Turkey's Expanding Role in the South Caucasus: Diplomacy, Trade, and Rivalry

Turkey views the South Caucasus as a critical bridge linking it to Central Asia, a region it considers central to its commercial and geopolitical expansion. According to Turkey's Ministry of Foreign Affairs, Ankara maintains deep-rooted historical and cultural ties with the region and treats it as a corridor for projecting influence eastward. Carnegie Endowment analysts note that Turkey's first strategic objective in its neighborhood is to expand the trading and investment activities of Turkish companies in Central Asia, making the South Caucasus an indispensable transit zone.

The Carnegie Endowment also highlights Turkey's role as a key transit hub for Caspian energy to Europe and a pivotal bridge between the South Caucasus, Central Asia, and the West - a position that gives Ankara considerable leverage with both regional actors and Western partners. This structural importance has made Turkey a player that neither the EU nor Russia can afford to ignore.

Efforts to normalize Armenia-Turkey relations have a long and troubled history. Armenian Weekly notes that significant attempts at normalization were made as far back as 2008, but those efforts ultimately collapsed. The 2020 Nagorno-Karabakh war created a new opening, with ECFR observing that the conflict produced an unexpected opportunity for the two sides to recalibrate their relationship.

As of mid-2026, both sides are signaling cautious optimism. Turkish Foreign Minister Hakan Fidan stated that significant progress has been achieved in the normalization process, as reported by both Asbarez and Public Radio of Armenia. Armenian Prime Minister Nikol Pashinyan has framed normalization with Turkey and Azerbaijan as key to completing Armenia's broader foreign policy goals, according to Turkish Minute. A concrete economic step was taken when direct trade arrangements, taking effect on 11 May 2026, abolished a restriction in place for three decades, as detailed by Future UAE.

A persistent complication is the role of Azerbaijan. JAMnews notes that while Turkey recognized Armenian independence in 1991, diplomatic relations have never been established, and Baku's influence over Ankara has been a recurring obstacle. Armenia's parliamentary speaker has gone further, stating that Azerbaijan is actively hindering the normalization process through its political influence over Turkey, as reported by CivilNet.

The Turkey-Azerbaijan relationship is characterized by USC Dornsife as one of mutual support and shared interests - a dynamic that gives Baku significant informal veto power over the pace and scope of any Armenian-Turkish rapprochement. This structural dependency means Ankara must balance its own normalization interests against the preferences of its closest regional ally.

Turkey's growing role in the South Caucasus unfolds against a backdrop of intensifying great-power competition. International Crisis Group documents that Russian and Turkish interests collide in the South Caucasus, with Moscow and Ankara having backed opposing sides in the Armenia-Azerbaijan conflict. The decline of Russian influence in the region, according to CATS Network, means Moscow must now incentivize Turkey to limit Western access and reach - a dynamic that gives Ankara room to maneuver between blocs.

Iran adds another layer of complexity. SWP Berlin describes the South Caucasus as a long-standing theatre of Turkish-Iranian cooperation and rivalry, with both powers historically balancing their competing interests in the region. Meanwhile, the EU increasingly views Turkey as an indispensable partner: Carnegie Endowment argues that Brussels needs Ankara's engagement in the South Caucasus to secure energy transit routes and counter Russian influence.