Russia seeks to maintain its influence in Azerbaijan, which acts as a strategic transit hub, and across the South Caucasus as a whole. However, it now faces the growing distancing of Baku and the loss of its status as a key mediator. Azerbaijan’s deepening ties with Turkey, Israel, and the West – coupled with President Ilham Aliyev’s assertive pursuit of political autonomy – are eroding Russia’s position in the region and reflect a broader pattern of declining Russian influence across the post-Soviet space.
Azerbaijan’s diplomatic shift: from ally to independent actor
The downing of an Azerbaijan Airlines plane on 25 December 2024, which killed 38 people, marked a turning point in Russian-Azerbaijani relations. The most likely cause was a mistaken launch by a Russian air defence system during a Ukrainian drone attack. Moscow responded with nothing more than a statement referring to a ‘tragic incident in Russian airspace’ and refused to take responsibility. This response was perceived in Baku as disrespectful. Azerbaijan reacted by distancing itself from Russia, sharply changing its tone toward Moscow and refusing to take part in the 9 May Victory Day parade.
Tensions spiked again in late June 2025 when Russian security forces in Yekaterinburg detained around 50 ethnic Azerbaijanis. During the operation, two detainees died and three were hospitalised with serious injuries. The official reason for the detentions was suspicion of involvement in murders committed in 2001 and 2011. In reality, the most likely explanation is an internal conflict within the Azerbaijani diaspora, linked to a redistribution of influence between two prominent figures: Shahin Shikhlinsky and Vidadi Mustafayev. The involvement of law enforcement in these dynamics, and the resulting diplomatic crisis, highlight a breakdown of administrative control and the limited capacity of Russia’s internal security apparatus amid the ongoing war in Ukraine.
Clans, capital, and conflicts
The Azerbaijani diaspora in Russia – especially in major cities – is known for its high level of internal organisation, often structured along regional or clan lines. Members of these communities traditionally hold prominent positions in trade, logistics, construction, and the informal economy, which brings them into close contact with both criminal networks and the security services.
Although ethnic Azerbaijanis have almost entirely disappeared from the upper echelons of the Russian establishment since the 2010s, the diaspora remains sizeable: up to 1.5 million people, including more than 400,000 Russian citizens. It also includes major business figures: among the most influential are Lukoil’s CEO Vagit Alekperov; Zarakh Iliev and God Nisanov, owners of the Kievskaya Ploshchad group; and Araz Agalarov, head of Crocus Group.
Pressure on diaspora communities – up to and including threats of deportation – has long been used by the Kremlin as a tool of influence over post-Soviet states, including Azerbaijan, notably during the Second Chechen War, in retaliation for Baku’s treatment of wounded Chechen separatists. At the time, this led to concessions from the Azerbaijani side.
Clashes involving security forces and diaspora factions have occurred before, but the Yekaterinburg incident drew attention because Baku responded with uncharacteristic force: eight Russian citizens were publicly beaten and arrested on charges of drug trafficking from Iran, and employees of the Russian news agency Sputnik were detained on other grounds.
Visits by Russian officials to Azerbaijan, as well as all cultural events related to Russia, were cancelled. In turn, Russian authorities revoked the citizenship of several leaders of Azerbaijani regional communities, including that of the leader of the Moscow Region diaspora, and deported them. Informal negotiations also began behind the scenes.
Baku’s unusually forceful response is part of a broader effort to distance itself from Russia and assert its political agency. Ilham Aliyev seeks to demonstrate that he can engage with Moscow on equal terms, strengthen his domestic standing, and signal to the Azerbaijani diaspora in Russia that their interests will be defended. This strategy allows him to score points both at home and on the international stage.
A symptom of a deeper crisis
The challenge posed by Azerbaijan’s newfound assertiveness extends beyond bilateral relations; it strikes at the heart of the post-Soviet order, built on Russian dominance.
Moscow is losing its role as a guarantor of regional security, most visibly in the case of the Nagorno-Karabakh conflict. Taking advantage of the Kremlin’s distraction with Ukraine, Baku began testing the limits of Russian peacekeepers’ authority, openly demonstrating their ineffectiveness. Ultimately, Azerbaijan forced Russia out of the peace process and resolved the conflict on its own terms. If a peace deal is signed without Russian participation, it will represent a serious blow to Moscow’s regional standing.
Russia’s weakening position is also visible beyond the South Caucasus, in the neighbouring Middle East and Caspian regions. The collapse of the Assad regime in Syria – one of the Kremlin’s key allies – is reducing Moscow’s leverage in the region, while Russia has been forced to watch from the sidelines as Israel and the United States take action against Iran. Collectively, these developments underscore Russia’s growing strategic isolation and lack of resources for a proactive foreign policy.
Pragmatism under pressure
The cooling of diplomatic relations between Azerbaijan and Russia does not necessarily mean a rupture in trade or logistical ties. Russia remains one of Azerbaijan’s key trade partners: in 2024, it ranked third after Italy and Turkey, with a turnover of USD 4.8 billion – 10.1 per cent of Azerbaijan’s total foreign trade. A significant share of exports to Russia consists of agricultural products, the sale of which is critical for the country’s most vulnerable social groups.
A turn to the West
While the Kremlin still viewed Aliyev as a regional ally, Azerbaijan was steadily consolidating its position. Its distancing of itself from Moscow was accompanied by expanded cooperation with Turkey, Israel, and the United Kingdom.
The country purchases Turkish Bayraktar TB2 and Akıncı drones and is in talks to localise production. Turkey is a transit hub for Azerbaijani oil and gas, while SOCAR, the Azerbaijani state oil company, is one of the largest investors in the Turkish economy. Conversely, Turkish companies are active in Azerbaijan’s construction and agribusiness sectors.
Azerbaijan also maintains close military-technical and intelligence ties with Israel. Its arsenal includes Israeli-made drones and air defence systems (Heron, Hermes, Harop, Barak‑8), as well as electronic intelligence systems. Israel receives up to 40 per cent of its oil from Azerbaijan, and the two countries’ intelligence services cooperate closely on Iran-related matters.
The UK, in turn, is Azerbaijan’s largest foreign investor and trade partner, particularly in the oil sector.
Although Azerbaijan accounts for less than one per cent of Russia’s foreign trade and holds little economic weight for Moscow, the Kremlin views Baku as a strategically important transit hub. Azerbaijan is a key link in the International North-South Transport Corridor, which connects Russia with India, Africa, and the Persian Gulf. While it cannot yet compete with maritime routes in terms of volume, the corridor is seen as a promising alternative for delivering goods – especially military equipment and munitions that are difficult to transport by air – while bypassing Western sanctions. The Azerbaijani section of the route is already operational, and the missing segment in Iran could be completed within three to four years. Under these circumstances, neither Moscow nor Baku is interested in letting a strategic project fall victim to political tensions.
Even if the current crisis subsides, a return to the previous format of Baku-Moscow relations is unlikely. President Aliyev is deliberately distancing himself from the Kremlin, reinforcing Azerbaijan’s role as an independent actor. If his strategy succeeds, Baku may consolidate its position as a post-Soviet state capable of making key foreign policy decisions without looking to Russia.
In this context, the upcoming parliamentary elections in Armenia will be a test. If Moscow fails to regain its influence even there, it will mark a decisive shift – a full-scale retreat of Russian power from the South Caucasus.
