How the Hamas-Israel war impacts the South Caucasus

By Fuad Shahbazov, Amwaj Media,

The war between Hamas and Israel war has triggered strong anti-Israel sentiments in the region and heightened fears of a broader conflict engulfing actors such as Egypt, Iran, Jordan, Lebanon, and Turkey. Worried that the conflict in Gaza could escalate into a regional confrontation, the US has dispatched two aircraft carrier strike groups within range, including additional troops and military advisors.

But alongside tough rhetoric, the violence in Gaza has renewed apparent pragmatism by important regional states such as Iran and Turkey. Turkish President Recep Tayyip Erdogan has openly slammed Israel’s bombings of the Palestinian coastal enclave. On the other hand, Ankara has avoided issuing direct threats against Tel Aviv and, in an apparent unusual move, allegedly distanced itelf from Hamas in the aftermath of the Palestinian movement’s surprise attack on Israel last month.

Iran and its regional allies such as Lebanese Hezbollah and Yemen’s Ansarullah movement—better known as the Houthis—have adopted more hostile stances. Both Hezbollah and the Houthis have directly attacked Israel. However, Tehran itself has focused on the political track, pushing for Muslim countries to embargo Israel amid its campaign to galvanize anti-Israeli sentiment in the region. The call for an embargo has gained momentum in light of some Muslim countries’ decisions to downgrade ties with Israel—raising fears among some of Israel’s regional partners.

Gaza war puts pressure on Israel’s partners

The mounting criticism of Israel in the region has boosted fears among Tel Aviv’s main Muslim partners, including Azerbaijan. The conflict in Gaza is particularly relevant for Baku, as Tel Aviv’s top energy and military associate in the South Caucasus.

Some 40% of Israel’s oil imports of around 300,000 barrels per day were sourced from Iraqi Kurdistan in the first quarter of 2023. That trade has been halted following Turkey’s decision to stop oil flows through the Kirkuk-Ceyhan pipeline in March over a dispute with Baghdad. To fill the gap, Israel has reportedly turned to African producers and Brazil. Meanwhile, Azerbaijan and Kazakhstan meet more than half of Israel’s demand for oil.

Propelled by military cooperation, the partnership between Azerbaijan and Israel gained a new level of momentum in 2020, when Azerbaijani forces heavily relied on Israeli-made weaponry to regain control over the Nagorno-Karabakh region. Baku continues to rely on such arms to maintain military superiority over Armenia.

Following the recapture of Nagorno-Karabakh, the Baku-Tel Aviv partnership has morphed into a new geopolitical alliance. Important political steps have been taken, such as Azerbaijan’s opening of an embassy in Israel in March. This has raised eyebrows in neighboring Iran, particularly as an attack on the Azerbaijani embassy in Tehran earlier this year led Baku to shutter its diplomatic mission amid broader tensions.

In parallel with strengthening ties with Israel, Azerbaijan has developed strategic partnerships with leading Muslim countries—including Saudi Arabia, Turkey, and the United Arab Emirates. While this is mainly due to Baku’s desire to pursue a balanced foreign policy strategy, Tehran has been wary of the deepening relations between its northwestern neighbor and a widening array of its regional rivals.

Continued cooperation despite pressure

Unlike Azerbaijan, the Christian countries in the South Caucasus—namely Armenia and Georgia—generally do not have strong ties with Muslim states. Armenia’s strong relations with Iran are an exception to this broader trend. Indeed, the ruling Georgian government has strongly criticized the Palestinian surprise attack on Israel. Tbilisi has also expressed its unwavering support for Tel Aviv—largely mirroring the pro-Israeli public sentiments in Georgia.

To avoid possible criticism from Muslim countries, Azerbaijan has denounced the harm inflicted on civilians in the Gaza Strip, underlining its full support for all relevant UN resolutions on the Israeli-Palestinian issue—including the establishment of a Palestinian state alongside a Jewish state. This stance is not new; Azerbaijan has insisted on these principles since the early 1990s. Perhaps surprisingly, this balanced approach has never been a catalyst for tension in the bilateral relationship with Israel.

Amid the fighting in Gaza and Iran’s resulting calls for an embargo on Israel, Baku has continued to maintain a close partnership with Tel Aviv—albeit while keeping a lower profile on the regional stage.

For instance, at the end of October, Azerbaijan reportedly shipped a tanker loaded with over one million barrels of crude oil to Israel’s southern Red Sea port of Eilat. This was after the Ashkelon port on the Mediterranean Sea came under rocket fire from Hamas. Moreover, on Oct. 30, Israel awarded a consortium consisting of BP, NewMed Energy, and the State Oil Company of Azerbaijan Republic (SOCAR) a license to explore offshore natural gas deposits in the Mediterranean. The move notably came shortly after the Israeli government temporarily shut down the Tamar offshore gas field amid rocket attacks launched by Hamas from Gaza.

Looking ahead

The authorities and state media in Azerbaijan have not highlighted the recent significant milestones in the bilateral partnership with Israel for several reasons.

Undoubtedly, Azerbaijan believes that explicit deep engagement with Israel and praise of such an approach in state media amid the ongoing war in Gaza may provoke a reaction from Iran, a staunch supporter of Hamas. Conversely, the Israeli military campaign against Hamas and the ongoing domestic political turmoil in Israel may have geopolitical ramifications, such as a revival of assertive Iranian policy in the South Caucasus.

The bigger picture is that the violence in Gaza is diverting the west’s attention. As a result, regional powers like Iran and Russia may maneuver to fill the vacuum in places like the South Caucasus. To Azerbaijan, the potential strengthening of Iranian influence is hardly a positive factor, particularly amid Baku’s efforts to ink a peace agreement with neighbouring Armenia.

In addition to the regional power dynamics, the Hamas-Israel war puts the Azerbaijani government in an uncomfortable position at home. As recently as Nov. 17, Azerbaijani security forces arrested an armed suspect near the Israeli embassy in Baku who reportedly planned an attack. As a Muslim country, Azerbaijan is expected to demonstrate more profound solidarity with Palestine. However, Baku is—as in the past—acting on the basis of realpolitik, with a focus on relations built on shared interests.

Hence, even though Iran may adopt bellicose rhetoric against Azerbaijan for maintaining strategic ties with Israel amid the Gaza war, it is unlikely that Tehran will deliberately jeopardize its relationship with Baku, which is slowly recovering after years of mounting tensions. The recent diplomatic thaw between Azerbaijan and Iran has renewed the intraregional partnership and paved the way for new forms of cooperation, such as a new transit route linking Azerbaijan with its Nakhchivan exclave via Iran.

All in all, while Azerbaijan is not likely to concede to any renewed pressure from Iran, a lengthy war in Gaza may diminish Israeli influence in the South Caucasus to some extent. In the meantime, Baku appears poised to steer clear of active diplomacy on the regional turmoil, maintaining a low profile and avoiding antagonizing Muslim countries.

**Fuad Shahbazov is a policy analyst covering regional security issues in the South Caucasus. He was a research fellow at the Center for Strategic Studies and previously a senior analyst at the Center for Strategic Communications, both in Azerbaijan. He was also a visiting scholar at the Daniel Morgan School of National Security in Washington, DC.