Azerbaijan

Azerbaijan has a roughly one-in-three chance of direct involvement in significant armed conflict within the next three years, driven mainly by residual Armenia-border risks and Iran/Russia-related spillover, but constrained by strong deterrence, economic incentives for connectivity, and active diplomatic firebreaks.

Most likely: continued Armenia normalization with periodic border accusations and low-casualty incidents, managed through mediation and deterrence. Elevated watch items are border delimitation frictions, transit/corridor implementation disputes, and Iran-related regional shocks. A deliberate large offensive is unlikely; the nearer-term risk is a short, contained clash from miscalculation.

If connectivity projects and a signed/implemented peace framework consolidate, conflict risk can trend down. If Armenia’s rearmament, domestic politics, or unresolved narratives harden positions, the region could revert to coercive bargaining with episodic fighting. Iran’s trajectory remains the biggest exogenous swing factor; a major Iran crisis could raise Azerbaijan’s direct exposure regardless of the Armenia track.

Net assessment Risk = persistent threat drivers minus (state resilience + systemic firebreaks). Azerbaijan’s most plausible conflict pathways are limited interstate clashes rather than large-scale war.

Threat drivers Armenia-Azerbaijan: Even with a U.S.-mediated process and reported de-escalatory assessments from Armenian intelligence for 2026, the peace architecture remains incomplete and vulnerable to spoilers. The highest-risk mechanism is localized escalation along an undelimited/contested border or disputes over transit/connectivity implementation, where tactical incidents can become politically hard to de-escalate. Iran vector: Azerbaijan’s geography, ethnic-Azeri sensitivities in Iran, and competition over regional corridors create a standing coercion risk. Escalation is more likely via intimidation, border shows of force, or proxy/hybrid activity than deliberate invasion, but a regional Iran crisis could still pull Baku into kinetic exchanges. Russia vector: Azerbaijan’s balancing strategy faces stress from Russia’s broader confrontation with the West. Reported strikes affecting Azerbaijani assets in Ukraine illustrate potential for coercive signaling and miscalculation, though Baku’s response posture appears deliberately diplomatic.

Resilience and capacity Azerbaijan has high coercive capacity and internal control: a modernized force, strong security services, and fiscal space from energy revenues. These reduce vulnerability to internal armed challenge and raise the threshold for adversaries to attempt coercion.

Systemic firebreaks Economic interdependence and connectivity incentives (trade/transit openings) increase the opportunity cost of renewed war. Multi-vector diplomacy and external mediation channels (notably U.S. engagement) provide off-ramps. Turkey’s close security partnership strengthens deterrence, while also incentivizing Baku to avoid uncontrolled escalation that could endanger energy/export corridors.

Judgment Compared to 2020–2023, the baseline is less war-prone, but not yet structurally “locked.” The modal outcome is tense peace with episodic incidents; the tail risk is a short, sharp interstate clash triggered by border or regional spillover dynamics.