US President Donald Trump's efforts to resolve the territorial dispute between Armenia and Azerbaijan over Nagorno-Karabakh could redraw the geopolitical map of the South Caucasus region, benefitting American companies and weakening Russia’s influence.
Armenian Prime Minister Nikol Pashinyan and Azerbaijan President Ilham Aliyev initiated in Washington on August 8 steps towards a peace agreement to end their long-standing dispute. They agreed to refrain from enforcing territorial claims and recognized each other's territorial integrity.
"Thirty-five years they fought, and now they're friends and they're going to be friends for a long time," Trump said at the meeting. President Aliyev and Prime Minister Pashinyan described the results as "historic" when they cemented their handshake with Trump.
The peace initiative could restructure the geopolitical balance of power in the South Caucasus. For more than a century, Moscow has maintained political influence in the region. Iran has had strong cultural and political interests in the region.
"The meeting and declaration sent needed signals to Russia, Iran, and other regional players," Robert F. Cekuta, former US Ambassador to Azerbaijan, and Richard L. Morningstar, founding chairman of Global Energy Center, wrote for the Atlantic Council. "The US is now in a position to play a critical role in the South Caucasus to help develop the region economically."
ExxonMobil XOM signed a deal with Azerbaijan's state-run oil company, SOCAR, on the sidelines of the negotiations. The agreement has a "high probability of discovering a major oil field," Aliyev said.
Russia Warns of External Influence
Russian Foreign Ministry spokesperson Maria Zakharova expressed nominal support for a "zone of stability and prosperity" in the region. She said that conflicts in the South Caucasus should be settled by regional powers — specifically Turkey, Iran, and Russia — and not by external actors, such as the US.
"This reflects Moscow's growing anxiety at being sidelined in a region it has long considered within its sphere of influence," Richard Connolly, a senior analyst at Oxford Analytica, wrote on Thursday. "Moscow, historically the principal power broker in Armenia-Azerbaijan relations, has emerged as another dissatisfied party."
Trump and Russian President Vladimir Putin are scheduled to meet today in Anchorage, Alaska. They will discuss a potential ceasefire in the Russia-Ukraine war, not Trump's peace efforts between Armenia and Azerbaijan.
The European Union (EU) welcomed the results of the trilateral talks. The Council of the EU added that the bloc would "work with partners towards full-fledged normalization."
Trump's Initiative Could Benefit US Companies
As a part of the agreement, the US will provide infrastructural assistance to build a transit corridor, termed "Trump Route for International Peace and Prosperity" (TRIPP). Trump's role in bringing the two nations together could open up new opportunities for US companies.
The proposed corridor, also known as the "Zangezur Corridor" in Azerbaijan, will connect Azerbaijan and its exclave, Nakhchivan, via Armenia's Syunik Province. Azerbaijan has been pushing its Zangezur Corridor for years. Armenia has resisted the route.
Now, Armenia has agreed to grant the US exclusive development rights for 99 years. The US would then sublease it to a consortium, developing oil, gas, rail, and fiber optic lines along the 27-mile corridor. The link will connect to the $45 billion Southern Gas Corridor (SGC), which will supply 10% of Europe's gas needs by 2030.
US companies involved in SGC, such as Schlumberger Ltd. SLB, are well-positioned to benefit from this integration. Baker Hughes BKR, Caterpillar Inc. CAT, Cisco Systems CSCO, and General Electric GE could also profit from the exclusive development agreement.
US Presence In Region Raises Iranian Concerns
A US presence in the region has already raised concerns in Iran. Tehran said that it would oppose TRIPP, "with or without Russia."
TRIPP would diminish Iran's economic leverage and strengthen Turkey and Azerbaijan's positions in the wider geo-economic competition in the region.
"From Tehran's perspective, the corridor increases US and Israeli influence along its northern border and enhances Turkey's role in the South Caucasus," Connolly wrote. It could also reduce Iranian revenue from acting as a transit route for Azerbaijani goods.
For China, the US role in the Zangezur Corridor could significantly undercut China's Belt and Road Initiative (BRI).
Russia Loses Influence In Yerevan, Baku
Yerevan and Baku pushed for a US-sponsored solution because of increasingly strained ties with Russia. Their diplomatic turn to the US has sent a strong signal about Russia's ability to ensure a peace settlement.
Russia had tried to resolve the conflict in 2020. Russian President Vladimir Putin signed a trilateral agreement to end the 44-day war between Armenia and Azerbaijan on November 10 that year.
The deal failed to achieve a final peace settlement. Azerbaijan toppled the Armenian-backed de facto government in Nagorno-Karabakh in September 2023.
From that point, Armenia's relations with Russia deteriorated. Yerevan accused Moscow of failing to uphold its alliance commitments and froze its membership in the Collective Security Treaty Organization.
Azerbaijan Turns Against Moscow
Moscow's relationship with Baku has also suffered recently.
Azerbaijan's ties with Moscow deteriorated after the arrest of multiple Azerbaijani citizens in Yekaterinburg, Russia's fourth-largest city, in July 2025. While in detention, they were subject to torture. Two suspects eventually died.
In response, Azerbaijani authorities cancelled all cultural events related to Russia. Authorities raided the Baku office of Russia's Sputnik news agency and detained its employees and several Russian IT specialists.
In the region, Russia went from "from a strategic partner into a problematic ally," Benyamin Poghosyan, chairman of the Center for Political and Economic Strategic Studies in Yerevan, said.
Concerns Exist About Trump's Initiative
Despite the cautious optimism, there are justifiable concerns as to whether Yerevan and Baku concluded a durable peace. Armenia and Azerbaijan have failed to initiate their commitments from the White House summit.
The 44-Day War in late 2020, as well as the Azerbaijani military offense that had led to the collapse of the Yerevan-backed government in Nagorno-Karabakh in 2023, underscore the fragility of diplomatic initiatives.
Aliyev reiterated at the trilateral summit in Washington specific terms for peace. Armenia would have to amend its constitution and remove all references to territorial claims over Nagorno-Karabakh for a peace agreement.
"The US should help Armenians and Azerbaijanis take other necessary steps to realize a real, lasting peace," Cekuta and Morningstar wrote. "This work should include actively engaging Azerbaijanis and Armenians to build personnel connections and promote understanding after nearly four decades of hostility."
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