Date first published: 19/08/2025
Key sectors: all; transportation
Key risks: war-on-land; business and economic
Risk development
On 8 August Armenian President Nikol Pashinyan and Azerbaijani President Ilham Aliyev signed a joint declaration pledging to end their decades-long conflict during a meeting with United States (US) President Donald Trump in Washington. The deal grants the US exclusive rights to develop the Zangezur trade corridor – rebranded as the Trump Route for International Peace and Prosperity (TRIPP) – connecting Azerbaijan to its Nakhchivan exclave through Armenian territory, previously Baku’s key demand. It marked a key advance in protracted peace talks and signalled the US’s rise and Russia’s retreat as peace brokers in the South Caucasus. However, the declaration has left several major sticking points unresolved, threatening the ratification and implementation of an official peace agreement.
Why it matters
The declaration is a positive step towards reaching peace between the long-time adversaries. The Zangezur Corridor – now rebranded as TRIPP – had been a major spoiler in negotiations and even raised concerns in Armenia that Baku would use force to get the corridor running. The declaration also addressed Baku’s demand to dissolve the Organisation for Security and Cooperation in Europe (OSCE) Minsk Group – a body overseeing previous negotiations, which Azerbaijan has long found biased and ineffective.
The deal also changes geopolitical dynamics in the region – traditionally centred around Russia’s dominant position. Moscow’s role has been slowly diminishing since at least Azerbaijan’s attack on Armenia in 2022 and notably after Baku’s takeover of the breakaway region of Nagorno-Karabakh (NK) in September 2023, during which Moscow chose not to interfere, significantly weakening its relationship with Armenia. This – coupled with Moscow’s prioritisation of its invasion of Ukraine – has created an opportunity for Trump. The timing of the agreement – which came only a week ahead of Trump’s summit with Putin – has likely contributed to Moscow’s measured reaction to TRIPP, with Russian Deputy Foreign Minister Aleksei Overchuk stating on 15 August that Moscow supported Armenia in its approval of TRIPP.
Background
There remain some uncertainties about TRIPP. The joint seven-point declaration stipulates that “Armenia will work with the US and mutually determined third parties to set forth a framework for the TRIPP”. Trump added that Armenia was creating an exclusive partnership with the US, with some US companies “anxious to get in.” However, it is unclear how the corridor will be overseen – previously the most contentious point.
The presence of the US in Armenia also raised significant concerns in Iran, where some authorities vowed to block the corridor. Others, however, de-escalated this rhetoric, stating that Yerevan had confirmed that there would be no US security forces stationed along the route – which will likely be located close to the border with Iran.
Risk outlook
The deal marked a positive development but did not guarantee a peace deal. This is notably because of the lack of resolution of another major sticking point – Baku’s demand that Armenia change its constitution due to its reference to Nagorno-Karabakh. Other issues – including the closure of the European Union (EU) Monitoring Mission in Armenia, the release of Armenian prisoners, border demarcation and the presence of Azerbaijani troops on Armenian territory – also remain unresolved.
A continued commitment will be required from both leaders to address the remaining issues and conclude their long-running conflict officially. This will include the ability to explain the deal and any potential concession to their respective citizens, which has historically been a bigger problem for Pashinyan, who is also facing legislative elections in 2026.
However, despite the persisting challenges, cautious optimism prevails – Armenia and Azerbaijan have never been closer to peace than they are now.