Iran’s growing influence in the Black Sea region: Consequences and Western responses

This article is part of an MEI strategic initiative that examines how to enhance regional cooperation between the United States and its partners on addressing the challenges posed by Iran across the region, particularly in key areas like Lebanon, Syria, Iraq, Yemen, Israel-Palestine, and the Ukraine war. Through a series of articles, short papers, events, podcasts, and a final policy report, the initiative will showcase a broad range of viewpoints and subject-matter expertise to inform a holistic and resolute approach toward Iran.
 

Russia’s Primakov Center neatly and accurately sums up the motivation driving Moscow and Tehran to draw ever closer: “With increasing sanctions and military pressure from the West, along with efforts to isolate Russia and Iran globally, the national interests of Moscow and Tehran have become more closely aligned. Both countries are working together to push back against sanctions and political pressure, while expanding their trade, economic and defense cooperation. This has set the stage for a growing strategic partnership.” That tightening relationship with Russia — and the international dynamics driving it — have created an opening for Iran to expand its influence far beyond the Gulf and Levant, where, until recently, it has been most active.

Russia’s full-scale war against Ukraine, now approaching its third year, has provided several strategic opportunities for Iran to increase its foothold in the Greater Black Sea Region (GBSR). The GBSR not only includes the Black Sea basin and littoral itself but also extends across the Caucasus and reaches the Caspian Sea — areas where Russian and Iranian interests and influence had already overlapped. That increased regional foothold has materialized in two notable ways. First, Iran has effectively become a direct participant in the Russo-Ukrainian war and one of Russia’s most valuable partners in the GBSR because of Tehran’s valuable experience with sanctions evasion and indispensable ability to deliver banned weapons to the Russian war machine. Second, Iran has been eyeing and at times even attempting to fill regional power vacuums that opened up over the past several years due to Russia’s preoccupation with its military efforts in Ukraine on the one hand and the West’s indecisiveness on the other. Both aspects of Iran’s growing influence in the region have created mounting costs and threats for the transatlantic alliance. A closer analysis of Iran’s deepening footprint in the GBSR is, therefore, necessary to inform how the next administration in Washington and the new European Commission can strengthen and better coordinate their policy responses.

Russia-Iran relations bolstered by war

Traditionally, Iran had not been a significant player in the western part of the extended Black Sea region. The reasons are twofold: Tehran had been wary of overstepping in the GBSR, a geopolitical space that it views as dominated by Moscow, and which Russia refers to as its “near abroad.” Second, Iran’s power projection resources are very limited, especially given the sanctions regime imposed by the West, and had tended to be directed southward in support of its sectarian proxies such as Hezbollah, Hamas, and the Houthis. Until recently the world’s most sanctioned country, Iran has been strategically dependent on a limited number of partners, making the relationship with Russia all the more important. Tehran relies on Moscow particularly for political support in the United Nations and other international forums as well as for access to advanced military and nuclear technology. Iran’s military relationship with Russia was carefully developed over years of intense cooperation in Syria; and in time, it has extended to solidifying Russian support for Tehran’s most important regional proxies. Russian weapons have been found among Hamas and Hezbollah, while US intelligence has assessed Russia is also providing arms and limited assistance to the Houthis.

Iran’s relationship with Russia has long been an unequal one, with the former embodying the junior partner and dependent on Moscow’s goodwill. Negotiations with the West over Iran’s nuclear program were emblematic of this power dynamic — Russia has been providing technical knowhow to Iran but also playing the role of a negotiating power. Yet after Russia’s full-scale invasion of Ukraine in 2022, the relationship kicked into high gear as Iran’s strategic importance to the Kremlin suddenly magnified.

Because of its escalated aggression, Russia lost its privileged access to the West and overtook Iran as the most sanctioned country on Earth. Iran’s ability to provide Moscow with unique knowledge and experience in evading sanctions, backed up by robust deliveries of restricted goods, highlighted Iran’s value and solidified the relationship. In one crucial example, Moscow learned quickly from Iran’s experiencing of using a “ghost fleet” to deliver oil to China and assembled its own illicit armada.

Iran has also been delivering essential military aid to support Russia’s aggression against Ukraine, making the Middle Eastern state an active participant in the war in the Black Sea region. Iranian kamikaze Shahed-136 drones, launched by Russian forces, continue to wreak havoc on the front lines and terrorize the Ukrainian population. And Iranian-made drones that periodically stray into neighboring North Atlantic Treaty Organization (NATO) airspace and sometimes crash on NATO soil, have forced Romania and its allies to scramble dozens of jets. But this military support to Moscow is not purely material: Iranian drone instructors were reportedly deployed to Russian-occupied Crimea as far back as the latter half of 2022. And Iran is now helping Russia build its drone models in Tatarstan, while having additionally delivered short-range ballistic missiles to its partner.

Iran filling the vacuum in the South Caucasus

Iran and Russia have been competing on and off for centuries for control and influence in the South Caucasus, today comprising Georgia, Armenia, and Azerbaijan; and although Tehran’s ties there have not been particularly robust in recent decades, they are deepening. In the 20th century, Tehran stepped away from the region, leaving it largely to Moscow during and after Soviet occupation. Of the three regional states, Iran has remained closest to Armenia but pointedly stayed out of the latter’s armed conflicts with Azerbaijan over Karabakh in 2020 and 2023. Azerbaijan’s close ties to Israel have raised concern in Tehran, but not sufficiently to stop the two Caspian littoral neighbors from cooperating on various joint or regional projects, such as the cross-border Qiz Qalasi Dam or the International North-South Transport Corridor (INSTC).

Since early 2022, Russia’s full-scale invasion of Ukraine and the West’s collective effort to support Kyiv have reduced the resources and attention either side could devote to the South Caucasus. This has opened up an opportunity for Iran to step into the void in the furtherance of its own strategic objectives. In Georgia, imports of natural gas from Iran skyrocketed, growing by 606.5% in 2023, year-on-year — although they remain fairly modest in absolute terms (73.28 tons). Politically, too, Georgia is moving closer to Iran. This past May, the country’s Prime Minister Irakli Garibashvili made an impromptu visit to Tehran for the funeral of President Ebrahim Raisi. He returned in July for the inauguration ceremony of Iran’s new president, Masoud Pezeshkian, accompanied in the Georgian delegation by his minister for development.

Armenia’s Prime Minister Nikol Pashinyan also attended both events in Tehran; but his country’s relations with Iran go beyond high-level diplomatic visits. In an attempt to distance itself from Russia and diversify its international partners, Armenia is participating in a new economy- and transit-focused trilateral cooperation format with India and Iran, inaugurated in Yerevan in April 2023. Recently, Armenia opened Iran’s “biggest trade center in the world” and vowed to increase bilateral trade. Armenia also allegedly signed a new military deal with its larger southern neighbor worth $500 million. Tehran, in turn, is reinforcing its ties with Yerevan by counterbalancing Baku in the disputed Zangezur corridor project.

Finally, although Azerbaijan and Iran have historically had a rocky relationship made worse by Azerbaijan’s support for Israel, the two countries are drawing nearer as well. In 2023, the Iranian government responded to a violent attack on the Azerbaijani embassy in Tehran by revitalizing attempts at rapprochement. Indeed, when President Raisi’s helicopter fatally crashed earlier this year, he was returning from a reconciliation mission to Baku, after having canceled a scheduled meeting in Yerevan. His successor, Pezeshkian, even announced his intention to attend the 2024 United Nations Climate Change Conference (29th Conference of the Parties, COP29) being hosted by Baku last month; though he ultimately declined to come because of the presence of a high-level Israeli delegation.

Iran’s twin strategic aims for the Greater Black Sea Region

Iran’s comeback in the South Caucasus and expansion of its influence across the GBSR is driven by twin strategic aims, which are physically materializing in the development of two corresponding transregional corridors. The first strategic aim is closer ties with Russia. Toward this end, the two countries are collaborating on the aforementioned INSTC, which connects India to Russia via Iran and Azerbaijan as an alternative to the longer and more expensive sea route via the Suez Canal. The attractiveness of this corridor has increased in recent years due to the heavy sanctions imposed on Iran and Russia as well as by the prospect of transit fees, from which both Iran and Azerbaijan stand to benefit. Despite being cash-strapped and heavily restricted by sanctions, Iran successfully completed the first transport of goods from Russia to India via this route in July 2022.

Iran’s second GBSR-oriented strategic aim is improved access to the wealthy European market. For that, Tehran is promoting the development of the Persian Gulf-Black Sea International Transport and Transit Corridor (ITC), a multimodal route from Iran via Armenia, Georgia, and across the Black Sea to European Union-member states Bulgaria or Romania. With trade between Iran and Turkey having stagnated in recent years due to sanctions and the COVID-19 pandemic, the ITC would open an alternative route for Iran into the European single market, via the South Caucasus, circumventing Turkish Anatolia entirely. It would also enable Iran to potentially earn transit fees from Indian exports to Europe traversing its territory.

Although Western sanctions continue to hinder Iranian economic access to the EU, the country has achieved some notable progress in recent years on improving the associated infrastructural and political bottlenecks. With Russian and Chinese aid, Iran is modernizing its railways. In June 2024 Tehran finalized a segment of the Rasht-Caspian Railway based on an agreement signed with Russia in May 2023. And in July of this year, Iran and China launched freight trains to inaugurate the first phase of the “China-Iran-Europe rail corridor.” Tehran has also made some diplomatic advances with Western counterparts, despite its increasingly active participation in Russia’s war on Ukraine and additional sanctions imposed by the EU. In 2023 and 2024, Bulgarian officials met with their Iranian counterparts and voiced a desire to expand bilateral economic ties.

Western pushback and recommendations for further action

To date, collective Western pushback against Iran’s expanding footprint across the Greater Black Sea Region has mainly been in the form of direct — and in the case of the United States, secondary — sanctions against Iran, Russia, and actors aiding Tehran and Moscow in their war efforts. The US and the EU have also established naval missions against the Iranian-backed Houthis’ attacks on Western maritime assets and global trade, which has primarily affected the European Union. On the former policy response, the EU has imposed targeted sanctions on Iran for shipping weapons to Russia and for the Iranian government’s human rights abuses at home. The US has coordinated with the EU and the United Kingdom in this effort, but it additionally imposed direct sanctions on Iranian entities and secondary sanctions on entities in third countries, including Turkey, for importing Iranian oil and for supporting Iran militarily; American financial restrictions also target Iranian proxies, such as the Houthis. The US is likely to seek ways to increase pressure on Iran under the second Donald Trump administration.

Brussels and Washington should work together — as well as with their regional partners and allies — to markedly strengthen and tighten the Iran sanctions regime to the benefit of their collective interests. First, the EU should, in coordination with the US, consider imposing sanctions on Iran’s military exports and extend secondary sanctions on countries aiding Iran’s military developments.

Second, the Iranian military threat to the European continent needs to be reassessed at the NATO level, given the advances in Iran’s access to stand-off offensive technology and specifically missiles, including through transfers from Russia. The North Atlantic Alliance’s ballistic missile defense system was designed to protect Europe from a possible Iranian threat, but a review of this collective-defense capability would have a reassuring effect on European allies and their strategic partners in the Black Sea region, thus further contributing to transatlantic cohesion when it comes to managing the threats stemming from Iran.

Beyond steps to establish a more harmonized transatlantic sanctions regime and shared threat and defense assessment, it is also necessary for both Washington and Brussels to develop a comprehensive appraisal of the harm caused by Iran’s aggressive actions and evaluate the associated costs incurred by the West. For example, the illicit trade conducted by the Iranian and Russian ghost fleets inflict enormous costs and environmental risks on the West. A more detailed understanding and calculation of the level of Russian sanctions evasion, including its monetary costs to the West, is a prerequisite to designing a more targeted and effective sanctions regime.

Likewise, the actions of Iran’s Yemen-based proxy in particular impose disproportionate costs on the West in terms of both the military expenditures necessary to defend against the Houthi drones and missiles as well as due to the spike in prices of imported goods caused by their attacks — whether successful or not — on international maritime shipping. Finally, Iranian drones are now regularly exploding on NATO territory in the vicinity of Ukraine. A shared understanding of the nature of these harms will enable the West to design means of defense and resilience that are both cost-effective and in line with Western interests.

Dr. Iulia-Sabina Joja directs MEI’s Black Sea Program and teaches European security as an adjunct professor at Georgetown University and George Washington University. Her research focuses primarily on European and Black Sea security.

Photo by ANONYMOUS/Middle East Images/AFP via Getty Images