By Vali Kaleji 

While the Armenian government appears to seek a short-term balance between the U.S. and Russia in the railway sector, its long-term objective is to end Russia’s monopoly and extensive influence over this critical infrastructure in Armenia. The realization of this objective, as well as reforms in the electricity and gas sectors, largely depends on the outcome of the decisive parliamentary elections on June 7, 2026. These elections will determine whether Armenia returns to its pre-2018 foreign policy orientation or continues its recent trajectory toward closer alignment with the West.

 Photo by Denis Belitsky, 2023

BACKGROUND:

On 13 February 2008, Armenia signed an agreement transferring full control of the state-owned Armenian Railways to South Caucasus Railway (Yuzhno-Kavkazskaya zheleznaya doroga, YuKZhD), a wholly owned subsidiary of Russian Railways (RZhD). Subject to mutual agreement, the contract may be extended until 2048. The agreement followed a concession model, transferring operational, managerial, and investment responsibilities to the Russian side. Although ownership of the railway infrastructure formally remained with the Armenian government, operational control, investment decisions, tariff policy, and network development were effectively placed under Russian authority, constituting influence without formal ownership.

The 2008 railway agreement was effectively a continuation, and one of the consequences, of the 2002–2003 “debt-for-assets” agreement between Armenia and Russia, which settled Armenia’s US$ 96 million debt to Russia. The 30-year concession agreement is widely regarded as a major turning point in the development of Russia’s structural influence over Armenia’s economy and infrastructure in the post-Soviet period. Under the debt-for-assets arrangement, ownership or management of six major industrial and economic assets in Armenia, including electricity, gas, electronics, and defense-related sectors, was transferred to Russia, facilitating Russian dominance and influence in other sectors, including railways and telecommunications.

To reduce this monopoly and dependency, the Armenian government signed an agreement with Iran in 2009, one year after the 30-year concession agreement, to construct the “Marand–Norooz–Meghri–Yerevan” railway. Russia opposedthe project, and despite considerable efforts by Armenia, the railway was never realized, leaving Russia’s monopoly over Armenia’s railway network intact.

Plans to revive Soviet-era railway routes in the southern South Caucasus failed to materialize in the transformed regional environment following the Second Nagorno-Karabakh War in 2020. However, the peace agreement signed by Ilham Aliyev and Nikol Pashinyan at the White House on August 8, 2025, marked a new phase in the construction and integration of road and railway routes in southern Armenia. Nevertheless, despite the completion of approximately 80 percent of the 110-kilometer Horadiz–Aghband railway line in southwestern Azerbaijan (around 140 kilometers including auxiliary routes), and Turkey’s initiation of a new 224-kilometer railway line from Kars to the Nakhichevan border, scheduled for completion before 2030, the rehabilitation and construction of the railway line in southern Armenia has yet to begin.

In these circumstances, during a press briefing on February 13, Armenian Prime Minister Nikol Pashinyan stated that a country maintaining “friendly relations” with both Russia and Armenia could “purchase the concession management rights” of Armenia’s railways, which are currently under Russian management. He presented this as a potential solution to Armenia’s loss of “competitive advantage” by having international routes pass through the country. When asked which states could assume such a role, Pashinyan mentioned Kazakhstan, the UAE, and Qatar, while noting that the list was not exhaustive.

IMPLICATIONS:

Pashinyan’s recent statements may represent the latest step by the Armenian government to reduce the country’s dependence on Russia in the infrastructure sector. Following the collapse of the Soviet Union, Russian control and influence over Armenia’s railway network and railway management became particularly significant due to Armenia’s status as a landlocked country. After the First Nagorno-Karabakh War, Armenia’s railway routes with Azerbaijan (the eastern route) and Turkey (the western route) were closed. The disruption of railway connections between Armenia and Azerbaijan also severed Armenia’s rail link with Iran via the Julfa–Nakhichevan route. Consequently, over the past three decades, Armenia’s only active railway connection has been the northern route, a Soviet-era railway line running through Georgia to Russia and the Black Sea. Notably, despite the breakdown of diplomatic relations between Russia and Georgia following the August 2008 war, this railway corridor, like the road route, has remained open and operational.

The absence of Armenia’s railway connectivity in three directions, eastward towards Azerbaijan, southward towards Iran, and westward towards Nakhichevan and Turkey, and the country’s dependence on the northern route through Georgia to Russia significantly strengthened the monopoly position and influence of the Russian-controlled South Caucasus Railway company. The Armenian government’s new approach therefore represents a step toward reducing Russia’s monopoly and influence over Armenia’s railway infrastructure, while also diversifying the country’s rail connections.

However, the most noteworthy aspect is Russia’s continued presence in these developments. Although Russia was excluded from the agreements reached during the Washington summit, it nevertheless expressed readiness to discuss possible participation in the Trump Route with Armenia. Mikhail Kalugin, Director of the Fourth CIS Department at the Russian Foreign Ministry, argued that “there are ample grounds” for such involvement. Among other points, Kalugin referred to South Caucasus Railway, which “holds a concession to manage Armenia’s railway network.”

On the other hand, Armenian Prime Minister Nikol Pashinyan revealed that he had asked Russia to “urgently address” the full restoration of railway sections adjacent to the Azerbaijani exclave of Nakhichevan and the Turkish border. The issue concerns three key railway sections: Yeraskh–Nakhichevan, Gyumri–Kars, and Ijevan–Gazakh. Pashinyan stated that he had raised the matter with Russia more than a month earlier.

However, the Armenian government appears to support Russian participation and investment only in railway sections located outside the so-called “Trump Route.” Addressing possible Russian involvement in the project, Nikol Pashinyan stated that the route is a bilateral initiative with the U.S., adding that “any third-party involvement can be discussed only bilaterally.” Pashinyan also responded to the South Caucasus Railway’s expressed readiness to transfer only the Meghri railway section, through which the Trump Route is expected to pass, from its administration to Armenia, arguing that the statement reflected a “misunderstanding.” “The [Meghri railway] section is not under Russian management for it to be handed over to Armenia. It is Armenia’s sovereign territory, and we have not delegated the management of that sovereign territory to anyone. There is no railway there to be managed by anyone,” Pashinyan stated.

In fact, as Russian Deputy Prime Minister Alexey Overchuk stated, the Russian Federation has decided to begin substantive negotiations on the restoration of two sections of Armenia’s railway network that would reconnect Armenian railways with the railway network of the Republic of Azerbaijan near the town of Yeraskh and with the railway network of the Republic of Turkey near the settlement of Akhuryan. The total length of the sections to be restored has been announced as 1.6 kilometers and 12.4 kilometers, respectively. All of these sections exclude southern Armenia, through which the Trump Route is expected to pass. Nevertheless, the reopening of these railway sections forms part of the Pashinyan government’s Crossroads of Peace project.

CONCLUSIONS:

Armenia’s exit from political and military dependence on Russia is unlikely without ending Russia’s monopoly over the country’s economic infrastructure. The Armenian government took an initial step in this direction by nationalizing the country’s electricity grid, and on July 9, 2025, Armenian President Vahagn Khachaturyan signed a law permitting the nationalization of the national electricity distribution company. However, this decision became politically contentious following the arrest of opposition leader Samvel Karapetyan, who had acquired full ownership of the Armenian Power Grid Company and the Hrazdan Thermal Power Plant in 2017.

Armenia’s dependence on Russian-controlled economic infrastructure extends beyond railways and electricity. The exclusive supplier of natural gas in Armenia’s domestic market is Gazprom Armenia, a Russian-Armenian company established in December 1997, whose shares are wholly owned by Russia’s Gazprom. Consequently, Armenia’s efforts to end Russia’s monopoly and influence over its economic infrastructure face significant obstacles. The realization of this objective will largely depend on the outcome of the crucial parliamentary elections on June 7, 2026, which will determine whether Armenia returns to its pre-2018 foreign policy orientation or continues its recent trajectory toward closer alignment with the West.

AUTHOR’S BIO: 

Vali Kaleji, based in Tehran, Iran, holds a Ph.D. in Regional Studies, Central Asian and Caucasian Studies. He has published numerous analytical articles on Eurasian issues for the Eurasia Daily Monitor, the Central Asia-Caucasus Analyst, The Middle East Institute and the Valdai Club. He can be reached at  This email address is being protected from spambots. You need JavaScript enabled to view it. .

By Eduard Abrahamyan

In recent months, Armenia and Russia have strengthened their relations. A series of high-level meetings shows not just a return to normal diplomacy but a purposeful reshaping of their alliance. Alongside President Putin’s renewed ties with Azerbaijani President Aliyev and the Kremlin’s broader adjustment of its regional strategy, the revived dialogue between Putin and Prime Minister Pashinyan forms part of a wider diplomatic renewal. This shift marks a clear easing of the tensions that strained their bilateral relations from September 2022 to mid-2024.



                                                                        Credit: Wikimedia Commons

BACKGROUND: The intensified Armenia–Russia bilateral reengagement commenced on October 8, 2024, with the Moscow meeting between Putin and Pashinyan, ostensibly ending a two-year estrangement stemming from Moscow’s inaction and the CSTO’s reluctance to deter or even explicitly identify Azerbaijan as the initiator of the September 2022 incursions into Armenian territory. Equally detrimental was the perception that Moscow had tacitly approved Azerbaijan’s September 2023 military operation in Karabakh.

The October 2024 meeting set both sides on a path toward a “new rhythm” in strategic relations, creating the basis for a renewed partnership aimed at resolving the “misunderstandings” that had emerged, as later described by Foreign Ministers Ararat Mirzoyan and Sergey Lavrov. The two leaders have since maintained regular contact through phone calls and in-person meetings throughout 2025. Yerevan also hosted several high-level Russian delegations, underscoring the breadth and institutional depth of the renewed dialogue. Diplomatic sources described this reset as a key turning point that effectively ended the period of tension, with both governments instructing their institutions to pursue a full realignment across all areas of strategic cooperation.

In January and May 2025, the foreign ministers made reciprocal visits, each reaffirming the start of a “new page” in the strategic partnership through “genuine and open discussions on accumulated issues.” This diplomatic thaw reached its peak in June 2025 with the visit of Valentina Matviyenko, Chairwoman of Russia’s Federation Council, to Yerevan, aimed at strengthening parliamentary cooperation. Matviyenko’s visit not only supported Armenia’s evolving foreign policy direction but also highlighted the Kremlin’s engagement in Armenia’s domestic politics. Her meetings in Yerevan were widely seen as a sign of Moscow’s friendly neutrality, or even quiet support for the ruling Civil Contract party ahead of Armenia’s general elections planned for June 2026. After her meeting with Prime Minister Pashinyan on 6 June, Matviyenko stated that “[Pashinyan] conveyed greetings to our president and emphasized that, despite insinuations, he and [Putin] have always maintained constructive, substantive relations without any issues,” sending a clear message to the “ill-wishers” that no divisions exist between the Armenian and Russian leadership.

The revival of high-level diplomacy has taken place alongside Pashinyan’s participation in international forums led or co-funded by Russia. In May 2025, he attended Moscow’s Victory Day parade, one of Putin’s most visible displays of state power and ideological authority. Pashinyan also traveled to Kazan to join the sixteenth BRICS Summit, which the Kremlin presented as proof that Western efforts to isolate Russia had failed. In July, Armenia’s Prime Minister took part in the International Conference on Nature and Environmental Protection in the Altai, supporting Putin’s broader vision of portraying Russia not as a marginal actor in the Turkic world but as the guardian of its historical and cultural origins amid the growth of the Organization of Turkic States. Later, Pashinyan attended the Shanghai Cooperation Organization (SCO) summit, where Pakistan blocked Armenia’s application for full membership. Armenia would otherwise likely have joined one of the most rapidly consolidating non-Western frameworks, arguably challenging the West.

The recent strengthening of Armenia–Russia relations is closely linked to economic interdependence and the gradual improvement of Russia’s public image in Armenia. Economically, Russia has reaffirmed its role as Armenia’s main trading partner, with trade turnover reaching a record US$ 12.4 billion in 2024, more than twice the level recorded in 2022. According to investigative reports, this increase reflects the function of both Armenia and Azerbaijan as logistical intermediaries in Moscow’s sanction-evasion networks. Armenia’s re-export channels have supported the transfer of dual-use goods to, and embargoed gold from, Russia, while Azerbaijan has discreetly facilitated the re-export of Russian hydrocarbons. Together, these practices have formed a coordinated and mutually beneficial regional mechanism that reinforces the Kremlin’s economic resilience. In September 2025, during the World Atomic Week conference in Moscow, Pashinyan and Putin agreed that Rosatom would extend the operation of the Metsamor Nuclear Power Plant for another decade, ensuring continued supply of over 30 percent of Armenia’s electricity. Official statements also noted that the two leaders discussed the potential construction of a new reactor by Rosatom to address Armenia’s concerns about the ageing Soviet-era facility.

Russia’s public image in Armenia has begun to recover from its low point in 2022–2023. A July 2025 poll by the International Republican Institute shows a clear improvement in public attitudes: the share of respondents viewing Russia as the “greatest threat” fell to 27 percent (down from 40 percent the previous year), while 45 percent now regard Russia as Armenia’s most important political partner, an 18-point increase since 2024. This change in perception is driven less by traditional Russian information campaigns or local pro-Russian media than by a deliberate adjustment of Armenia’s state-controlled narrative, which now tends to present Russia in a “pragmatically” neutral light. The outcome is a gradual restoration of public ambivalence, a sentiment neither strongly pro- nor anti-Russian, that mirrors Yerevan’s cautious process of re-accommodation with Moscow.

IMPLICATIONS: The ongoing renegotiation of the Russia–Armenia alliance, alongside Putin’s renewed rapprochement with Azerbaijan as shown at the CIS Dushanbe summit in October, suggests that the recurring “crises” in Moscow’s relations with Yerevan and Baku are not genuine strategic breaks. Instead of marking major shifts, these episodes usually reflect short-term tactical frictions, temporary disagreements that each side manages or uses to achieve immediate political or diplomatic goals.

Such frictions are often exaggerated in Western discussions as signs of a major geopolitical shift, whether portrayed as Armenia’s “pro-Western pivot” or Azerbaijan’s alleged “anti-Russian turn.” In reality, the situation is more nuanced. Both Yerevan and Baku often highlight the appearance of tension with Moscow for strategic purposes, using the perceived distance from Russia to strengthen their negotiating position with Western partners.

For Armenia, this approach supports a dual narrative: expressing European ambitions to gain sympathy and investment while keeping practical ties with Russia for various reasons. Pashinyan’s shifting engagement with the CSTO reflects this duality—not an actual withdrawal, but an effort to push the bloc to act while maintaining reassurance toward Western partners. Likewise, the 2024 removal of Russian border guards from the Armenia–Iran border was largely symbolic, affecting only the Agarak–Nordooz checkpoint, while Russian software systems and personnel continued to operate.

Azerbaijan follows a similar strategy, occasionally dramatizing its disagreements with Moscow to project strategic independence while maintaining practical cooperation. As Aliyev stated during his meeting with Putin in Dushanbe, despite the December plane incident, the “relationship has successfully developed across many areas,” which Putin hoped would “continue in the spirit of our alliance.” Despite symbolic disputes, Baku and Moscow continue to collaborate in energy, transport, and security, including through the “3+3” regional platform and trilateral projects involving Russia, Turkey, Azerbaijan, and Iran. These selective displays do not mean that all tensions are artificial or coordinated. Real disagreements remain, such as over Moscow’s security obligations to Armenia or the oil contamination scandal involving Russian exports passing through Azerbaijani infrastructure to the EU, but Pashinyan and Aliyev rarely cross Moscow’s strategic boundaries. Thus, what appears as instability often serves to renegotiate hierarchies rather than to overturn them.

For Moscow, this managed ambiguity remains advantageous. By allowing limited dissent and some visible distance, Russia maintains its regional influence while appearing less intrusive, “being present by seeming absent.” This recently adopted strategy enables Putin to exercise influence without attracting too much Western attention. From Moscow’s viewpoint, even Western-backed initiatives such as the August 8 Armenia–Azerbaijan Trump Route for International Peace and Prosperity (TRIPP) infrastructure deal are not viewed as threatening. Instead, TRIPP is seen as fitting into Russia’s wider connectivity strategy, linking Russia and Turkey through Azerbaijan, similar to how the North–South corridor connects Russia and Iran. The Kremlin’s reasoning assumes that regional realities, codified by the November 9, 2020, trilateral agreement, will eventually force Washington either to cooperate with Moscow or to withdraw from the project.

For Yerevan, adopting a “region-first” policy means engaging with Russia, Azerbaijan, Turkey, and Iran, even while maintaining pro-Western rhetoric. The March 2025 parliamentary resolution to start EU membership talks serves mostly performative and domestic aims rather than indicating a real policy shift. The Pashinyan government continues to emphasize the advantages of the Eurasian Economic Union and has applied to join the SCO, showing how Western-oriented language coexists with lasting non-Western partnerships.

Moscow’s acceptance of this balancing comes from its belief that Pashinyan’s EU-focused gestures do not present a real threat. This explains the Kremlin’s restrained reaction to events such as the arrest of Russian-Armenian businessman Samvel Karapetyan, who has fallen out of favor in Putin’s circles. Putin does not oppose either Pashinyan or Aliyev; rather, he views both as cooperative actors within Russia’s changing regional strategy. This approach is reflected in the Kremlin’s “warm neutrality,” expressed by Matviyenko toward Pashinyan before Armenia’s elections, and in Putin’s calculated revelation at the Dushanbe summit about Ramiz Mehtiyev’s planned coup against Aliyev. 

CONCLUSIONS: At this stage, Armenia–Russia relations highlight the growing gap between outward perception and internal reality in the region. To Western observers, Armenia’s pursuit of European integration and broader multilateral ties may seem like a gradual move away from Moscow’s sphere of influence. Yet beneath this surface lies a more complex and regionally rooted dynamic. It suggests that the Kremlin is rethinking its approach in the South Caucasus, developing a coordinated and flexible form of engagement with both Armenia and Azerbaijan that hides the full extent of Russian influence while strengthening the illusion that Russia is withdrawing. This adjustment gives all three actors subtle room to maneuver, allowing for a shared strategy of cooperative dominance and geopolitical maskirovka.

AUTHOR’S BIO: Dr Eduard Abrahamyan is a Senior Research Fellow at the Institute for Security Analysis and author of Small States, Russia and the West: Polarity, Constellations and Heterogeneity in the Geopolitics of the Caucasus (Routledge, 2025).

By Vali Kaleji

March 28, 2024

The development of military and defense relations between Azerbaijan and Pakistan and Armenia and India is an important consequence of the political arrangement and the balance of forces after the Second Karabakh War. However, Pakistan’s non-recognition of Israel has prevented Baku from forming a “quadruple alliance” with its three strategic allies, including Turkey, Israel and Pakistan. Armenia, after defeat in the war and amid dissatisfaction with its traditional ally Russia and the Collective Security Treaty Organization (CSTO), views India, France and Iran as new strategic options, however, Iran prefers Armenia to maintain its traditional and strategic relations with Russia. The tripartite cooperation between Armenia, Iran and India focus efforts on “soft balancing” (economic-transit) instead of “hard balancing” (military-security), against the tripartite ties of Azerbaijan, Turkey and Pakistan in the South Caucasus.

By Intigam Mamedov

March 21, 2024

On February 13, 2024, a new border skirmish took place between Armenia and Azerbaijan, months after Baku regained its territories in Nagorno-Karabakh. While the sides accuse each other of provocations, such incidents could also lead to larger clashes. While a peace deal is needed in order to put an end to the decades-long conflict, reaching an agreement will take time. Meanwhile, to encourage it, both states should now focus on trust-building initiatives, particularly in the humanitarian, economic, and environmental areas. Such short-term initiatives have the potential to assist and stimulate the evolution of new narratives on peaceful coexistence – a challenging but vital task for current and future generations.

By Mehmet Fatih Oztarsu

February 27, 2024

Armenian Prime Minister Nikol Pashinyan seeks a new path forward following Azerbaijan’s seizure of Nagorno-Karabakh and the radical shift in regional dynamics in the South Caucasus. His initiatives aim to revitalize Armenia and resolve longstanding issues, forging a new regional posture. However, domestic divisions and external challenges complicate his efforts. Azerbaijan has not responded to his calls for alternative cooperation while he remains skeptical of Azerbaijan’s overtures. Therefore, Pashinyan prefers to deal with Armenia’s domestic priorities and move carefully towards regional cooperation.