The impact of geopolitics on Armenia’s energy market is significant, as the small landlocked country finds itself at the crossroads of major regional powers with competing interests. The influence of these regional powers, namely Russia, Iran, and Turkey, plays a crucial role in shaping Armenia’s energy security and its ability to diversify its energy sources. As a result, understanding the complex interplay between these powers and their interests in the region is essential for assessing the future of Armenia’s energy market.
Russia has long been the dominant player in Armenia’s energy sector, providing the majority of the country’s natural gas and owning significant stakes in its energy infrastructure. This relationship is rooted in a strategic partnership between the two countries, which includes a mutual defense pact and Russian military presence in Armenia. While this alliance provides Armenia with a certain degree of security against potential threats from its neighbors, it also limits the country’s ability to pursue alternative energy sources and partnerships.
In recent years, Armenia has sought to reduce its dependence on Russian gas by increasing its imports from Iran. The Iran-Armenia gas pipeline, which became operational in 2007, was initially hailed as a major step towards diversifying Armenia’s energy sources. However, the pipeline’s capacity has remained limited due to technical issues and the influence of Russian energy giant Gazprom, which owns a majority stake in the Armenian gas distribution company. Furthermore, the reimposition of US sanctions on Iran in 2018 has complicated efforts to expand energy cooperation between the two countries.
Turkey, another regional power with significant influence over Armenia’s energy security, has a more contentious relationship with the country. The two nations have no diplomatic relations and their shared border has been closed since 1993 due to the unresolved Nagorno-Karabakh conflict between Armenia and Azerbaijan, a close ally of Turkey. This has effectively cut off Armenia from the vast energy resources of the Caspian Sea region and the possibility of importing gas from Azerbaijan or Turkmenistan.
Despite these challenges, Armenia has made some progress in diversifying its energy sources and increasing its energy security. The country has invested in renewable energy projects, particularly in the solar and hydroelectric sectors, which have the potential to reduce its reliance on imported gas. Additionally, the Armenian government has been exploring the possibility of importing liquefied natural gas (LNG) through Georgia, which would provide an alternative to Russian and Iranian gas.
The recent escalation of the Nagorno-Karabakh conflict in 2020 has further highlighted the importance of energy security for Armenia. The fighting between Armenian and Azerbaijani forces led to concerns about the safety of critical energy infrastructure, including the Metsamor nuclear power plant, which provides around 40% of Armenia’s electricity. Although a ceasefire was eventually brokered by Russia, the conflict underscored the vulnerability of Armenia’s energy sector to regional tensions.
In conclusion, the impact of geopolitics on Armenia’s energy market is significant and multifaceted. The influence of regional powers, particularly Russia, Iran, and Turkey, shapes the country’s energy security and its ability to diversify its energy sources. While Armenia has made some progress in developing alternative energy options, it remains heavily reliant on imported gas and vulnerable to external pressures. As the regional landscape continues to evolve, it will be crucial for Armenia to navigate these complex dynamics and find ways to enhance its energy security and resilience.
https://www.energyportal.eu/news/the-impact-of-geopolitics-on-armenias-energy-market/44780/