The summer of 2026 became for Armenia not merely a period of intense diplomatic activity, but a moment when the contradictions between political expectations and economic reality became particularly evident. While Brussels is offering Yerevan new trade opportunities, financial support, and deeper political dialogue, Moscow is demonstrating that it still retains key levers of influence over the Armenian economy. Under these circumstances, the central question is no longer whether Armenia should choose between Russia and the European Union, but whether it will be able to build a foreign policy based on the diversification of partnerships rather than dependence on a single center of power.

Within days after the parliamentary elections, Armenia was visited by the President of the European Commission, Ursula von der Leyen, who reaffirmed the EU's readiness to expand economic cooperation with Yerevan. Afterwards, Prime Minister Nikol Pashinyan traveled to Russia, where he held talks with Russian Prime Minister Mikhail Mishustin. The sequence of these visits clearly demonstrated that Armenia continues to seek a balance between two foreign policy vectors, each of which offers its own model of cooperation while simultaneously shaping its own expectations toward Yerevan.

The Crisis of Trust Did Not Begin Today

The cooling of Armenian-Russian relations began long before the current trade dispute. For a significant part of Armenian society, the turning points were the events of recent years: the 44-day war of 2020, the hostilities on the sovereign territory of Armenia in 2022, the months-long blockade of the Lachin Corridor, and the subsequent mass exodus of the Armenian population of Nagorno-Karabakh in the autumn of 2023.

Following these events, confidence in the previous security model based on the strategic alliance with Russia declined significantly. Many in Armenia expected that Russia's military presence and the mechanisms of the Collective Security Treaty Organization (CSTO) would prevent further escalation; however, these expectations were not fulfilled. For this reason, the search for new foreign policy and economic partners gradually evolved from a subject of political debate into one of the key priorities of Armenia's state policy.

From the Russian perspective, the current disagreements are the result not only of the events of 2020–2023, but also of Yerevan's gradual shift in foreign policy and its growing rapprochement with Western partners.

A European Window of Opportunity

On July 1–2, Ursula von der Leyen visited Yerevan for the second time in two months following the Armenia-EU Summit held in May. For the South Caucasus, Brussels announced a Global Gateway package of up to €200 million for connectivity projects and an additional €20 million for a peace support program. Separately for Armenia, the EU announced duty-free access for 80% of Armenian exports to the European market, in addition to the €52 million assistance package announced in June. Von der Leyen also praised Armenia's progress in visa liberalization, while Prime Minister Pashinyan expressed hope that a visa-free regime with the EU could be achieved by 2029.

Nevertheless, even European experts caution against overestimating the significance of these steps. According to British analyst Thomas de Waal, the ongoing developments do not mean that Armenia is abandoning cooperation with Russia. Rather, they represent a gradual diversification of the country's foreign policy and economic ties. This is why European support is currently viewed more as an instrument of gradual diversification than as an alternative to Armenia's existing relations with Russia.

The Italian analytical center "SpecialEurasia" points to the structural limits of this strategy: Armenia's energy system remains approximately 90% dependent on Russian natural gas, while the Metsamor Nuclear Power Plant continues to be operated by Rosatom. At the same time, the country's trade remains structurally linked to the Eurasian Economic Union (EAEU). In other words, in the medium term, Brussels is unlikely to be able to fully replace Russia as Armenia's principal economic center of gravity.

Russian state media have emphasized precisely this gap. "Rossiyskaya Gazeta" noted that despite the announcement of duty-free access for 80% of Armenian exports, no EU member state has yet expressed interest in purchasing Armenian brandy or tomatoes. Meanwhile, Russian Foreign Ministry spokesperson Maria Zakharova described Armenia's participation in the EAEU as merely a temporary stage on its way toward joining a bloc that Russia considers unfriendly.

As political scientist Sergey Minasyan notes, Armenia's European course should primarily be viewed as a project of the country's internal modernization rather than the replacement of one foreign policy partner with another. The success of this course will depend on Armenia's own willingness to implement institutional reforms, rather than on decisions taken in Brussels.

Richard Giragosian, Director of the Regional Studies Center in Yerevan, also believes that European support opens new opportunities for Armenia. However, he argues that the reorientation of the country's economy cannot happen quickly. Entering the EU market will require Armenian producers to adapt to higher quality standards, restructure logistical supply chains, and make substantial investments. Therefore, even if European initiatives are implemented successfully, their impact will be gradual rather than immediate.

Economic Pressure as an Instrument of Policy

Almost simultaneously with the intensification of dialogue between Armenia and the European Union, Moscow demonstrated that it still retains significant leverage over the Armenian economy. A decision by Russia's Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor), effective from June 12, 2026, restricted the import into Russia and the transit through its territory to other Eurasian Economic Union (EAEU) member states of all quarantine-controlled products from Armenia. The ban covered Jermuk mineral water, alcoholic beverages, vegetables, fruits, herbs, and fish products, becoming one of the most sensitive signals for Armenian exporters.

At the same time, Russia remains Armenia's largest supplier of natural gas and one of its principal trading partners, which explains why both sides continue to avoid steps that could lead to a complete rupture. It would therefore be premature to argue that the European Union is already in a position to replace Russia. Meanwhile, Russia continues supplying Armenia with grain, fertilizers, and propane via transit through Azerbaijan, along a route reopened in the autumn of 2025. Shipments along this corridor have exceeded 36,000 tons of grain, around 8,000 tons of fertilizers, and more than 1,000 tons of propane. The selective nature of Russia's pressure — targeting export rather than import flows — appears to be a deliberate policy rather than a comprehensive blockade.

An Alternative Perspective

At the same time, considerably more critical assessments are being voiced within the Armenian expert community. Yerevan-based political analyst Grant Mikaelyan believes that one of the main objectives of Prime Minister Nikol Pashinyan's visit to Moscow was to seek a relaxation of Russian restrictions on Armenian exports, as well as to receive a political signal that Moscow was prepared to continue a full-fledged dialogue with the Armenian leadership following the parliamentary elections.

"At this point, it is already obvious that no success was achieved on either of these issues", the expert argues.

Mikaelyan notes that despite statements describing the talks as constructive, the two sides failed to present any concrete results publicly, while the trade restrictions on Armenian products remain in force. In his view, the current crisis may no longer be tactical but long-term in nature and could ultimately lead to a revision of certain areas of Armenian-Russian cooperation.

July 27: A New Stage of Escalation

The chronology continued immediately after Pashinyan returned from Yekaterinburg. At the initiative of the Armenian side, he held a telephone conversation with Russian President Vladimir Putin. It was the first contact between the leaders of the two countries following the parliamentary elections and the first attempt to discuss the emerging trade and economic crisis at the highest political level.

According to the Armenian government, during the conversation Pashinyan emphasized that the restrictions imposed by Russia on Armenian exports contradicted both bilateral agreements and the rules of the Eurasian Economic Union. The Prime Minister asked Vladimir Putin to facilitate a prompt resolution of the issue, stressing that such matters should be addressed in the spirit of partnership and allied commitments.

However, later that same day, July 27, the Kremlin issued its own statement, in which the emphasis was placed very differently. The issue of trade restrictions — the central concern for Yerevan — was not mentioned at all in the Russian version of the conversation. Instead, Moscow focused on Armenia's European foreign policy trajectory. Vladimir Putin recalled the joint declaration adopted by the leaders of the EAEU member states on May 29, 2026, and stressed that any possible accession of Armenia to the European Union should be decided exclusively through a nationwide referendum. In response, Nikol Pashinyan stated that such a referendum could only take place after Armenia had officially submitted an application for EU membership, which has not happened to date.

These markedly different interpretations of the same conversation clearly demonstrated the divergence in political priorities between Moscow and Yerevan. For the Armenian side, the central issue remained the lifting of export restrictions and the restoration of the normal functioning of the common EAEU market, whereas the Russian side publicly chose to emphasize Armenia's geopolitical orientation.

Speaking about the Russian restrictions on Armenian exports, Nikol Pashinyan stressed that this was not merely a bilateral issue but one concerning the functioning of the Eurasian Economic Union itself.

"In fact, it turns out that the EAEU is paralyzed and no longer functioning. If this issue is not resolved promptly, allow me to suggest that this could become the beginning of the end of the EAEU", the Prime Minister stated. When asked whether the Armenian government was considering an earlier withdrawal from the EAEU, Pashinyan replied: "No, we have no such plans".

Equally noteworthy is the fact that, by the end of July — almost two months after the parliamentary elections — Vladimir Putin had still not congratulated Nikol Pashinyan on his electoral victory. Against the backdrop of continuing trade restrictions and the absence of concrete agreements on economic issues, many experts regard this as an additional political signal of the continuing tensions in Armenian-Russian relations.

On the evening of July 27, the dispute escalated further in practical terms. Rosselkhoznadzor announced that it had prevented the import into Russia, via Belarus, of more than 39,000 Armenian roses, which had been declared in the accompanying documentation as non-alcoholic beverages. This incident supplemented the restrictions already in place since May 22 on Armenian flowers, as well as the bans introduced on June 12 covering the import and transit of fruits, vegetables, beverages, fish products, and dairy products.

The following day, July 28, another significant development occurred. Following a three-day visit to Iran, Armenia's Minister of Territorial Administration and Infrastructure, David Khudatyan, announced that the two sides had reached a verbal agreement to at least double supplies of Iranian natural gas to Armenia under the "gas-for-electricity" program. Against the backdrop of continuing pressure from Moscow, the agreement appeared to represent yet another attempt by Yerevan to expand its room for maneuver in both energy and foreign economic policy, although experts note that implementing such plans without taking Russia's position into account would be extremely difficult.

Thus, the events of July 27–28 marked the culmination of the July phase of Armenian-Russian relations. They demonstrated that the economic disagreements had moved well beyond phytosanitary disputes and were increasingly taking on political and geopolitical dimensions.

Iranian Gas: The Hidden Agenda Behind Contacts with Moscow

Economist Sos Khachikyan believes that the sooner Armenian-Russian relations adapt to the changing geopolitical environment, the better it will be for both sides. However, if Russia continues attempting to assert itself through pressure and harsh rhetoric, its own role in the future regional architecture surrounding Armenia risks becoming more limited.

According to Khachikyan, Armenia's negotiations with Iran on natural gas extend beyond a purely bilateral agenda and imply a broader international consensus. In addition to expanding gas supplies for domestic consumption, the discussions also concern the possible transit of Iranian gas through Armenia to international markets.

"If supplies of Iranian gas through Armenia to international markets indeed become a reality, this will mean that the necessary international consensus has already been reached", Khachikyan emphasized, adding that the issue was likely discussed both during Sergey Lavrov's meeting with Abbas Araghchi in Moscow and during Pashinyan's conversation with Putin on July 27.

On July 28, this issue received direct confirmation. Following his three-day visit to Iran, Minister of Territorial Administration and Infrastructure David Khudatyan announced that the parties had verbally agreed to at least double supplies of Iranian natural gas under the "gas-for-electricity" program, while the construction of a new 400-kV high-voltage transmission line is expected to be completed by the end of the year.

Khudatyan insisted that the decision was unrelated to Russia. However, the Armenian section of the gas pipeline has been under the control of Gazprom since 2015, and according to expert assessments, increasing the volume of Iranian gas without Russia's consent would be impossible. Interest in the Iranian route intensified amid warnings from Moscow about a possible increase in the price of gas supplied to Armenia. According to media reports, Putin personally conveyed this warning to Pashinyan. Russia currently supplies natural gas to Armenia at $177 per thousand cubic meters, compared with approximately $600 in Europe.

 

The principal outcome of recent years has been Armenia's entry into a new stage of foreign policy formation, in which balancing relations among different centers of power is becoming not a temporary tactic but a long-term strategy. The events of 2020–2023 significantly reshaped public opinion and compelled Yerevan to seek new formats of international cooperation. However, this does not mean that Russia has ceased to play a key role for Armenia.

The long-term stability of the Armenian state will largely depend on Yerevan's ability to combine its relations with the European Union, Russia, and other international partners.

Journalist

Marine KHARATYAN

#ARMENIA

30.07.2026 07:57