Armenia’s Not Getting Off the Struggle Bus Just Yet

Armenia’s landlocked position between Turkey, Russia, Azerbaijan and Iran has left Yerevan with few good options in the post-Soviet world. Armenia is one of Eurasia’s least-economically vibrant states; the fact that they bisect regional arch-enemy Azerbaijan in half doesn’t help, neither does their history with Turkey.

For decades, Armenia believed that aligning itself with post-Soviet Russia would help solve its chronic energy and security issues. Recent history—especially following Moscow’s invasion of Ukraine—has shown the limits of Russian cooperation. While Iran has unusually good ties with Armenia, Tehran has precious little of anything to offer anyone at this time.

So where does this place Yerevan? Sandwiched between two enemies to the East and West, and facing decaying regional powers to the North and South, Armenias last, best and only hope is to either completely capitulation to the whims of an energy-rich Azerbaijan or… throw a Hail Mary pass to the Americans. It would still involving selling out completely to an outside power, but for the Armenians that will not be anything new

Hey all, Peter Zeihan here, coming to you from Colorado. Today we’re going to talk about what is going on in relations between—or among—the United States, Russia, and Armenia.

Now, Armenia is a small country in the Caucasus Mountains, sandwiched between Russia and the former republic state of Georgia to the north. Down south you have Iran. To the east you have Azerbaijan, which is a close political, economic, and cultural ally of Turkey, which is to the west.

So, landlocked, not a lot going on. Its population has fallen in the post-Soviet period to now about four million people. It is one of the most economically destitute parts of the Eurasian world, and there has really been no meaningful prospect for the place to improve its situation.

The core issue is one of identity. The Armenians see themselves as besieged by Muslims and Turks in all directions, and so they have basically relied upon the Russians to provide a degree of security cover for them ever since they broke away from the Soviet Union when it collapsed in the early 1990s.

The problem is also military. Turkey could wipe Armenia off the face of the earth in a matter of a few weeks with a military campaign, should it come to that. And Azerbaijan, which used to be completely incompetent militarily, defeated Armenia in a war a few years ago using Turkish drones, which basically obliterated the entire Armenian military in a matter of a couple of weeks.

So it is largely defenseless. It has nothing economically going on for it. And with the Russians now locked down, they didn’t come to Armenia’s aid when the Azerbaijanis attacked. We basically had a situation where the Armenians are completely out of luck, which means they’re in the wind.

Because what has been happening until this moment is that the Russians quietly encouraged the Armenians to invade Azerbaijani state territory on multiple fronts. That has all been rolled back in just the last couple of years now, and that is no longer an option.

And if Armenia is able to fold itself into any other economic and security paradigm, then the Russian position in the Caucasus basically goes to zero. So there are a lot of reasons for a lot of countries to be very, very interested in what’s going on here. And this is why U.S. Vice President J.D. Vance was there a couple weeks back in order to see what could be agreed to.

And the issue it basically comes down to is whether you can keep the electricity on. Because if you can’t, then nothing else really matters.

So, Vance signed some agreements with the Armenians on nuclear power. Why nukes? Well, back during the Soviet days, the Soviet Union installed a nuclear power reactor outside of the capital of Yerevan. And even today it provides most of the power for the country.

It is generally considered to be the least safe nuclear reactor on the planet, complete with gaps in the reactor shell and the outer casing of the buildings so that the climate can just come right in—complete with tree roots.

The Armenians, however, have no money to update it, no money to put in a new power plant, and the Russians have been providing them with nuclear fuel to keep the country functional. So the question now is whether or not this thing can be repaired or replaced.

There is no infrastructure in place to put in any other type of power plant unless you’re going to do it from scratch. And then you have to get the fuel to a landlocked country that considers itself in a state of near de facto war with Azerbaijan, which is really the only place the energy could come from.

So really, this can only go one of two ways.

Number one: Armenia throws itself at Azerbaijan’s mercy, agrees to everything that Azerbaijan is even thinking about without exception, and in doing so gets a natural gas pipeline into the country. They build a couple of natural-gas-burning power plants, and then they are forever dependent upon the country that they see as their single largest enemy.

Or option two: they get a new nuclear power plant and have a degree—a modicum—of independence, probably with fuel supplies from the United States.

The problem here is that Armenia has no money at all. And if they were able to replace their nuclear power plant, they would have paid the Russians to do it 10 years ago, 20 years ago, 30 years ago. So if this is going to happen, the United States is going to have to pay for almost all of the plant, and then the Armenians can probably pay for the fuel.

Will that happen? That remains to be seen. But the bottom line is Armenia is now officially for sale to the United States. And if the United States wants to spend two, three, four, six billion dollars to just buy a country and lock it into the American orbit, this would be the cheapest way to do it.

We’ll still have to do that in league with the Turks, because the Turks control the entire western periphery. Most meaningful access between Armenia and the rest of the world either has to go north through Georgia and out, or through Turkey.

If—if—if—if—an American administration, this American administration, decides to make that decision, then relations with the Turks become very, very important.

But the leader of Turkey these days, a guy by the name of Erdogan, who has been in charge since 2001, I think, has a very Trumpian approach to the world, especially when it comes to the Europeans. And so there is a stable basis, for the moment, to work within bilateral relations in a way that really doesn’t exist between the United States and any other country in the world.

So, I am cautiously optimistic. Just keep in mind that this would not be free. And it does involve the United States investing in nuclear technology in a country that is so poor that any aspect of this is going to be a proliferation risk.

So you are going to see a lot of different levers of American power come together if this is going to work, in addition to a not insignificant amount of cash.