ArmeniaNow -- Sanctions against Iran, oil embargo, and threat of war, challenge Armenia making the prospect of freezing economic projects with their southerly neighbour seem “the least of evil”.

In the event tensions keep growing in the region, Azerbaijan is likely to resort to more provocations against Armenia.

“In the worst-case scenario Azerbaijan might take advantage of the situation and spur a new war, and try to settle the issue in their favor,” says senior researcher at Armenian National Academy of Sciences Gohar Iskandaryan, who specializes in Iranian studies.

This opinion is shared by other Armenia-base specialists in Eastern Studies as well, however, an American expert Matthew Kroenig, in 2011 special adviser to the Chief of Staff at US Department of Defence, in his interview to MediaMax assured that the sanctions would not give such a green light to Azerbaijan.

“I understand Armenia's concern with this very important issue, but I do not see any reason why Azerbaijan's decision to fight over Nagorno Karabakh would be affected by a U.S. strike on Iran's nuclear facilities,” said Kroenig.

Nonetheless the decision to impose oil embargo made in Brussels on December 23 has deepened concerns, because due to oil prices going up (as an after-effect of embargo 30-35 percent price hike is predicted) the chances of getting richer might boost Azerbaijan’s hopes to change the status quo.

“Increase in prices for oil cannot help but bother Armenia, as every extra penny will be spent on boosting Azerbaijan’s military budget,” says Yerevan State University (YSU) professor, economist Karlen Khachatryan.

Armenia being in a blockade by two of its neighbor countries – Turkey and Azerbaijan – has high hopes for cooperation with Iran and European and American structures turn a blind eye to it, taking into account Armenia’s closed borders.

Nonetheless, experts do not exclude a possibility that sooner or later the West might adopt “who’s not with us, is against us” policy and Armenia would have to choose “with whom” to go.

“Naturally, both the USA and Europe are well aware of the fact that Armenia is in a two-sided blockade and that Armenia will be choosing ‘her road of life’ rather than simply an exit to the seashore, and in the event of any concessions our authorities have to demand an alternative,” says Vardan Voskanyan, deputy dean of YSU Faculty of Eastern Studies.

However, Voskanyan believes that this is the best time for Iran to come to understand how important Armenia is for Iran and the chances are high that rather than freezing the projects, it would do the opposite.

“Ever since the construction of the Iran-Armenia gas pipeline no other major project has been carried out mainly because of the obstacles and procrastination on the part of Iran. For example, if the oil pipeline were operating now Iran would have had another exit from oil embargo through Armenia,” Voskanyan told ArmeniaNow.

Perhaps it was out of these considerations that during Mahmoud Ahmadinejad’s one-day visit last December (right after the imposition of sanctions), the two presidents instructed their respective ministers to put all their efforts into transferring the strategically important projects of building hydropower plants on the River Arax, as well as the railway to connect the two countries and the Iranian-Armenian oil pipeline “to actual execution stage”.

“Logic dictates that the Iranian side will start working with Armenia more actively, however, if it’s forced into facing social issues because of losing oil money, it cannot implement the promised projects at the expense of cutting social expenses,” says Voskanyan, adding that there might be a roundabout way - Iran might involve other means, namely attract foreign investment.