Armenia, Azerbaijan, and Georgia confront mounting economic disruption as the expanding conflict with Iran severs trade routes, energy flows, and remittance channels that have sustained the South Caucasus for decades.
The three nations, sandwiched between the Black Sea and Caspian Sea, face cascading effects from a conflict in which they hold no direct stake—a pattern familiar to transit regions caught between major powers. Analysis from the Carnegie Endowment for International Peace warns that the disruption extends beyond immediate economic losses to fundamental questions about regional connectivity and sovereignty.
For Armenia, the conflict threatens its most critical lifeline. With Turkey maintaining a closed border and relations with Azerbaijan remaining hostile following the 2020 and 2023 wars, Iran has provided Armenia's primary surface access to the outside world. Trade volumes through Iranian routes have declined sharply as military operations disrupt transportation corridors, while remittances from the estimated 100,000 Armenians working in Iran have dropped precipitously.
"We cannot afford to lose our Iranian connection," an Armenian logistics company director told regional media, speaking on condition of anonymity due to the sensitivity of cross-border trade. The dilemma reflects Armenia's broader geopolitical isolation—increasingly distant from traditional patron Russia, unable to normalize relations with Turkey or Azerbaijan, and now watching its Iranian alternative dissolve.



