The implementation of the International North–South Transport Corridor (INSTC) has entered a practical phase: Iranian authorities have announced the acquisition of a 34-kilometer section of the Rasht–Astara railway, paving the way for construction on a key segment of the route linking Russia, Iran, and India. Yet the future of this project and related initiatives, including the development of gas infrastructure, largely depends on the state of Russian-Azerbaijani relations, which in recent months have experienced a phase of controlled cooling.
Despite political difficulties, economic dynamics remain robust. Between January and August 2025, bilateral trade grew by 13.5 percent, reaching 3.34 billion US dollars. Azerbaijani exports to Russia rose by 6.7 percent to 818 million dollars, while imports from Russia increased by almost 16 percent, totaling 2.5 billion dollars. These figures demonstrate that trade continues to serve as a stable foundation of bilateral relations and shows relative resilience to fluctuations at the political level.
At the same time, the political dimension has noticeably lost its former intensity. The formal trigger for a change in tone was the AZAL plane crash, which accelerated the shift to a new format of dialogue. For Baku, this has opened the door to resuming contacts with Washington, frozen for more than a decade, as well as to deepening its multi-vector strategy — from strategic engagement with Türkiye to strengthening ties with the EU, China, and the United States. In this logic, the crisis is not destructive: it represents rather a temporary pause, controlled by both sides, and does not exclude the possibility of restoring the previous level of coordination.
At the same time, long-term trends indicate Azerbaijan’s gradual departure from Russia’s systemic influence. Baku seeks to minimize dependence in areas such as security, energy, and trade, while simultaneously weakening former informal mechanisms of interaction — from parallel imports to elite-level dialogue. The humanitarian sphere is also being revised, with a reduction in the density of contacts. Moscow, for its part, is also adjusting its approach, showing readiness to abandon some previous instruments of coordination regardless of Baku’s reaction.
In this context, the fate of the western segment of the INSTC remains in question. Iran attaches strategic importance to the project, but without Azerbaijan’s active participation it risks becoming only partially realized, with limited throughput capacity. Thus, the transport initiative serves as an indicator of the depth and direction of the transformation in Russian-Azerbaijani relations.
Today it can be argued that the crisis is tactical in nature and does not undermine the foundations of economic interdependence. However, in the long term, the likelihood of a structural redistribution of roles in the region is increasing: Azerbaijan is consolidating its multi-vector policy and strengthening its agency, while Russia faces the gradual erosion of its monopoly position in the South Caucasus. In the coming months, it will be diplomatic moves around the North–South Corridor that will reveal whether the current pause remains temporary or develops into a qualitatively new format of relations between Moscow and Baku.
