The South Caucasus is undergoing one of the most profound strategic transformations since the early 1990s. The military outcomes of 2020 and 2023 effectively ended the territorial dimension of the Armenia–Azerbaijan conflict, removing the core dispute that shaped the regional agenda for almost three decades. While these developments have created unprecedented room for diplomatic normalization, the path toward a stable regional order remains uncertain, shaped by a mix of new opportunities and old constraints.
Azerbaijan’s restoration of sovereignty fundamentally altered the balance of capabilities between the two states. This shift reduced the relevance of earlier negotiation mechanisms and forced both regional and external actors to reassess their strategies. In place of the static, security-heavy environment that defined the post-ceasefire years, there is now a contest over who will shape the emerging post-conflict architecture. The diplomatic landscape reflects this competition: the United States seeks to institutionalize its role through new formats; the European Union aims to maintain visibility after deploying monitoring capabilities; Russia attempts to retain influence despite diminished leverage; and Iran positions itself as a guardian of regional status-quo lines it considers strategically indispensable.
The interaction of these actors has produced a multi-layered diplomatic field in which Armenia and Azerbaijan must navigate overlapping expectations. For Azerbaijan, the priority is embedding the post-2023 regional order in legally binding arrangements and ensuring that future connectivity projects enhance its strategic depth. Armenia, meanwhile, faces a dual challenge: adjusting its foreign policy orientation while managing the internal political tensions that such adjustments entail. The gap between external commitments and domestic acceptance remains one of the most persistent constraints on Yerevan’s negotiating capacity.
Against this backdrop, new connectivity initiatives—whether referred to as corridors, routes, or transit frameworks—have become a litmus test for the willingness of regional states to reimagine interdependence. For Baku, expanding logistical integration is not merely an economic ambition but a mechanism for locking in stability through shared interests. For Yerevan, such projects simultaneously offer economic incentives and generate political sensitivities, as the public debates their implications for sovereignty, regional alignments, and long-term strategy.
Another important dimension is the gradual emergence of societal-level engagement. Although such initiatives remain limited, the shift from wartime narratives to cooperative language among civil, academic, and business circles represents a meaningful change. In a region where public perceptions historically constrained diplomatic flexibility, even incremental trust-building can recalibrate what is politically feasible. Still, societal engagement cannot substitute for institutional reforms that would enable Armenia to manage domestic contestation and reduce the political volatility surrounding foreign-policy decisions.
The durability of peace will ultimately depend on whether the region can transition from ad-hoc crisis management to predictable cooperation. This requires three mutually reinforcing conditions: first, the consolidation of a single negotiation format that is not undermined by external rivalry; second, the institutional strengthening of political systems—especially in Armenia—to ensure continuity of commitments; and third, the transformation of post-conflict relations into mutually beneficial economic and infrastructural linkages.
None of these conditions can be achieved quickly. Yet the trajectory of the past two years shows that the South Caucasus has moved beyond the era in which negotiations revolved around ceasefire maintenance. The central question is no longer how to prevent violence but how to design a regional order resilient to geopolitical shifts, internal political changes, and the lingering psychological legacy of conflict. If the parties—and the broader constellation of regional and global actors—are able to align on these objectives, the South Caucasus may enter a period defined not by the management of instability, but by the construction of a sustainable peace.
