Evading Sanctions: Can Iran, Russia, and Turkey Find Common Ground?
A recent report claims that Turkey plans to help Iran and Russia evade Western sanctions by creating an economic corridor between the three countries. It ignores significant political realities.
From left to right: Russian President Vladimir Putin, Iranian President Ibrahim Raisi, and Turkish President Recep Tayyip Erdogan pose for a photo before talks in Iran on July 19, 2022. Image source
Imagine an economic corridor that would allow Russia and Iran to practically evade Western sanctions. A recent brief by the Dutch think tank Clingendeal Institute envisions exactly that. The story became widely circulated across multiple mainstream media platforms amid rising tensions between the West, Russia, and Iran. However, a closer look at regional divisions shows that such an agreement between the three powers is currently unlikely.
At present, each of these countries benefits from different economic corridors that feature some degree of access to markets in the West and the Far East; however, sanctions on Russia due to its ongoing war in Ukraine have limited the effectiveness of these routes in recent years. Moreover, with all three countries aligned in their position on Gaza and the Middle East increasingly unstable, such a corridor seems a natural choice for all three countries from an economic perspective. However, their political differences – especially regarding the South Caucasus – will likely limit multilateral cooperation moving forward.
The limitations of existing trade routes
Although multiple east-west land transport routes offer a wide variety of east-west trade links through the region, none directly links Iran, Russia, and Turkey together in a single route. 2016 saw the launch of the China—EU railway express route via Kazakhstan and Russia, and Turkey saw its first European-bound Chinese train in late 2019. However, sanctions on Russia have severely impacted much of this route, and a new line now bypasses Russia entirely via Kazakhstan, Azerbaijan, and Georgia. In this way, the route effectively leaves Iran and Russia out of the equation.
The Trans-Caspian International Transport Route runs from China through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Turkey, and further to the EU countries. Like the China–EU Express route, it also bypasses Iran and Russia. In 2022, the Transcaspian International Transport Route, also known as the "Middle Corridor," expanded further with the addition of the Uzbekistan-Turkmenistan conduit, which increased its throughput capacity and shortened travel time. By the end of 2023, Uzbekistan, Turkmenistan, and Turkey agreed to form a new international multimodal transport corridor linking China to Europe.
Although Iran is not currently involved in the Trans-Caspian International Transport Route, it advanced the idea of a third spur through Kyrgyzstan at a Shanghai Cooperation (SCO) meeting in October. In parallel, Uzbekistan also proposed a transport corridor linking the route to Russia. Should these plans come to fruition, they would directly connect Russia and Iran to China and the flow of global east-west trade, significantly enhancing their ability to withstand Western sanctions. It is from these proposed expansions that the possibility of an economic corridor between Iran, Russia, and Turkey emerges. However, political disagreements between these three countries are a substantial barrier to overcome.
The EU–China Railway Express
The Trans-Caspian International Transport Route runs from China through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Turkey, and further to the EU countries.
A complex regional situation
Any economic corridor connecting Russia and Iran with Turkey would have to traverse the South Caucasus, a region of rising tension and volatility, particularly between Armenia and Azerbaijan. Although such a land route could bypass Armenia via Georgia – as other major transport lines do – political disagreements between major regional players could hinder cooperation. Last year, Azerbaijan launched a large-scale military offensive against the ethnic Armenian separatist exclave of Nagorno-Karabakh. The self-proclaimed republic - which the Armenian government supported – ceased to exist within 24 hours of the Azerbaijani offensive. More than 100,000 ethnic Armenians, who comprised some 80 percent of Nagorno-Karabakh's population, fled to Armenia within the week.
Tensions between Armenia and Azerbaijan remain high. The two ethno-states maintained sizeable populations within each other's territories following their establishment after the dissolution of the Soviet Union in 1991 – the legacy of a once porous region where both populations carved out homes in the region's mountainous and challenging terrain. The ethnically Armenian Nagorno-Karabakh was one of these enclaves, as is the ethnically Azerbaijani Nakchivan Autonomous Republic, which lies in what was previously claimed as Armenian territory.
In Soviet times, the Azerbaijan Soviet Socialist Republic controlled Nagorno-Karabagh under the condition that it be kept autonomous. When the newly independent Azerbaijan sought to annul the region's autonomy in 1991, the region erupted into a brutal war that resulted in Azerbaijan's defeat and the creation of a separatist republic entirely within its territory. However, Azerbaijan's fortunes have changed dramatically since its 1994 defeat by Armenia, mainly due to surging oil and gas exports and a close alliance with Turkey. Between 1995 and 2022, Azerbaijan's GDP increased 45 times and its military budget 29 times. With the launch of the Baku–Tbilisi–Ceyhan (BTC) pipeline in 2005, Azerbaijan became a crucial geopolitical partner of the West. The pipeline, which pumps oil from the Caspian to the Turkish border, cemented the Azeri-Turkish alliance. Turkey also sells vast quantities of advanced weapons to Azerbaijan, enhancing its military power significantly and upending the regional balance of power.
The 2023 war was a decisive victory for Azerbaijan in two critical respects. First, it overwhelmed and secured Nagorno-Karabagh, incorporating the once autonomous republic into its territory. Second, Azerbaijan ensured open and free access to its Nakhchivan exclave through Armenian territory – known as the Zangezur corridor – by threatening a land blockade. This latter measure was opposed by both Armenia and Iran but endorsed by Turkey. Azerbaijan and Turkey are united by common Muslim heritage and religion, close ethnic and linguistic ties, and shared animosity toward Armenia. Both countries' leaders describe the relationship between their nations as "one nation, two states." With Azerbaijan’s regional power rising, some hardliners there refer to Armenia as “Western Azerbaijan” with plans to annex entire regions of the country to create a direct corridor between it and Turkey. As Azerbaijan's main backer, Turkey has no diplomatic relations with Armenia. Turkey sealed its border with Armenia in 1993 and has kept it shut ever since.
The legacy of these wars and the subsequent divisions between the major powers of the region will likely inhibit future cooperation. With Azerbaijan emboldened and increasingly aggressive, the three powers will likely be at odds with one another over this issue for the foreseeable future.
Complicated territorial disputes. Prior to 2023, Armenia and Azerbaijan held exclaves surrounded by each other’s territories. Now, an ascendent Azerbaijan could push for even greater concessions from its comparatively weak neighbor. Image source
Russia's diminished influence
Although Russia has played a significant role in the South Caucasus for centuries, Moscow's influence has waned in recent years. It was Russia who brokered the 1994 ceasefire that ended the first war between Armenia and Azerbaijan. In 2020, when Azerbaijan regained some parts of Nagorno-Karabakh after a brief war, Russia again brokered a ceasefire between the two countries and deployed some 2,000 peacekeepers to the region. These peacekeepers ostensibly ensured Armenia's access to Nagorno-Karabagh via the Lachin corridor.
When Azerbaijan cut off the Lachin corridor and imposed a blockade on Nagorno-Karabagh in 2022, the Russian peacekeepers could do little to stop it. The Russian forces later failed to stop the September 2023 Azeri military offensive, which occurred in violation of the 2020 ceasefire agreement and led to the displacement of more than 100,000 ethnic Armenians – almost the entire population of Karabakh.
The collapse of Russian support has contributed to the sound defeat of Armenian forces and effectively ended Russia's role as a regional arbiter. Moscow is now largely perceived as just one of several intermediaries, none of whom can impose its will on either side. These factors jeopardized Russia's long-term presence in the South Caucasus amid the backdrop of its ongoing war in Ukraine. As a result, Moscow's regional standing is significantly reduced, particularly regarding its ability to find a political solution that would allow for a direct corridor between it, Turkey, and Iran.
Although they initially planned to stay until November 2025, Russian peacekeepers began withdrawing from Nagorno-Karabakh on April 17. Image source
Iran and Turkey: barriers to cooperation
Iran and Turkey have relatively poor relations, and tensions between the two major Middle Eastern powers remain high. Although both countries are united in their joint opposition to Israel's military operation in Gaza, their positions diverge sharply regarding the South Caucasus. While Turkey is unequivocal in its support for Azerbaijan, Iran opposes any geopolitical changes in the Caucasus. It is ready to do what it takes to prevent the establishment of the Azeri-controlled Zangezur corridor.
Iran's increased focus on Armenia rests on its desire to preserve a transport connection to Europe and longstanding fears of domestic Azeri secessionism. Azeris are Iran's largest ethnic minority, and with a population of 12 and 23 million, more Azeris live in Iran than in Azerbaijan. Moreover, this group is predominantly concentrated in Iran's northwest along its border with Azerbaijan, furthering fears of a territory-based secessionist movement. Iran also fears Azerbaijan's growing presence in the region, including militarily, and its ties with Iran's historic rival, Turkey. A terrorist attack on Baku's Embassy in Tehran in 2023 led to the unprecedented deterioration of the bilateral relations between Iran and Azerbaijan, with Azerbaijan's President Aliyev describing their present state of relations as "at the lowest level ever." With Turkey being Azerbaijan's primary benefactor, this severely limits the prospects of cooperation between it and Iran. In this way, the poor relations between Iran and Turkey, particularly regarding the South Caucasus, will likely inhibit further cooperation between them.
A senior Iranian source told Middle East Monitor that Armenia is one of 22 countries to submit official proposal requests to purchase Iranian drones such as the Simorgh, pictured above. Image source
Turkey as a lynchpin
Turkey's geography, which features a border to the South Caucasus and direct access to the Mediterranean Sea, means that Ankara decides whether such an economic corridor can move forward. Ankara is also positioned to weigh its options between the interests of the West and those of Iran or Russia, potentially gaining concessions from each. This position is likely why Turkey, a NATO member, never joined the West in imposing sanctions on Russia, now making it a critical partner for transiting Russian oil shipments to the global market amid the ongoing war in Ukraine. At the same time, Turkey has beefed up its strategic cooperation with Ukraine and plays a vital role in enabling NATO's presence in the Black Sea. In this way, Turkey benefits more from bilateral relations than a broad multilateral deal that could put it at greater odds with its NATO partners in the West.
However, Ankara's balancing act is threatened by Erdogan's brand of pan-Turkic nationalism, which also hinders the possibility of creating an economic corridor linking it with Russia and Iran. Although this brand of nationalism plays well in Azerbaijan, it is less well received in Russia and Iran, resulting in tensions between them and these countries. Similarly, the prospect of another Turkish-supported Azerbaijani war with Armenia could jeopardize all prospects of rapprochement between Ankara and Tehran. Turkey's power ambitions, more than even Russia's aspirations of regional influence and control, are clearly at loggerheads with any plans for a political-economic alliance benefitting all states in the region.
Shared visions of pan-Turkic nationalism between Turkish President Erdogan (left) and Azerbaijani President Aliyev (right) threaten broader regional cooperation. Image source
Conclusion
Given the complex relations between the primary and secondary powers of the South Caucasus, it is unlikely that Iran, Russia, and Turkey will come together to form a new political and economic bloc in opposition to the West. Although bilateral deals and negotiations between these three powers remain ongoing and possible to varying degrees, divisions over the South Caucasus – especially between Iran and Turkey – will likely hinder multilateral cooperation between them. However, with Iran and Russia separately and increasingly taking advantage of eastbound trade routes and Russia increasingly relying on Turkey to reach the global market, trade corridors between these countries allow powers such as Iran and Russia to evade sanctions to some extent. Regardless, Western fears that Iran, Russia, and Turkey will band together in a way that could allow the former two to bypass sanctions further are largely unwarranted.
With Turkey increasingly serving as a major arbiter between Western and Eastern interests, its regional influence will likely expand in the coming years. This is potentially bad news for Armenia and their Iranian backers, further diminishing any chance of trilateral economic cooperation moving forward.