By Azerbaijan.US Editorial Board
As Iran enters 2026 amid large-scale protests, economic collapse, and mounting external pressure, much of the international discussion remains narrowly focused on sanctions, regime change, or U.S.-Iran confrontation. For the South Caucasus, however, the stakes are far higher – and far closer to home.
Iran is not a distant crisis. It is a nearly 100-million-strong state bordering Azerbaijan, deeply embedded in regional trade, security, and ethnic dynamics. Any serious destabilization inside Iran would not remain an internal matter. It would immediately spill across borders, reshaping the security environment of the entire South Caucasus.
Beyond economics: a systemic crisis
The protests that began in late December were triggered by a sharp collapse of the Iranian rial, driven by renewed sanctions and the near-halt of oil exports – Tehran’s main source of foreign currency. What started as an economic revolt among merchants and small traders quickly evolved into broader political unrest, drawing in students and urban professionals.
This pattern is familiar. Iran has experienced waves of protests before – in 2017–2018 and again in 2022–2023. What makes the current moment different is the convergence of three pressures at once: economic exhaustion, regional isolation, and open external signaling from Washington that it sides with the protesters.
Such convergence significantly raises the risk of prolonged instability rather than quick containment.
Why this matters for Azerbaijan
For Azerbaijan, the consequences of a destabilized Iran would be immediate and tangible.
Iran is a multiethnic state, home to millions of ethnic Azerbaijanis – by some estimates, more than the population of Azerbaijan itself. In a scenario of state fragmentation or prolonged chaos, mass displacement toward the north would be almost unavoidable. No border infrastructure in the region is designed to absorb flows of that scale.
Security risks would follow. Iran possesses a vast military stockpile, including drones, missiles, and advanced weapons systems. The collapse of centralized control would raise the specter of weapons leakage, criminal networks, and uncontrolled armed actors operating near Azerbaijan’s southern border.
These are not abstract fears. The region has already seen how state failure – from Iraq to Libya — produces long-term instability rather than democratic renewal.
The illusion of “managed collapse”
Some external actors appear to view Iran’s internal crisis through the lens of opportunity: pressure the regime, encourage unrest, and wait for change. This approach ignores geography.
A weakened or fragmented Iran would not become a neutral vacuum. It would become a source of chronic instability stretching from the Persian Gulf to the Caspian basin. For the South Caucasus, this would mean heightened security costs, disrupted trade routes, and constant uncertainty along critical borders.
From Baku’s perspective, the worst-case scenario is not the continuation of Iran’s current political system, but a sudden collapse that unleashes forces no regional actor can control.
No winners in chaos
None of this implies support for repression or denial of Iran’s internal problems. The economic grievances driving today’s protests are real, and Iran’s leadership faces deep structural challenges. But history shows that externally encouraged regime breakdown in complex, armed societies rarely produces stability.
For Azerbaijan and its neighbors, the priority is not ideological alignment but regional predictability. Stability in Iran – however imperfect – remains a lesser risk than fragmentation, civil conflict, or prolonged unrest fueled by external pressure.
A regional interest, not a distant story
As 2026 unfolds, Iran’s crisis should not be treated as a distant headline or a proxy battleground for global powers. For the South Caucasus, it is a direct security concern with no easy exit ramps.
Any strategy that ignores this regional reality risks turning Iran’s internal turmoil into the next major source of instability on Azerbaijan’s doorstep – a price the region can ill afford to pay.
