Iran and Armenia ink major energy cooperation deal
Yerevan, Armenia/Tehran, Iran/London-UK, November 28, 2025
CAUCASUS POWER PLAY:
Tehran and Yerevan Sign 20-Year Gas-for-Electricity Extension, Bolstering Armenia’s Sovereignty Against Zangezur Corridor Pressure
In a major geopolitical manoeuvre that is set to redraw the strategic energy map of the South Caucasus, Iran and Armenia Ink Deal on Energy Cooperation that has direct, powerful implications for the ongoing Azeri Regional Tensions in the region.
The agreement, signed in the final week of November, is a significant expansion of the existing “gas for electricity” swap and locks in a critical strategic partnership between Tehran and Yerevan for the next two decades.
By boosting Armenia’s energy security and strengthening the north-south economic corridor, the deal serves as a direct, practical counterweight to Azerbaijan’s territorial demands and its attempts—backed by Turkey—to economically isolate Armenia.
The agreement fundamentally overhauls and extends the original 2004 arrangement, which saw Iran export natural gas to Armenia, where it is converted into electricity, with a portion of that power then returned to Iran.
The new terms are dramatic: the term of the agreement is extended from its previous deadline to 2046, and the volume of gas Iran will supply is significantly increased—enough to meet a substantial portion of Armenia’s industrial and residential energy needs.
This move allows Armenia to further diversify its energy supply, gradually reducing its heavy reliance on Russian gas delivered through Georgia, a strategic necessity given the shifting loyalties in the post-Nagorno-Karabakh conflict landscape.
The geopolitical timing is no coincidence. This deal is aimed squarely at undermining the pressure being applied by Azerbaijan to force Armenia to concede the so-called “Zangezur Corridor.”
This proposed corridor, promoted by Baku and Ankara, would grant Azerbaijan extraterritorial control over a transport route running through Armenia’s southern Syunik Province to connect Azerbaijan with its exclave, Nakhchivan.
Critically, Syunik Province is the only land border Armenia shares with Iran. By securing a long-term, high-volume energy artery with Iran, Armenia is effectively cementing its southern sovereignty and demonstrating to the world that it possesses a viable, sovereign route for energy and trade that cannot be dictated by its neighbours.
Tehran has vocally supported Yerevan on this matter, with Iran’s leadership previously stating that any move to close the border with Armenia is a “red line” that would destabilize the entire region.
The agreement also lays the groundwork for Armenia to become a crucial energy transit hub between Iran and Europe.
Discussions have been accelerated regarding the construction of a third high-voltage power transmission line connecting the two countries, significantly increasing the capacity for electricity exchange.
Furthermore, this enhanced connectivity opens the door for Armenia to export Iranian energy onward to Georgia, and potentially beyond to the Black Sea region and the broader European market.
This realization of a powerful North-South corridor directly challenges the Turkish-Azerbaijani vision of an exclusively East-West corridor running through Azerbaijan.
Initial reactions from Baku and Ankara have been predictably cool, with Turkish media outlets accusing Yerevan of deliberately raising tensions and politicizing energy cooperation.
However, the deal presents a fait accompli that fundamentally shifts the negotiating dynamics in the Caucasus. It provides Armenia with a vital economic shield, making the country less vulnerable to blockade threats or economic coercion.
For the London-UK based CJ Global, the Iranian-Armenian alignment represents a classic geopolitical checkmate, where strategic economic ties are being used to safeguard national sovereignty against larger regional powers.
The deal is a clear sign that, despite its isolation from the West, Iran remains a highly influential player capable of impacting regional security, with the power lines now serving as the new front lines in the enduring Caucasus rivalry.
Headline Points
20-Year Extension:
Iran and Armenia signed a major expansion of their “gas for electricity” swap agreement, extending the term to 2046 and significantly increasing the volume of Iranian gas supplied.
Geopolitical Counter:
The deal is a direct strategic move against Azerbaijan’s pressure to open the Zangezur Corridor through Armenia’s Syunik province, securing Armenia’s vital border with Iran.
Energy Security:
The agreement reduces Armenia’s historical reliance on Russian gas, allowing Yerevan to diversify its energy sources and bolster its economic stability.
Regional Hub:
The deal includes plans for a third power transmission line, positioning Armenia as a potential key energy transit hub for Iranian power to Georgia and potentially the wider European market.
Sovereignty Shield:
Tehran’s commitment serves as a crucial economic and strategic lifeline, reinforcing Armenia’s territorial integrity against regional threats and power plays.
