A US-brokered peace declaration between Armenia and Azerbaijan has been met with mixed reactions in Iran. The coutry has welcomed peace between the two ex-Soviet nations but also expressed opposition to growing US influence in its backyard. 

Armenia and Azerbaijan are both located on Iran's northwestern frontier in the South Caucasus. After decades of territorial disputes, the two nations signed a peace declaration at the White House on August 9.

The agreement provides for the construction of a transit corridor between Azerbaijan and its exclave of Nakhchivan, which goes through a 32-kilometer (20-mile) strip of Armenian territory.

The corridor, which allows the US development and usage rights, is to be named the "Trump Route for International Peace and Prosperity" after current US president, Donald Trump.

Azerbaijan has established itself as a major oil and gas producer, and the new route would offers a more direct trade connection to Turkey and onward to Europe.

For Iran, also a major energy power, this would be a severe blow. Also, Iran maintains rather close ties to Armenia and is sensitive to moves that might limit its diminishing influence in the region.

Iran vows to block corridor

On August 9, Ali Akbar Velayati, advisor to Supreme Leader Ali Khamenei, said Iran, "will not allow the creation of this corridor," as the US presence in the South Caucasus poses a threat to Iranian interests.

However, Iranian President Masoud Pezeshkian quickly contradicted this assessment a day later.

The peace plan "also takes Iran's views into account," he said during a phone call on Monday with Armenia's Prime Minister Nikol Pashinyan, which was reported in Armenian media. The planned route would not cut off Iran's access to Armenia, Pezeshkian emphasized.

Why is the region strategically important?

The corridor is much more than a transit project, said Afshar Soleimani, a former Iranian ambassador in Azerbaijan.

"The main problem is the strategic competition between Russia and the West," he told DW.

Solemani added that the West, and the US especially, are trying to diminish Russian influence in the South Caucasus and take advantage of a power vacuum brought on by Russia being bogged down in Ukraine.

Shireen Hunter, an Iran expert at Georgetown University in the US, told Iranian news website Tabnak that she doesn't think Russia can "win back" its former dominance in the region, even if it is set to remain an important actor.

"It is conceivable that Russia and the US are now seeking a comprehensive agreement on Ukraine and the Caucasus," she said.

According to Hunter, the construction of pipelines and trade routes that bypass Iran has been part of US strategy since the 1990s.

"Trump has merely accelerated this process and now achieved the signing of the agreement,” said Shireen, who was an Iranian diplomat prior to the 1979 Islamist revolution.

The new "Trump route" would serve as a significant reinforcement of Iran's geopolitical isolation, she said.

Iran hit by multiple crises at once

The military exchange with Israel earlier this year, the loss of proxy militias in the Middle East, along with growing dissatisfaction among the population with political repression and the economic situation, have all significantly weakened the position of Iran's leadership.

While Iran still maintains good relations with Christian-influenced Armenia, its relations with Muslim-majority Azerbaijan are tense.

"Tehran attempted to curb Israel's influence in Azerbaijan by establishing closer ties with Armenia," Reza Talebi, an Iran expert at Germany's University of Leipzig, told DW.

"The result, however, is that Azerbaijan is now even more closely linked to Israel," Talebi added. Azerbaijan was separated from Iran in 1828 after a Russian-Persian war and annexed to the Russian Empire.

Two Iranian provinces along the northwestern border still bear the names West and East Azerbaijan.

The number of Iranian citizens with Azerbaijani roots is estimated at around 18 million, which is more than the total population of Azerbaijan, at 10.2 million.

There is also concern in Iran about separatist groups wanting to secede from Iran and form a "South Azerbaijan."

In Baku, there are also nationalist movements that speak of a "greater Azerbaijan" that would include Iranian Azerbaijanis.

According to German-based expert Talebi, Iranian President Pezeshikan is trying to adjust Iran's regional policy, including towards Azerbaijan, the Iraqi region of Kurdistan, Pakistan and Turkey. The government's goal is to avoid a new conflict in the context of Iran's growing isolation.

The president himself is half-Kurdish and half-Azerbaijani. He met with Azerbaijan's president, Ilham Aliyev, in Baku in April and spoke Azerbaijani in front of the cameras.

With both global and regional alliances shifting, Iran must fundamentally rethink its entire foreign policy and adapt its goals to the changed realities.

This would include accepting US regional presence, and resolving issues with Washington, said expert Shirin Hunter.

Morad Rahmati contributed to this report. It was was originally written in German.