Introduction
The concept of neutrality has long served as a strategic policy tool for small states seeking to avoid entanglement in great power rivalries. Historically associated with non-participation in foreign wars and military alliances, neutrality has evolved into a complex construct shaped by regional dynamics, strategic geography, and power politics. To be effective, neutrality must meet two critical conditions: it must be credible, demonstrated through consistent non-alignment and sufficient self-defense capabilities, and a neutral state must offer utility to competing powers, whether through mediation, geographic buffer roles, or economic relevance.

Azerbaijan’s geopolitical position at the crossroads of Europe, the Middle East, and Central Asia makes neutrality particularly challenging, especially during periods of regional escalation. Such an escalation occurred on March 30, 2025, when U.S. President Donald Trump, in an interview with NBC News, threatened Iran with bombing and secondary sanctions if Tehran failed to reach an agreement with Washington over its nuclear program. Amid growing concerns that the failure of U.S.-Iran nuclear negotiations could trigger joint U.S.-Israeli strikes on Iran, Azerbaijan is navigating an increasingly complex diplomatic landscape. This analysis examines how Azerbaijan’s deepening political, economic, technological, and military cooperation with Israel, its evolving relationship with the United States, and its concurrent engagement with Iran, Russia, and Turkey threaten to undermine its long-standing balancing strategy and risk drawing the country into a broader regional conflict.

Strategic Depth: Azerbaijan’s Alignment with Israel
Azerbaijan’s partnership with Israel has become a cornerstone of its defense strategy. Between 2016 and 2020, Israel supplied 69% of Azerbaijan’s arms imports, equipping it with state-of-the-art drones, missile defense systems, and cyber capabilities—assets that proved decisive during the 2020 Second Karabakh War. Notably, Israeli loitering munitions, high-precision guided missiles, and surveillance technologies enabled the Azerbaijani army to deliver precise strikes on Armenian forces in Nagorno-Karabakh, disable strategic military facilities, disrupt communication lines, and ensure air superiority. These capabilities facilitated rapid advances against Armenian defensive lines, a fact publicly acknowledged by Azerbaijani officials. On May 1, 2025, Mukhtar Mammadov, Azerbaijan’s Ambassador to Israel, expressed gratitude for Israel’s support during Azerbaijan’s efforts to “liberate its occupied territories.” Mammadov also stated that the future of Azerbaijani-Israeli cooperation holds significant promise for expanding collaboration, exchanging expertise, and pursuing joint initiatives.

However, these joint initiatives extend beyond military hardware procurement. On March 28, 2023, the establishment of a Cyber Security Center in Baku, in collaboration with Israel’s prestigious Technion Institute, underscored growing cyber-intelligence cooperation. This strategic alignment is further strengthened by robust energy ties: Azerbaijan supplies approximately 40% of Israel’s oil needs via the Baku-Tbilisi-Ceyhan pipeline, securing a reliable market for Azerbaijani exports while meeting Israel’s energy security requirements.

Iranian Security Concerns
From Tehran’s perspective, the Azerbaijan-Israel relationship poses a serious national security threat. Iran has repeatedly expressed alarm over reports of alleged Israeli reconnaissance and sabotage activities conducted from Azerbaijani territory. While Baku officially denies such involvement, Iran remains unconvinced. The opening of Azerbaijan’s embassy in Tel Aviv in November 2022 was viewed by Tehran as a strategic alignment with Israel, prompting provocative Iranian military drills near the Azerbaijani border and escalating diplomatic rhetoric throughout late 2022 and 2023. Since then, Azerbaijan-Iran relations have shifted toward political confrontation, marked by hostile actions such as propaganda, threats of force, and demonstrative military drills along their shared border. However, these tensions have not crossed the threshold of war or escalated into direct armed conflict.

Baku’s Balancing Act
Despite past political confrontations with Tehran, Azerbaijan has long sought to balance its strategic relations among competing regional powers, including Iran, Russia, Turkey, Israel, and the U.S. President Ilham Aliyev has consistently affirmed Azerbaijan’s policy of non-alignment, recently stating that “Azerbaijan’s territory will not serve as a battleground for regional or global powers.” However, maintaining this neutral stance is becoming increasingly difficult. Azerbaijan’s expanding cooperation with Israel and efforts to deepen strategic ties with the U.S. could heighten suspicions and be perceived as a strategic threat in Iran.

Economic Dependencies and Geopolitical Stakes
Azerbaijan’s foreign policy is also driven by economic imperatives. Its military procurements from Israel and energy exports are central to its defense and economic strategies. At the same time, Baku cannot afford to fully alienate Iran. On April 28, 2025, Iranian President Masoud Pezeshkian visited Baku to bolster bilateral economic ties. During the visit, seven cooperation agreements were signed in the presence of Presidents Pezeshkian and Ilham Aliyev, covering areas such as political consultations, transportation, cultural exchange, healthcare, media, and investment. At a joint press conference, Pezeshkian noted that “one of the important joint decisions made during this visit was the formulation of a comprehensive strategic plan for cooperation between the two countries.” The visit also led to the resumption of Bank Melli Iran’s operations in Azerbaijan, signaling renewed economic engagement. Although the visit’s official agenda focused on economic collaboration, its timing—amid ongoing U.S.-Iran nuclear talks and speculation about potential U.S.-Israeli strikes on Iran—highlights the underlying geopolitical stakes. Recent open-source reports about a potential Azerbaijan-Israel-U.S. trilateral cooperation format further underscore these dynamics.

On May 7, 2025, Israeli Prime Minister Benjamin Netanyahu’s scheduled five-day visit to Azerbaijan was canceled after Turkey denied access to its airspace. However, Israeli media highlighted the strategic importance of the visit. Netanyahu’s agenda reportedly included two key issues: mediation with Turkey to avoid conflict in Syria and expanding the 2020 Abraham Accords to include Azerbaijan. Including Azerbaijan in the Abraham Accords would reverse their traditional role: instead of the U.S. bringing Israel closer to its Muslim allies, Israel would strengthen ties between its Muslim partner state, Azerbaijan, and the United States. On March 6, 2025, in an open letter to the Knesset, the Israeli Prime Minister’s Office announced that Israel was in talks with the Trump administration to establish a “strong foundation for trilateral cooperation between Israel, Azerbaijan, and the U.S.” On March 13, 2025, during his address at the 12th Global Baku Forum, President Ilham Aliyev expressed optimism that relations with Washington would improve under the Trump administration, stating, “We hope that with the new administration, we will rebuild our strong partnership.” Baku-Washington relations are likely to benefit from developments in the Israel-Azerbaijan track. In this context, Dr. Vasif Huseynov, head of a department at Azerbaijan’s Center of Analysis of International Relations, noted that the trilateral aspirations of Israel, Azerbaijan, and the U.S. are not merely economic but reflect a strategic alignment against common adversaries, particularly Iran. This development risks further complicating Baku’s delicate balancing act and could entrench Azerbaijan within an emerging anti-Iran alignment. Regardless of Azerbaijan’s declared neutrality, such trends are likely to be met with deep suspicion in Tehran and framed as a looming strategic threat to Iranian national security.

Regional Escalation Scenario
Iran has warned neighbors hosting U.S. military bases that they could be targeted if involved in anti-Iranian actions. On April 6, 2025, Tehran issued formal notices to Iraq, Kuwait, the UAE, Qatar, Turkey, and Bahrain, stating that any support for a U.S. strike—including allowing the use of their airspace or territory—would be regarded as an act of hostility, according to a senior Iranian official cited by Reuters. In this context, should U.S.-Iran nuclear talks collapse and joint U.S.-Israeli military action follow, Azerbaijan’s neutrality may prove unsustainable due to its deepening ties with Israel and the prospect of closer alignment with the United States. However, the absence of Israeli or U.S. military bases on Azerbaijani soil limits the extent and technical capacity of its potential involvement in direct operations against Iran. Instead, intelligence sharing with Israel and potential Israeli sabotage activities conducted through Azerbaijani territory are the most plausible forms of support in any anti-Iranian effort.

Such a scenario could also draw in other regional actors. Russia, bound by a recently ratified strategic partnership treaty with Iran, may feel compelled to intervene on Tehran’s behalf. Meanwhile, Turkey—Azerbaijan’s key military ally and a NATO member—could be pulled into the conflict if its regional interests are threatened. Any confrontation involving Azerbaijan risks escalating into a broader regional conflict, destabilizing the South Caucasus and transforming it into a theater of great-power rivalry. This could jeopardize both the Armenia-Azerbaijan peace process and Armenia-Turkey normalization talks.

A wider armed conflict involving Azerbaijan would also threaten Europe’s energy security. The Baku-Tbilisi-Ceyhan (BTC) pipeline and other infrastructure critical to delivering Caspian oil and gas to global markets lie within the operational strike range of Iranian missiles and drones. Disruption would reverberate across international energy markets and deepen Europe’s dependence on alternative sources.

Conclusion: The Shrinking Space for Neutrality
Azerbaijan’s foreign policy, once defined by strategic ambiguity and pragmatic neutrality, is being reshaped by the gravitational pull of mounting U.S.-Israel-Iran tensions. While Baku continues to articulate a commitment to neutrality, its actions—particularly deepening defense and intelligence cooperation with Israel, supporting trilateral frameworks with Tel Aviv and Washington, and increasing diplomatic visibility—are eroding this posture.

The convergence of geopolitical, economic, and security pressures is making neutrality increasingly untenable. Should U.S.-Iran nuclear talks collapse and U.S.-Israeli military strikes target Iranian nuclear or military infrastructure, Azerbaijan could find itself drawn into a regional conflict with Iran, either through a deliberate decision—should Baku’s cost-benefit analysis justify it—or due to external perceptions by Iran. Prominent neorealist scholar John Mearsheimer argues that states prioritize maximizing their survival, and external perceptions can escalate into power politics or even armed conflict, given that all states possess some offensive military capabilities and can never be certain of one another’s future intentions.

As regional rivalries intensify, Baku’s efforts to navigate competing alliances may become increasingly unsustainable. Whether these dynamics raise the risk of Azerbaijan’s entanglement in a broader confrontation with Iran remains uncertain in the short term. While Azerbaijan may aim to maximize its balancing strategy among regional powers or adopt a mediating role between Iran and the U.S. and/or Israel, unstable regional developments—exacerbated by the aftermath of the Trump presidency—have significantly constrained the space for neutrality available to small states like Azerbaijan.

Contributed by Mikhail Mkrtchian, Regional Security Analyst