Will A Legislative Relic Wreck Trump’s Caucasus Peace & Energy Plans?

US President Donald Trump greets Azerbaijani President Ilham Aliyev at the White House in Washington, DC on August 8, 2025. The relationship between the U.S. and Azerbaijan is an increasingly vital one for Washington.

AFP via Getty Images

In the ever-shifting, fractious geopolitical landscape of Eurasia and the Caucasus, the announcement in August of the American-brokered deal between Armenia and Azerbaijan, was a true, positive breakthrough. After the chaos of the collapse of the Soviet Union, these two countries fought a bitter series of wars over the disputed Nagorno-Karabakh territory between 1988 and 2023. Previously, Russian and Iranian geopolitical machinations in this strategic area kept tensions high while disrupting trade and economic activity and the development of an energy infrastructure that would include Armenia.

Even after the 2020 war in which Azerbaijan won a decisive military victory, questions remained. Half a decade of negotiation later, with peace at hand and most of the challenging diplomatic work done, an obstacle lingers that can interfere with America’s ability to capitalize on the new treaty and the Trump Route for International Peace and Prosperity. Also in August, President Trump suspended the application of Section 907 of the 1992 Freedom Support Act, which prevents direct U.S. aid to Azerbaijan. The time has come for the outdated provision to be permanently retired to allow the promise of the TRIPP to be fully realized rather than leaving China an opening to get in the way.

The Caucasus Are Key for Transport and Trade

The Caucasus, which has linked the global North and South, and the East and West since time immemorial, focuses the geopolitical aspirations of many of the world’s great powers, including Russia, China, and the United States. Turkey and Iran are also intertwined. Where great powers jostle for influence and energy, and security remains a paramount concern, the United States cannot afford to sleepwalk past the strategic value of Azerbaijan.

A small but strategically located nation, nestled at the eastern shores of the Caucasus facing the Caspian Sea, the largest salt lake in the world, Azerbaijan serves as the gateway from the West to energy-rich Central Asia via the Middle Corridor, a web of transportation routes connecting Eurasia with Europe and the Middle East. It has emerged as a vehemently independent player in the region — simultaneously resisting Russian and Iranian pressure, maintaining a secular, pro-Western outlook despite being majority Shia, and serving as a vital energy artery to Europe.

Yet, U.S. foreign policy toward Baku remains outdated, handcuffed by Section 907 of the 1992 Freedom Support Act. This early post-Cold War relic restricts direct aid to the Azerbaijani government. Initially created to pressure Azerbaijan over its conflict with Armenia, Section 907 has outlived its usefulness. Today, it actively hampers America’s strategic, economic, and diplomatic interests in the South Caucasus and beyond. It’s time for Washington to recognize that Azerbaijan is not just a regional player; it’s a partner that can collaborate with American businesses and help the U.S. seize strategic opportunities.

Few nations are better positioned to balance both Russia and Iran than Azerbaijan, and it is the only country that borders both. Azerbaijan is viewed with deep suspicion by the theocracy in Tehran not just for geopolitical reasons, but because of what Azerbaijan represents. This is a secular, Shi’a Muslim-majority country—the ideological opposite of the Iranian regime, which has reportedly executed at least 1,000 imprisoned Iranians in 2025 alone. Baku’s religious tolerance and willingness to cooperate with Israel and the West are an active threat to the Shia authoritarian theocracy, contradicting the constant drumbeat of Tehran’s “Death to Israel, Death to America” narrative. Upon independence after World War I, before being forcibly incorporated into the future Soviet Union in 1921 by Vladimir Lenin and Joseph Stalin, Azerbaijan granted women the right to vote before the United States did.

More importantly, up to 25 million ethnic Azeris reside in Northwestern Iran, many of whom consider Baku a cultural and political reference point and a model. For Tehran, this is more than a nuisance; it’s a long-term threat to internal cohesion. The mullah regime’s fear of ethnic unrest and pan-Turkic sentiment makes Azerbaijan’s mere existence a challenge to its legitimacy.

Russia, for its part, has long seen the South Caucasus as its “near abroad,” a sphere of former imperial influence, but Baku has proven stubbornly independent. Moscow’s historical support for Armenia in the Nagorno-Karabakh conflict poisoned its relationship with Azerbaijan. Most recently, in incidents further straining relations, Russia shot down an Azeri civilian aircraft liner and then refused to take responsibility for the deaths, dozens of Azeris in Russia were arrested, and two of them died in police custody after being tortured. The Kremlin failed to play the role of neutral broker or friendly neighbor, and Baku has not forgotten.

Despite being surrounded by hostile powers, Azerbaijan has quietly pursued a foreign policy aligned with American interests. For years, Azerbaijan has worked closely with Israel on defense, energy, and agriculture. Azerbaijan covers a significant part of Israeli oil imports, Israeli drones played a decisive role in Azerbaijan’s military victories in Nagorno-Karabakh, and the two countries continue to deepen defense ties.

More recently, Azerbaijan expressed its openness to supporting the Abraham Accords, a U.S.-led initiative aimed at normalizing relations between Israel and the Muslim world. Though not an Arab state, Baku’s endorsement carries symbolic weight by signaling that normalization with Israel has support. In a region where symbolism can be as potent as military might, Azerbaijan’s quiet diplomacy should not go unnoticed. More practically, expanding the Abraham Accords could provide a broader base for generalized regional peace.

Azerbaijan: An Energy Nexus

While geopolitics compel Azerbaijan to look West, it is energy that drives Western engagement with Azerbaijan. The war in Ukraine has exposed Europe’s dangerous dependence on Russian energy, especially gas. As the EU scrambles to diversify its energy sources, Azerbaijan stands out as both a producer and a transit country. The Southern Gas Corridor, completed with strong Western backing, delivers Caspian gas from Azerbaijan through Georgia and Turkey to Southern Europe, bypassing both Russia and Iran. Recently, the Syrian energy minister announced Azerbanji plans to sell natural gas to post-Assad Syria.

What’s more, Azerbaijan serves as a crucial conduit for energy and goods from Central Asia. Kazakh oil is increasingly being transported via Azerbaijan’s infrastructure to reach Western markets. Turkmenistan swaps some of its gas with Azerbaijan. This East-West energy axis, known as the Middle Corridor, unlocks Central Asia’s energy potential without requiring transit through Russia, Iran, or China. This is vital for reducing Western dependence on adversarial suppliers or logistics.

Far from competing with American energy interests, Azerbaijan’s resources and transit capacity complement them. They enhance energy security for U.S. allies while supporting the broader Western goal of limiting Russian and Iranian leverage over global markets.

Those Who Move Forward: U.S. vs China

Those who defend Section 907 today do so out of a misguided understanding of current regional dynamics. The truth is, Azerbaijan is not the aggressor in the region. It has offered peace and opened trade corridors with Armenia, and cooperated with both the U.S. and Israel. The lingering sanctions of Section 907 not only insult an emerging ally—they actively harm American interests.

There’s also a hard geopolitical reality at play: if the U.S. doesn’t engage, China will. Beijing has already made inroads in Azerbaijan through its Belt and Road Initiative, financing infrastructure and promoting trade ties. America’s hesitation in selling higher-ticket value military equipment compelled it to turn to Chinese-Pakistani aircraft suppliers back in May. While Baku remains wary of Beijing, the lack of robust Western engagement leaves a vacuum.

China excels at transactional diplomacy and could potentially broker a detente between Baku, Tehran, and Moscow, similar to the one it struck between Tehran and Riyadh, at the expense of U.S. influence. A Beijing-brokered trilateral axis would not only undermine American leverage in the region but could also shift the entire energy transit map eastward, away from Western input.

Removing Section 907 is not about endorsing every decision Azerbaijan has made or producing some grand historical judgment. It’s about recognizing that American diplomacy must consider U.S. interests and is not a purity contest; it’s a balance of interests. Baku is not perfect, but it stands firmly against two of America’s most dangerous adversaries, cooperates with some of its closest allies, supports energy diversification for Europe, and plays a stabilizing role in a volatile neighborhood. If the U.S. can’t reward that level of cooperation by striking a single section of a single outdated law whose time has passed to enable more trade, we shouldn’t be surprised if other allies ask serious questions about America’s credibility.