisor at Gulf State Analytics and a senior political scientist at the RAND Corporation for 20 years, where he analyzed global strategic trends. Dr. Karasik has published op-eds in Foreign Policy and US News and World Report. He received his PhD in History from the University of California, Los Angeles.

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