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AIG Edition 13
- Jake Faciana
- Jul 25
- 4 min read
Summary: The peace deal between Baku and Yerevan has repeatedly stalled due to disputes over the Zangezur Corridor and who will control it. Washington proposed a plan to manage the corridor on a 100-year lease, ensuring fair usage for both countries. The geographical location of the corridor threatens Iran’s position in terms of global trade influence, which will likely lead to an increase in Iranian aggression towards U.S. assets in the region.
Development: On 24 July, Yerevan signed a Memorandum of Understanding (MoU) with Washington and Baku to cede control of the Zangezur Corridor to a U.S. private military company. The proposed corridor is a 20-mile route through southern Armenia that will link Azerbaijan to its Nakhchivan exclave. It will run directly along Armenia’s southern border with Iran and serve as a new trade route between Europe and Eurasia. The corridor will also give Turkey direct access to the Caspian Sea via Azerbaijan, as Nakhchivan shares a border with Turkey. A licensed U.S. private military company will manage the corridor under U.S. control and deploy roughly 1,000 troops. Once the project is complete, it could generate $50 to $100 billion in annual trade flow. Tehran has publicly warned that the U.S. proposal crosses a red line and that it will not tolerate the corridor project moving forward under U.S. control.
Analysis: The geographical location of the corridor threatens Iran’s position in terms of global trade influence, which will likely lead to an increase in Iranian aggression towards U.S. assets in the region. The new trade route, which bypasses Iran, threatens to undermine Tehran’s role in regional commerce and global trade corridors. The corridor also severs Iran’s land route to Russia through southern Armenia and will likely geopolitically suffocate Iran even further. This potential economic sidelining, combined with the loss of regional influence, is likely to prompt Iran to retaliate through operations targeting U.S. interests. Additionally, Iran will almost certainly perceive the deployment of U.S. private military personnel along Iran’s northern border as a direct security threat, further inflaming Tehran’s hostility and possibly provoking a more aggressive posture across the region.
[Unnamed Contributor]
Summary: Tensions between Cambodia and Thailand escalated following an exchange of gunfire near the disputed Preah Vihear Temple area. With both governments facing internal political pressures, further escalation is likely, especially in the absence of regional mediation.
Development: On 21 July, Cambodian and Thai forces engaged in a firefight along a contested part of the border near the Preah Vihear Temple. At least six soldiers were killed and several were wounded on both sides. The conflict comes amid rising nationalist expressions in both countries. Cambodia’s Prime Minister Hun Manet has faced growing scrutiny over economic stagnation and is under pressure to assert sovereignty, while Thailand’s government has used border tensions to appeal to nationalists. The International Court of Justice ruled in 2013 that Cambodia holds sovereignty over the temple, but vagueness over the surrounding land remains contested.
Analysis: The recent border clash is likely to lead to a cycle of military posturing and intensified tension, as both Cambodia and Thailand seek to use the dispute to mobilize domestic support. Cambodia may use the incident to shift focus away from internal economic and political pressure, and with recent military modernization and backing from China, it could feel encouraged to take a stronger position around the Preah Vihear area. The site has historical and symbolic importance, likely making it a breaking point for further conflict. Thailand, facing pressure from nationalist groups, is likely to respond with increased troop deployments in the area. The conflict may disrupt cross-border trade and delay infrastructure projects. The border dispute is likely to draw in international actors, especially China, which is likely to side with Cambodia while maintaining strategic economic interests in Thailand. While the Association of Southeast Asian Nations and the U.S. are likely to call for restraint, neither is likely to take a leading role in mediation.
[Jacob Faciana]
Summary: Turkey has cancelled a decade-old agreement with Iraq that ruled the Iraq-Turkey crude oil pipeline, mentioning economic, legal, and strategic reasons. Ankara’s ending of the pipeline agreement likely shows a wider effort to renegotiate its regional energy position, potentially using the move as leverage to reshape future economic arrangements with Iraq.
Development: On 21 July, Turkey issued a presidential decree terminating the 52-year-old Iraq-Turkey pipeline agreement. The announcement follows an export suspension since March 2023, when the International Chamber of Commerce ruled that Turkey had breached the agreement by approving the Kurdistan Regional Government's oil exports without Baghdad’s approval. Turkey was ordered to pay $1.5 billion in damages, leading to an immediate halt in pipeline operations. The Iraq-Turkey pipeline had carried up to 450,000 barrels per day from northern Iraq to Turkey’s Ceyhan port. Ankara claimed to be earning only $5 per barrel in transit fees, making the deal economically unsustainable. Tension grew due to safety problems in northern Iraq, like drone attacks on oil sites and a rise in illegal oil moving through unofficial border routes.
Analysis: Turkey’s cancellation of the Iraq-Turkey oil pipeline agreement likely reflects a growing dissatisfaction with its role as a passive transitional state, hinting at its ambition to become a more active energy player in the region through bigger infrastructure in coming agreements. Turkey will likely seek a new agreement encompassing crude, gas, refining, and electricity ventures, positioning itself as a more complete energy partner instead of a simple corridor. Turkey likely sees ending the agreement as a broader effort to consolidate influence in northern Iraq, where it maintains a network of military bases and economic partnerships. By ending previous agreements, Ankara is likely signaling to Baghdad and Erbil that future energy deals must occur on Ankara’s terms, backing it up with stronger economic motivations and higher security.
[Jacob Faciana]
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