The peace deal between Armenia and Azerbaijan, signed under the auspices of President Trump on August 8, 2025, in Washington, D.C., marks an important step toward greater stability in the South Caucasus, reads an article by Layla Ali, a senior research fellow at the Gulf Research Center, Report informs.
For the Gulf states, the agreement carries significance beyond the immediate region, opening pathways into a geostrategically vital corridor linking Europe and Asia, she wrote.
"The South Caucasus is central to the so-called Middle Corridor, the trans-Caspian route connecting China to Europe via Central Asia, the Caspian Sea, the Caucasus, and Türkiye. For Gulf states, this corridor is not only a matter of economic opportunity but also of strategic resilience. As tensions persist in the Red Sea and the Suez Canal remains a chokepoint vulnerable to disruption, as seen during the 2021 Ever Given crisis that blocked the Suez Canal and more recent Houthis-linked threats, diversification of trade routes has become a strategic necessity. The Gulf’s long-term economic visions explicitly emphasize global logistics leadership, and the Middle Corridor aligns with these ambitions," reads the article.
For Gulf sovereign wealth funds and logistics firms, the Caucasus region also offers a promising arena for investment in ports, railways, and logistics hubs, according to the author.
"Energy is another dimension where Gulf perspectives converge with the peace dividend. The South Caucasus is already a critical transit route for Caspian hydrocarbons, particularly Azerbaijani oil and gas flowing westward to Türkiye and Europe. As Europe seeks to diversify away from Russian energy, Azerbaijan’s role grows, and by extension, so does the significance of secure transit through the Caucasus. A stable Armenia–Azerbaijan relationship strengthens the security of these routes and creates opportunities for Gulf states to align their strategies with the region’s energy potential. For example, Qatar’s LNG exports to Europe benefit from a diversified supply environment. At the same time, Gulf producers may find synergies in partnering with Azerbaijan on energy infrastructure, storage, and renewable projects, in line with their global push toward energy diversification."
Equally important, stability in Armenia–Azerbaijan relations removes one of the key political and security obstacles to the reliability of the Middle Corridor, making it a more attractive proposition for Gulf investors, reads the article.
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