24 October 2020

ISA Risk Alert: War in the South Caucasus


  • Border clashes between the armed forces of Azerbaijan and Armenia turned into a much larger conflict as Azerbaijan launched a series of attacks on the enclave of Nagorno-Karabakh. This enclave is populated mostly by Armenians, but is surrounded by the territory of Azerbaijan. Armenia seized control of it and surrounding territory following a war between the two countries in the wake of the dissolution of the Soviet Union in the early 1990s.
  • Recently, Armenia accused Azeri armed forces of shelling Stepanakert, the largest city in Nagorno-Karabakh, while Azerbaijan accused Armenian armed forces of launching missile strikes against a number or cities in Azerbaijan in recent days.
  • Azerbaijan’s President Ilham Aliyev has long vowed to retake Nagorno-Karabakh from Armenian control, and he may view the current state of global affairs as his best chance to do so. Furthermore, Azerbaijan’s oil and gas wealth has given the country a significant economic and military advantage over Armenia in recent years,
  • Should the conflict continue to escalate, there are fears that Turkey and Russia could be drawn into the fighting. Turkey has been accused of actively backing Azerbaijan in this conflict. Meanwhile, Russia is treaty-bound to defend Armenia, but has close ties with both countries.



Potential Impact

  • The Impact on the Caucasus: The Caucasus region, sandwiched between Russia, Turkey and Iran, has long been one of the most unstable parts of the world and a full-blown conflict between Azerbaijan and Armenia could lead to other conflicts erupted in this deeply-divided region.
  • The Impact on the World: Turkey is aggressively backing Azerbaijan in this dispute and this could lead to it coming into conflict with Russia as those two countries are already at odds over the conflicts in Syria and Libya. Iran is also involved, as Azeris comprise that country’s largest minority.


Most Likely Outcomes:

  • A ceasefire is brokered by outside powers, returning the situation to the status quo. (75%)
  • Azerbaijan launches a full-scale offensive to retake Nagorno-Karabakh. (20%)
  • Turkey enters the conflict on the side of Azerbaijan, prompting Russian intervention. (5%)