Iran and Azerbaijan have stepped back from the brink after a series of rhetorical barbs, territorial complaints and military provocations, a spike in tensions that reflects fast-shifting alliances and intensifying power games in the region.

The dust-up ensued after Azerbaijan President Ilham Aliyev gave an interview to the Turkish Anadolu Agency on September 28 wherein he accused Iranian truck drivers and fuel transporters of violating his country’s territorial integrity by moving goods to Armenia through the Goris-Kapan road in Armenia’s southeastern Syunik Province, which Azerbaijan claims as its own.

President Aliyev said the road that previously facilitated Iran-Armenia border trade was captured and is now owned by Azerbaijan after the 44-day Nagorno-Karabakh War in 2020. He said in the same interview that about 60 Iranian trucks attempted to enter the contested Nagorno-Karabakh enclave between August 11 and September 11, in breach of Azerbaijan’s rules.

Two Iranian drivers were detained while the Baku government levied taxes of $130 on Iranian vehicle owners doing business with Armenia, effectively steamrolling many of them into abandoning their routes due to newly introduced steep customs duties that have made trade uneconomic.

Aliyev’s public upbraiding of Tehran over a seemingly trivial dispute appeared to some observers to be political grandstanding for domestic audiences and aimed at driving home the decisiveness of Azerbaijan’s victory over Armenia in last year’s war.

But there was likely more behind Aliyev’s demand that Iran must respect Azerbaijan’s new territorial gains. To some pundits, it signaled Azerbaijan’s piecemeal steps to shift alliances and carve out a new foreign policy built on a more restrained engagement with Iran and more explicit ties with many of Tehran’s rivals.

In mid-September, Azerbaijan, Turkey and Pakistan staged large-scale joint military drills lasting two weeks dubbed “Three Brothers – 2021,” which was reportedly the first such exercise between the three countries’ armies and known to be perceived as a hostile act in Tehran.

Faced with nationalistic popular pressure calling for a proportionate response, the Iranian army kicked off massive military drills near the border with Azerbaijan on October 1 codenamed “Fatehan Kheybar,” which drew the ire of Baku authorities.

Azerbaijan’s Interior Ministry insinuated that the closure had to do with a surge in coronavirus infections, which it claimed the Husseiniyya Mosque was spreading. The Iranian embassy in Baku said it hadn’t received any advance notice of the closure.

At all marks a certain diplomatic reversal. Throughout the Nagorno-Karabakh War last year, Iran’s Supreme Leader unconditionally backed Azerbaijan, in effect demarcating Iran’s official standing in the short, sharp war.

In remarks in November 2020 at the height of Baku-Yerevan skirmishes, which were widely lauded by Iran’s populous Azeri minority, Ayatollah Khamenei had said “this military conflict should come to an end as soon as possible; of course, all the territories of the Republic of Azerbaijan that are taken over by Armenia should be liberated and returned to Azerbaijan.”

His comments had historical weight. In July 1993, in the middle of the First Nagorno-Karabakh War, then-Ayatollah Khamenei had taken a similar and even more outspoken stance: “the Armenian government and the Armenians of Karabakh oppress the Muslims of the region and we condemn the recent actions of the Armenians of Karabakh, backed by the government of Armenia.”

President Aliyev, addressing the Commonwealth of Independent States (CIS) Heads of State Council, on October 15, intoned, “for about 30 years, Armenia, in collusion with Iran, used the occupied territories of Azerbaijan to carry out drug trafficking to Europe.” This was his most recent verbal attack targeting Tehran.

Iran’s reaction to the accusations, apart from the tit-for-tat military exercise, has been mostly passive. Indeed, even as Aliyev has pushed on with Iran-bashing rhetoric, his counterpart Ebrahim Raisi hasn’t yet made an official comment in response. Iranian foreign ministry officials, meanwhile, have stuck to diplomatic platitudes on resolving differences based on mutual respect and the principle of good neighborliness.

Some analysts have suggested Iran’s muted response to Azerbaijan’s provocations underscore the country’s political vulnerabilities and international isolation.

One counter-accusation trickling out of Tehran, mostly rehashed by newspapers, state-aligned commentators and military figures, is that Azerbaijan has been incited by Israel to tread an anti-Iranian line, as Tel Aviv sought to build up its military and economic footprint in Azerbaijan with an eye towards creeping up on Iran’s northern borders.

Azerbaijan and Israel’s diplomatic dalliance, of course, is no novelty. To be sure, Azerbaijan is now finding trade, military and cultural partnerships with Israel increasingly beneficial to its national interest. Azerbaijan purchased a staggering $8.3 billion worth of arms from Israel in 2020, reportedly accounting for 69% of Azerbaijan’s arms imports.

But while Iran views burgeoning Azerbaijan-Israel relations suspiciously, experts in Azerbaijan say the accusations of playing Israel’s stooge are undue and that Baku is not beefing up connections with Tel Aviv at the expense of its relations with an indispensable neighbor in Iran.

“The possibility of Israel influencing Azerbaijan on such issues is just a fantasy. Azerbaijan makes its own decisions… Joint military exercises with Turkey have been going on for many years,” said Ahmad Shahidov, the head of Azerbaijan Institute for Democracy and Human Rights. “Azerbaijan and Turkey are brotherly countries, we have a common military industry and army. Every year, joint Turkish-Azerbaijani military exercises are held. What does this have to do with Israel?”

“Israel and Turkey are hostile countries. In this case, how can the joint Turkish-Azerbaijani military exercises be a provocation of Israel? It’s a ridiculous idea. There is no basis,” he told Asia Times.

Another notion advanced by some observers is that despite Iran’s public advocacy of Azerbaijan’s position in the conflict with Armenia, Baku may believe that Tehran has taken tacit sides with Armenia for largely economic reasons, as seen with the recent contested trade route.

“Azerbaijan’s rhetoric is a response to what Baku believes to be Iran’s undisclosed support for the Armenian side in the conflict… Researchers like myself have long detailed Tehran’s indirect support for Armenia,” said Svante Cornell, an expert on Eurasian security and political affairs and the director of the Stockholm-based Institute for Security and Development Policy.

“Baku blames Tehran for having allowed the transit of Russian weapons to Armenia during the war, and of continuing to supply the unrecognized Armenian entity in Nagorno-Karabakh even after the war. This, as well as other Iranian moves, led Azerbaijan’s leadership to make statements indicating its displeasure with these events,” he added.

While Iran’s leadership hasn’t openly spoken to its anxieties about Azerbaijan and Turkey possibly playing the ethnic card by conspiring to stir up Iran’s massive 20-million strong Azeri minority against the establishment by appealing to their Azeri nationalistic sentiments, it is clearly a latent concern, particularly in any conflict scenario.

Emil Avdaliani, director of Middle East studies at the Tbilisi-headquartered think tank Geocase, for one, rules out the possibility: “I generally believe the secessionist element is a bit exaggerated. Iran has successfully managed to integrate the Azerbaijani population in the north of the country through accepting many into the corridors of power and uniting the ordinary population around the idea of Iran.”

“Surely this does not guarantee total security, but threats are way lower in intensity than in the turbulent 1990s,” he told Asia Times.

For now, tensions appear to have been contained. Following instructions by the foreign ministry, the Transit and International Transportation Affairs Bureau of Iran Road Maintenance and Transportation Organization has prohibited the entry of trucks and fuel trailers into Nagorno-Karabakh and the Lachin region, known to Armenians as Berdzor.

The Azerbaijan government, for its part, recently released the previously detained two Iranian drivers.

“Relations between Iran and Azerbaijan have still not reached a point of no return and there is still a lot of room to de-escalate the tensions and improve the relationship, because both sides have shown signs of unwillingness to escalate beyond a certain extent,” said Hamidreza Azizi, an Alexander von Humboldt Fellow with the German Institute for International and Security Affairs (SWP) in Berlin.

“Basically, I still see room for improvement in the current situation. I don’t think the relationship will turn from a combination of rivalry and friendly engagement, as has been the case so far, into overtly and completely hostile relations,” he told Asia Times.

On October 7, President Aliyev gave an interview to the Italian daily La Repubblica in which he spoke about relations with Iran and what some perceive as his regret in having lost a seasoned interlocuter in Tehran in former president Hassan Rouhani.

“We, with Iran and during the previous Iranian government with which we worked for eight years, managed to elevate our relations to actually highest possible level. I had more than ten meetings with my counterpart Mr Hassan Rouhani,” he said in the interview.

“All of them were productive. We signed many agreements and we implemented them on energy, on transportation, on cultural development, security. Our relations were actually the symbol of friendship and good neighborhood,” he said.

In the same interview, Aliyev did not allude to his new Iranian counterpart, an enigmatic hardliner with little to no foreign policy experience.

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