On the morning of February 28, Israel and the United States attacked Iran. They presented this as a step aimed at neutralizing the threat to their security and disrupting the Iranian nuclear program.

Iran, in turn, attacked US allies in the Middle East. As a result of this conflict, military bases, energy facilities, giant factories, airports, various infrastructures, ports, etc. are under attack.

Following the Iranian air strikes, Qatar's state-owned oil and gas company Qatar Energy announced on March 2 that it would stop producing liquefied natural gas. This led to a sharp increase in gas prices in Europe and Asia. Qatar Energy, according to various sources, is the largest producer of liquefied gas in the world.

As a result of the escalation of the conflict, oil prices are rising worldwide. Against the backdrop of the US and Israeli war against Iran, the main news items are events related to the Strait of Hormuz. This strait lies between Oman and Iran. The Strait of Hormuz is one of the most important arteries for the global economy, transporting oil and liquefied gas. 20% of the world's oil supplies pass through this strait. Already today, on the morning of March 4, Iran announced that it has full control over the strait, and any ship attempting to pass through it may be hit by missiles or drones.

"In the context of all this, the risks threatening Armenia are primarily security-related. As for the energy sector, Armenia will be affected primarily by a possible increase in gasoline prices, a slowdown in Armenian-Iranian energy projects, and obstacles to the import of goods from Iran to Armenia. However, internal energy security issues will not arise soon," energy security expert Artur Avetisyan said in an interview with Hetq.

Avetisyan says since the volumes of gas imported from Iran to Armenia are not large, therefore, these events cannot have a significant impact on the price of gas consumed in Armenia.

“If the main supplier of gas to Armenia is Russia, with which we have a long-term contract and a gas price increase is not expected, then the prices of oil products, gasoline, diesel fuel may increase, since the international market has a direct impact on Armenia. No peace can help if this lasts for a long time,” says Avetisyan.

The main supplier of gasoline to Armenia (more than 60%) is Russia. Armenia also imports gasoline from Malta, Bulgaria, Romania, etc.

The main supplier of natural and liquefied gas is also Russia. Iran accounts for 20% of the natural gas imported to Armenia.

“Armenia is currently not affected by increases in international gas prices. Now, the European market is suffering, which has announced that it is abandoning Russian gas, and Qatar should be the main supplier for them. This may indirectly affect our economy in the form of inflation at the expense of imported goods, but not directly through the price of gas,” says Avetisyan.

Iranian media announced yesterday that the export of food and some agricultural products from Iran has been banned, which may also affect the Armenian market.

Armenian-Iranian trade data allow us to draw certain conclusions.

In trade with Iran, Armenia is mainly an importer: mainly electricity is exported

According to 2025 data, Armenia exported goods worth $88 million to Iran and imported goods worth $680 million. As we learn from the Statistical Committee of the Republic of Armenia, compared to 2024, exports from Armenia to Iran decreased by 18.3%. Instead, imports increased by 8.1%.

Since 2021, Armenian imports from Iran have grown sharply, while exports stay low.

According to 2025 data, Iran's share in Armenia's exports is 1%, in imports - 5.2%.

At the heart of Armenian-Iranian trade is the "Gas for Electricity" program. Since 2009, Armenia has been cooperating with Iran on the principle of electricity exchange - we give electricity, we receive gas. Armenia gives Iran 3 kWh of electricity for 1 cubic meter of gas. The terms of the program are periodically extended.

If this program didn’t exist, it can be said that Armenian products would have almost no demand in Iran.

According to the latest data of Armenia’s Customs Service, in the first half of 2025 (annual data are not published), goods worth $45 million were exported from Armenia to Iran, almost 80% of which is electricity.

Armenia has exported a small amount of copper concentrate to Iran, as well as hygiene products (napkins, cotton products, etc.) and construction equipment (road graders, loaders, and bulldozers) that it imported from another country and re-exported.

Is the construction of the 3rd Armenia-Iran high-voltage power transmission line in danger?

According to Avetisyan, the most important program of Armenia-Iran energy cooperation now is the construction of the 3rd Armenia-Iran high-voltage power transmission line. The Armenian government regularly promises to complete the construction in the shortest possible time. It is expected that after the commissioning of this line, it will be possible to triple the volume of electricity exports from Armenia to Iran.

Avetisyan is in no rush to decide if events in Iran will impact the construction of the line. The outcome hinges on how long and severe the conflict becomes. Regardless, risks remain.

“We currently have more installed capacities than we export. The reason is limited infrastructure. If this situation in Iran continues, there is a risk that the completion of this construction will be delayed, although it is on the territory of Armenia. Regardless of the course of the conflict, I think that Iran will always have a demand for electricity exported from Armenia. Politicians are discussing that one of the worst-case scenarios is the dismemberment of Iran. In that case, such programs may be reconsidered, but everything depends not only on the duration of the war, but also on its intensity, on the damage that both sides suffer. It may last a week, but it will cause such damage that it will take a long time to recover,” Avetisyan says.

He believes that although the suspension or slowdown of such programs may harm the Armenian economy, at least for now there is no energy security problem.

In July 2025, when the conflict between Iran and Israel escalated again, discussions about energy security and the risks that Armenia could face intensified in Armenia. According to the UN National Expert on Energy Ara Marjanyan, in such cases, the prospects for the current energy cooperation and expansion between Armenia and neighboring Iran are clouded, but there are no security issues in the Armenian domestic market, either in terms of gas or electricity.

Instead, as then and today, it is not ruled out that imports from Iran to Armenia will slow down and lead to an increase in the price of some goods in the Armenian market.

From gas to iron bars to butter: Imports from Iran to Armenia are more diversified

According to the latest data published by Armenia’s Customs Service, in the first half of 2025, Armenia imported $304 million worth of goods from Iran.

Unlike exports, imports are quite diverse. The number one product imported from Iran to Armenia is gas (see the infographic below, although there is no gap in the statistics, in fact, the overwhelming majority of this is natural gas).

Up to 20% of natural gas imported to Armenia comes from Iran: what are the risks in the context of the Iran-Israel conflict

Armenia imports a significant amount of construction products from Iran, such as iron and steel bars, cement, rolled products, bitumen, tiles, etc. Molybdenum concentrate, petroleum products (presumably diesel fuel), milk and cream, butter, citrus fruits, and vegetables are also among the leading imported goods.

There are goods imported into Armenia, the vast majority of which come from Iran. For example, 92% of cement imported into Armenia in the first half of 2025 came from Iran.

“Our overland trade is conducted through Georgia and Iran. 20-25% of Armenia’s foreign trade passes through Iran. If the current situation in Iran lasts for a long time, this may cause problems for Armenia’s trade turnover. Several goods imported from Iran are advantageous to the Armenian consumer in terms of price-quality ratio. If the import of goods of Iranian origin and other countries entering Armenia through Iran slows down or stops, their alternatives in the Armenian market, including local products, may be more expensive and inferior in quality, first, in terms of construction products. This, in turn, may harm the construction sector,” says Avetisyan.

Since Iran has already announced a ban on the export of agricultural products, experts do not rule out that this will also negatively affect the Armenian market soon and lead to inflation.

The ongoing conflict has also involved the United Arab Emirates, with which Armenia's trade has grown rapidly in the last three to four years, due to re-exports. Money transfers are also being made from the UAE to Armenia and vice versa. It is not ruled out that this conflict will also have a negative impact on Armenia-UAE economic relations.

Armenia is also expected to experience migration flows from Iran, foreign exchange fluctuations, the impact of the increase in the international price of gold due to this situation, and many other factors, which are still too early to assess.

Earlier, in an interview with Hetq, National Academy of Sciences member Ruben Safrastyan noted that Armenia must be vigilant and ready for all kinds of developments, including the closure of the road with Iran, which will have grave consequences for the Armenian economy, and a large influx of refugees from Iran.

Top photo: Tehran, March 2, 2026. (AP Photo/ Vahid Salemi)