CAIRO – Amid rapid shifts in the global and regional order, Iranian President Masoud Pezeshkian’s recent visit to Baku—marked by strategic agreements and assertive political statements—signals a recalibrated Iranian strategy aimed at redefining its geopolitical and economic role in its immediate neighborhood.

The visit also aimed to mend previously strained ties with Azerbaijan. Described by presidential advisor Mehdi Sanaei as having achieved “significant accomplishments,” particularly in fostering political trust, the visit is far more than a ceremonial gesture. It reflects Iran’s shift from tactical engagement to the formation of long-term strategic alliances rooted in solid economic and security foundations—alliances that could redraw Iran’s regional influence during a delicate and transitional period.

A centerpiece of the visit was the preliminary agreement to draft a “Comprehensive Strategic Cooperation Document” between Iran and Azerbaijan. This step, typically reserved for nations with deep-rooted or strategic alliances, signals Iran’s serious intent to build a robust regional axis with Baku. This drive is fueled by the shared need for stability, mutual economic interests, and the alignment of political perspectives to counter international and regional pressures.

Iran’s growing interest in economic and developmental dimensions of foreign policy was underscored by Sanaei’s comments on major regional initiatives, notably the International North-South Transport Corridor (INSTC). Linking Russia to Azerbaijan and Iran down to India and the Indian Ocean, this project offers Tehran a strategic opportunity to become a global transit hub for goods and energy. It is also a potential pathway to bypass Western sanctions and unlock vast economic prospects through enhanced trade ties with major powers like Russia, India, and China—solidifying Iran’s role as a regional node for energy transfer and global trade.

Another strategic highlight is the proposed export of Russian gas through Iranian territory via Azerbaijan. The initiative shows Tehran’s intent to capitalize on the ongoing Russia-Europe energy standoff by positioning itself as a viable alternative transit route. This would elevate Iran’s strategic standing and strengthen its bargaining power in both regional and international arenas. In turn, the project would not only serve Russia’s energy export interests but also expand Iran’s influence in the Caucasus, Europe, and Central Asia—casting it as a vital intermediary in the global energy chessboard.

The Iran-Azerbaijan-Russia electricity linkage is another milestone. It signals a strategic turn toward regional energy integration. For Iran, grappling with Western-imposed economic constraints, the project presents an opportunity to break out of isolation, forge mutual interests with neighboring states, and generate direct economic gains—while boosting Tehran’s strategic agility in the region.

In the field of telecommunications and IT, the agreement between Iran’s Telecommunications Company and Azerbaijan’s Delta company is a significant step. It targets the development of telecom infrastructure and undersea cables across Iran, clearly positioning the country as a regional data hub between East and West. This move represents a concrete application of Iran’s “technology diplomacy,” which treats tech not merely as an economic asset but as a strategic tool for boosting geopolitical influence.

Importantly, this initiative is not confined to bilateral gains for Iran and Azerbaijan; it also stands to benefit neighboring countries like Afghanistan, Turkmenistan, and Pakistan—enhancing Iran’s status as a regional and international connectivity hub. Control over digital traffic routes offers Tehran immense economic and strategic leverage and could reposition it within global logistics and supply chains.

President Pezeshkian’s statements during a joint press conference with Azerbaijani counterpart Ilham Aliyev emphasized the two nations’ historical and cultural bonds as a foundation for strategic cooperation. He underlined the capacity of both countries to address regional challenges and establish peace—a clear diplomatic signal of Iran’s desire to de-escalate tensions and usher in a new era of mutual trust and collaboration with Baku.

The president also stressed the need to develop financial and trade ties as a strategic necessity, reflecting Iran’s recognition that regional economic integration is essential to sustaining security—especially in a region pressured by competing global powers, notably the U.S., Russia, and China.

Iran also views deepened military and security cooperation with Azerbaijan as a strategic imperative, particularly in the face of increasing tensions in the Caucasus, including flare-ups between Armenia and Azerbaijan and broader great-power competition. Military collaboration could act as a bulwark against foreign interference and reinforce regional stability.

Economically, both nations aim to leverage their industrial and commercial complementarities. Pezeshkian highlighted the importance of collaboration between producers, fostering joint ventures, knowledge exchange, and the creation of new markets. This reflects a long-term vision of integration that could help Iran weather Western sanctions and build resilient economic partnerships.

All these developments come as Tehran seeks to redefine its regional image—pivoting toward cooperation with neighboring Muslim states. Pezeshkian’s emphasis on Islamic solidarity, mutual respect for territorial integrity, and regional dialogue reflects Iran’s attempt to present itself as a responsible partner and not a hegemonic actor, contrary to narratives promoted by its adversaries.

However, Iran’s strategic vision still faces significant challenges. Successful implementation of these projects depends on sustained political stability with Azerbaijan, careful navigation of great-power rivalries, and securing regional compromises that satisfy multiple stakeholders.

One particularly sensitive issue is Baku’s close ties with Israel—a dynamic of major strategic concern for Tehran. Azerbaijan, a Shia-majority nation, is among Israel’s closest allies in the Muslim world, supplying roughly 50% of Israel’s oil while receiving about 70% of its arms from Tel Aviv. This robust cooperation, spanning defense, energy, and technology, deeply worries Iran, which views it as a direct threat to national security.

The trilateral dynamic involving the U.S., Israel, and Azerbaijan adds further complexity. Tehran sees this as a mounting pressure tactic aimed at its northern front. Despite Baku’s insistence that its Israeli ties are not aimed at any neighbor, Iran’s apprehensions are legitimate—especially amid concerns that Azerbaijani territory could be used for intelligence operations targeting Iran. This situation demands open and transparent diplomacy between Tehran and Baku to defuse tensions and establish mutual security guarantees.

Given these considerations, Tehran understands the importance of stable, balanced ties with Azerbaijan—particularly in light of the positive trajectory seen during Pezeshkian’s visit and the signed strategic agreements. Shared economic, technological, and energy interests offer both countries a path toward deeper trust and more effective crisis management, especially in light of Baku’s ties with Israel.

A commitment to mutual non-interference and transparency with third parties could provide the stable foundation needed for lasting regional cooperation. Iran is also bolstering its presence in the Caucasus by strengthening ties with Russia and Armenia, aiming to establish a broader regional network that can temper rivalries and support comprehensive regional consensus.

In conclusion, President Pezeshkian’s visit to Baku and the resulting agreements signal a new strategic phase for Iran—one grounded in regional integration through economic, technological, and energy cooperation. This realignment could substantially reshape regional power dynamics and help Tehran navigate both internal challenges and external pressures in the near future.