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Turkiye and the Gulf states are carefully reading the zeitgeist and seizing the moment in the South Caucasus. The Armenia-Azerbaijan peace process is progressing at a time when the region is no longer seen as a backyard of the traditional players. Instead, it is approached as a strategic location that offers value, motivating both Ankara and the Gulf capitals to recalibrate their policies in a coordinated approach.

For years, the South Caucasus was dominated by the intense rivalry between local actors Azerbaijan and Armenia, along with the involvement of global powers, namely Russia and the West. Thus, opportunities for the Gulf states and Turkiye to extend their presence in the region and cooperate for common goals were limited.

But five key developments have opened the door to increased Turkish-Gulf influence in the South Caucasus. First, the 2021 AlUla Declaration that ended the diplomatic rift among the Gulf states; second, the Turkish-Gulf normalization process; third, Russia’s invasion of Ukraine; fourth, the decline of Iran’s regional influence; and, lastly and most importantly, the peace deal between Armenia and Azerbaijan, signed under the auspices of US President Donald Trump last month.

On the path to the Yerevan-Baku deal, both Turkiye and the Gulf states played instrumental roles. The UAE hosted the peace talks between Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan in July. Its role was strongly supported by Turkish leaders, whom the Emirati president visited in Ankara a few days later.

On the path to the Yerevan-Baku peace deal, both Turkiye and the Gulf states played instrumental roles

Dr. Sinem Cengiz

The years-long tensions between Armenia and Azerbaijan were not only jeopardizing the stability of the South Caucasus, but also posing challenges to the economic and political interests of the Gulf states and Turkiye. However, these tensions also presented opportunities for them to implement their soft power tools, as seen with the UAE’s role.

Compared to Russia, Iran and Turkiye, the Gulf states remain relative newcomers in the region. And unlike these other stakeholders, the Gulf states’ interest in expanding their relations in the South Caucasus is not driven by historical or ideological motivations — it is purely economic. South Caucasus states, namely Azerbaijan, Armenia and Georgia, also seek cooperation with the Gulf states for their investment potential, not for military or political purposes.

The Gulf states’ further engagement with the South Caucasus aligns with their broader national strategies, which seek the diversification of resources and partners. Their desire to diversify their investments is part of a future strategy for connectivity between Europe, Asia and the Middle East. This alternative transit corridor plan gained further prominence following the Russian invasion of Ukraine. Thus, the Gulf states’ growing footprint in the South Caucasus, which has taken center stage for infrastructure, connectivity and energy security, appears to be a long-term process.

For Turkiye, deepening economic and political ties with South Caucasus states also fits within a larger strategy to diversify its investments. The normalization between Turkiye and some Gulf states offered the chance for a collective approach to the region that had a positive impact on the Azerbaijani-Armenian peace talks. In broader terms, Turkish-Gulf engagement in the South Caucasus underscores a strategic pivot toward Eurasia, which is driven by three components: connectivity projects, investments, and trade opportunities.

The Gulf states’ further engagement with the South Caucasus aligns with their broader national strategies

Dr. Sinem Cengiz

It is this geopolitical context that pushes Turkiye and the Gulf states to gain further prominence in the South Caucasus, which is seen by these actors as the continuation of the Central Asian corridor, namely the Middle Corridor — a route that runs from the Black Sea and Turkiye via Georgia and Azerbaijan to Central Asia and western parts of China. This corridor represents the shortest land route between Europe and Asia. It also represents an alternative route.

The financial flows from the Gulf to the South Caucasus states are crucial for their development. This is particularly important for Armenia. Azerbaijan has been in a more advantageous situation, as it has been enjoying closer trade and energy ties with the Gulf states and Turkiye for a decade or more. Armenia now wants to catch the same train. Therefore, the implementation of the peace deal is significant, as it will also enable the normalization of ties with Turkiye and the reopening of the Armenian-Turkish border, which is crucial for Yerevan’s connectivity to the rest of the world and, thus, its economic prospects.

For South Caucasus states, closer ties with Turkiye and the Gulf present an opportunity to enhance their regional posture and fit into what might be called a multivector foreign policy. They can benefit from the increasing Turkish-Gulf cooperation and pitch themselves as states that are open to economic integration and cooperation, rather than conflict. Moreover, the growing Turkish-Gulf presence will also ensure that no single power will dominate the region for its own interests, as has been the case for decades.

With all these added stakes, the peace between Armenia and Azerbaijan becomes even more crucial. The two states have suffered from the competing interests of the global powers for decades. The stability they will create in the South Caucasus will secure trade routes and support Turkiye and the Gulf states’ long-term projects, which aim to enhance the connectivity of this region.

• Dr. Sinem Cengiz is a Turkish political analyst who specializes in Turkiye’s relations with the Middle East. X: @SinemCngz