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As the Soviet Union imploded in the late 1980s and early 1990s, violence between these two peoples spun out of control as they that belonged to the Azerbaijan Soviet Socialist Republic. 

As two newly independent countries, Armenia and Azerbaijan fought a war from 1991 to 1994 over this landlocked mountainous enclave, which resulted in .

Signed in May 1994, the Russian-brokered Bishkek Protocol turned the war into a mostly "frozen conflict" that would unfreeze with episodes of violence between Armenia and Azerbaijan, such as the  of April 2016.

Yet since 27 September, the areas near and in Nagorno-Karabakh have experienced by far the of the past 26 years. Two weeks of warfare involving kamikaze drones, ballistic missiles, and indiscriminate rocket artillery have already taken several hundred lives. 

"The lesson of the latest Caucasus flare-up is that disputes cannot be allowed to fester," explained Shireen Hunter, an affiliate fellow at the Georgetown University Center for Muslim-Christian Understanding. "No conflict remains permanently frozen."

Sharing borders with Armenia and Azerbaijan, Iran is a major stakeholder in the conflict

The of 9 October, in which Armenia and Azerbaijan accused each other of failing to comply only hours after it went into effect, suggests that this conflict risks further escalation.

Experts are raising the alarm about possible ethnic cleansing in Nagorno-Karabakh and warning that the crisis could draw in more superpowers, while friction between Turkey and Russia remains hot. 

Enter Iran

Sharing borders with Armenia and Azerbaijan, Iran is a major stakeholder in the conflict. Tehran has vested national security and geopolitical interests in its outcome. In fact, the fighting has already  into Iranian villages, making it a crisis that the Islamic Republic cannot ignore. 

Since 27 September, the Iranian government's response has been careful and strategically ambivalent. During the 1991-1994 war, Tehran embraced a "hands off" approach which mostly worked well for Iran. The 'status quo' from May 1994 until last month is what the Islamic Republic would like reinstated - at least to the maximum extent possible.  

Yet if the fighting near and in Nagorno-Karabakh spirals out of control, Iran will have an increasingly messy dilemma on its border. Needless to say, as the US administration's "maximum pressure" and the global Covid-19 pandemic have already significantly weakened Iran, any such escalation of this armed conflict will pose an increasingly dire crisis for Tehran. 

Since the fight between Azerbaijanis and Armenians in and near Nagorno-Karabakh restarted last month, Iran's President Hassan Rouhani has urged the parties to freeze their fighting. He also expressed his willingness and readiness to mediate between Baku and Yerevan. 

Iran's internal politics contribute to the multitude of factors which make the Nagorno-Karabakh crisis a major challenge for Tehran

"The region cannot sustain further violence,"  the Iranian foreign ministry's spokesperson on 28 September. "Iran's policy has not changed, but always been oriented towards facilitating talks between the two sides as the use of military force is not a sustainable solution to this decades-old dispute." The spokesperson went further,  that Tehran "will not by any means tolerate violation of its borders and territory."

Separatist elements and geopolitics

Iran's internal politics contribute to the multitude of factors which make the Nagorno-Karabakh crisis a major challenge for Tehran. Within the Islamic Republic, there are different views on the conflict. In parts of Iran which are home to large Turkish and Azeri populations such as West Azerbaijan, East Azerbaijan, Ardebil, and Zanjan, there is support for Baku's struggle to "liberate" Nagorno-Karabakh from the Armenian "occupation". 

In fact, representatives of the Iranian Supreme Leader Ayatollah Ali Khamenei in these provinces have expressed their pro-Azerbaijan positions. The Iranian Supreme Leader's advisor, Ali Akbar Velayati, has also  support for ending the Armenian "occupation" by citing four UN Security Council resolutions.

Notwithstanding certain ways in which Tehran rhetorically defends Azerbaijan's territorial integrity, Iran has a pro-Armenia stance. Ultimately, Iran has major security and geopolitical concerns about what it could lose from Turkey- and Israel-backed Azerbaijan "liberating" this Armenian-controlled territory. 

Firstly, if Baku were to take control of Nagorno-Karabakh, it is safe to bet that such an outcome would give a major morale boost to in northwestern Iran. After all, there are more ethnic Azeris in Iran (where they make up 25 percent of the national population) than in Azerbaijan. 

For years, many members of this minority group in Iran have looked to Baku with envy, dreaming of breaking away from the Islamic Republic's rule. Already, the Iranian government has cracked down on activism in various northwestern cities, including Ardebli, Tabriz, Urmia, and Zanjan. 

Iran's threat perceptions also pertain heavily to regional variables. An Azerbaijani "victory" in Nagorno-Karabakh would make Tehran feel more vulnerable to Israel. This perspective is informed by a decades-old history of in which Tel Aviv has taken advantage of Azerbaijan's geographic location along Iran's northern border for the Israelis to acquire more intelligence on the Islamic Republic.

Israel is not the only anti-Iranian actor involved in the fighting in and near Nagorno-Karabakh which concerns Tehran. Like Turkey did in Libya, Ankara has deployed Turkish-backed Syrian rebels to help Baku "liberate" the disputed enclave. From the Iranian government's perspective, this amounts to Turkey adding fuel to the fire. On 7 October, Rouhani declared that it was "unacceptable for us that some [states] use excuses to transfer terrorists from Syria and other locations to the region and areas near our borders." 

As the conflict threatens to increase tensions between Russia and Turkey, Iran must tread carefully

Internationally, the Russia factor is also key to understanding Iran's pro-Armenia stance. Amid the continuation of the Trump administration's "maximum pressure" campaign against Tehran, Iran is bending over backwards to cater to Russia.

Notable is the fact that Moscow-Tehran relations are at an all-time high as demonstrated by Deputy Defence Minister Alexander Fomin  to Iran as Russia's "ally" (as opposed to mere "partner") last month. 

In recent days, Tehran has praised Russia's defence of the Joint Comprehensive Plan of Action (JCPOA) while Moscow has commended Iran for complying with the IAEA. With Tehran taking a position on the Nagorno-Karabakh crisis that backs Moscow's, this is a new opportunity for Iran to further strengthen bilateral relations with Russia. 

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A delicate balance from Tehran 

Yet as the conflict threatens to increase tensions between Russia and Turkey, Iran must tread carefully. Although close relations with Moscow are important to Tehran, Iran's leadership also wants to avoid excessively angering Turkey.

Iran realises it cannot afford a conflict with Turkey, especially given how easily that could trigger a direct conflict with the US. Turkey too is an important neighbour that Iran relies on in many domains while coping with "maximum pressure".

Seeking to maintain excellent relations with Russia without entering into hostilities with Turkey, Iran faces a major dilemma vis-à-vis the Armenia-Azerbaijan conflict. At a time in which Ankara feels confident and strong following Turkish military successes in Libya, which turned the tide against the Russian-backed General Khalifa Haftar, Turkey is now flexing its muscles in Transcaucasia - traditionally understood to be Russia's "backyard". 

Like Moscow, Tehran is in many ways extremely uneasy with a Turkish intervention in the fight for Nagorno-Karabakh increasing the prospects for Baku achieving the victory that Azerbaijan failed to achieve in 1994. Such an outcome would end the tense peace between Yerevan and Baku that generally served Iranian interests quite well for the past 26 years. 

The regime in Tehran could easily find itself dealing with growing instability within its own borders and in the region too if diplomatic efforts fail to finally resolve the Nagorno-Karabakh conflict. Ravaged by the pandemic and struggling to survive under crippling US sanctions and pressure, the conflict between Iran's two northern neighbours could not come at a worse time for the Islamic Republic.

Giorgio Cafiero is the CEO of ,  a Washington, DC-based geopolitical risk consultancy. 

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