By Albert Najaryan
In recent years, Iran’s internal political tensions and external pressures have become a concern not just for the Middle East, but for the world. For Armenia, a small country seeking economic strength and security in a rapidly changing region, developments in neighbouring Iran remain very important. Whether it’s economic cooperation or securing the border, or figuring out Armenia’s place between East and West, the effects of Iran’s situation should be seen as both direct and strategic for Armenia.
Economic Cooperation and Trade
The trade between Iran and Armenia is continuing to expand based on available statistics. In 2024, the trade between the countries reached approximately $737.4 million, representing almost 6.5% growth compared to the previous year. This shows the highest volume of trade between Iran and Armenia in at least five years and demonstrates a strong growth trend which both governments desire to continue.
While there has been no official timeframe for the development of this relationship, Iranian and Armenian officials have both expressed hopes of increasing this overall volume even more. They believe it could potentially reach $1 billion and, in the most optimistic projections, $3 billion. But this would require improvements in infrastructure and access to markets. For Armenia, these numbers are not trivial as the gross domestic product (GDP) is estimated to be between $14–15 billion, therefore, the trade opportunities with a neighbouring country in excess of $1 billion represent a major trading partner, even if Armenia is importing more than it is exporting from Iran.
In addition to these increases in volume, the trade relationship is becoming more complex, because tariffs on a significant portion of goods traded between Iran and Armenia are reduced through mutual agreements under the EAEU’s ( Eurasian Economic Union ) special trade framework. So, this may result in more trade in various product categories that both countries are interested in, such as agricultural goods, construction materials, metals, and energy.
Security and Border Considerations
Iran’s geopolitical situation is tense and complicated. This tension exists both within Iran and in its relations with other nations. The United States and Iran are more likely to become more involved in conflict with each other or with their allies because of increased criticism of Iran’s nuclear program and ongoing disagreements. If U.S.-Iranian tensions increase and lead to larger military conflicts, such as airstrikes, proxy wars, or activity that causes instability in nearby countries, a small country like Armenia will suffer because it is located next to a region of conflict.
It’s not just a possibility, it’s likely. Armenia is 44 kilometers away from Iran and these two countries have worked together in the past. For example, Armenia and Iran have participated in joint border security drills and have worked together to address terrorist threats. If Iran becomes unstable, it’s hard to predict how this will affect border security between Iran and Armenia. Also, if there are major military operations along Armenia’s southern border (with Iran) or near it, Armenia will have to use more security resources there which in turn will cause other problems in Armenia.
At the same time, Armenia is under pressure on its eastern border with Azerbaijan because of violations of the ceasefire. These violations are with Baku, and they create a potential strategic problem for Armenia. If the border between Iran and Armenia is unstable, it will put pressure on Armenia’s diplomatic and military resources, and will make it hard for Armenia to make concessions and will probably force it to use its limited security resources at a critical time.
Migration and Human Security Issues
If Iran experiences widespread internal problems, economic collapse, or military conflicts from other countries, there is a high chance that people will want to move from one part of the country to another. Historically, large-scale migration occurs when the borders and country become unsafe and people have to leave. Armenia faces two challenges here. First, it must act responsibly to help people in need. Second, it must be able to integrate a large number of people into Armenian society.
However, in such a scenario Armenia faces big issues. Due to limited resources Armenia will not be able to accept many refugees and to adequately support them. The country’s healthcare system, housing, and public finances are already struggling because of Armenia’s ongoing security commitments and the fact that the economy is still recovering from the pandemic. So, the possible arrival of hundreds of thousands of refugees from Iran would put pressure on Armenian society in ways that go beyond economics. This could lead to social tensions at home and even more competition for jobs. It could also make it harder for the country to recover from the pandemic and post-war reality.
Strategic Transit Routes and the TRIPP Corridor
In 2025, regional transit corridors were the most important topic in discussions about Armenian policy. One example of this new geopolitical strategy is the “Trump Route for International Peace and Prosperity” (TRIPP). The United States created this regional transit corridor that connects Azerbaijan to its Nakhchivan exclave via southern Armenia.
The corridor creates economic opportunities for Armenia by connecting the country to important trade routes between East and West and North and South. However, it also creates geopolitical and geoeconomic risks for Armenia’s relationship with Iran and Russia. For example, Tehran is worried that a Western-supported TRIPP transit corridor would reduce its influence in the region and make it harder for Tehran to access trade routes through Armenia. In large spectre, the escalated situation with US and Israel and Tehran’s safety concerns are also something that should be taken into consideration.
If Iran becomes unstable or its role in the South Caucasus transit infrastructure becomes uncertain, Armenia may find itself between competing transit corridors, with conflicting foreign support for each, and with the need to address domestic economic and safety issues associated with the transit corridors.
Conclusion
Iran is crucial for Armenia’s future economy, safety, and migration dynamics, and position in the world. It is very important for the leaders of Armenia to cooperate with Iran in the economic sphere and to improve both trade and the logistics, but it is also important to implement a strategy for the future diversification to make the economy more varied. This will make Armenia’s economy stronger and will help to work better with other countries.
Armenia should find a balance between being involved with Iran and building strong relationships with the EU, the US, Russia and other countries in the region. This approach will help Armenia protect its own interests. This is not only a good plan, but it’s also necessary to keep the nation safe and stable in a very changing area where the lines of economic and political power are constantly shifting.
About the author
Albert Najaryan is a political analyst and researcher focused on democratization, governance, and regional security in the South Caucasus and Eastern Europe. He holds a Master’s degree in Human Rights and Democratization.
