The arrival of a Russian oligarch in the disputed enclave of Nagorno-Karabakh has added to escalating tensions in a volatile region where Moscow is struggling to maintain its influence.
Russian-Armenian billionaire Ruben Vardanyan was appointed last autumn as first minister in the South Caucasus enclave, which is claimed by both Armenia and Azerbaijan, but his longstanding ties with the Moscow elite have aroused suspicions in both Yerevan and Baku.
He has also done little to calm an intensifying crisis in the territory, where an Azeri blockade has left the majority Armenian population short of food, medicines and fuel. Observers say the embargo is a direct challenge by Baku to the influence of Moscow, which has been Nagorno-Karabakh’s security guarantor since a 2020 war.
“Vardanyan is . . . perceived as an element of the Kremlin’s strategy to gain greater leverage. His presence gives Moscow someone on the ground to influence policy,” said Richard Giragosian, director of the Regional Studies Center, a Yerevan think-tank.
Vardanyan, who relinquished his Russian citizenship before relocating to the enclave, denies such charges, saying he is motivated by patriotism for Armenia, his ancestral homeland. “I have to let the people of Artsakh [the Armenian name for the enclave] feel they are not alone,” he said in an interview. “My knowledge, experience and connections are needed more in Artsakh than anywhere else.”
Armenians and Azeris fought a series of wars in Nagorno-Karabakh in the dying days of the Soviet Union before a 1994 ceasefire. In 2020, Baku, backed by Turkey, retook substantial territory from the enclave, which is internationally recognised as part of Azerbaijan. Despite being an ally of Armenia, Moscow opted not to support Yerevan but brokered a truce, with Russia as its security guarantor.
But Armenia has accused Russia of failing to protect its interests. Meanwhile, observers say the blockade of the Lachin corridor, the only road linking the enclave with Armenia and the sole supply route for its 120,000 people, is a deliberate provocation by Baku at a time when Moscow is distracted by the Ukraine war.
“Azerbaijan’s defiant move against Armenia is a direct challenge to Russia and the ceasefire agreement it imposed,” said Giragosian.
Mikael Zolyan, an Armenian political analyst and former lawmaker, said: “It looks like the Russian peacekeepers don’t control the territory. Either they agreed all this in advance or they don’t have the ability to respond harshly to Azerbaijan.”
Russia could also be holding back because it was unwilling to damage relations with Turkey, Azerbaijan’s traditional ally, which has emerged as an intermediary between Moscow and Kyiv, Zolyan said.
In a further signal that Russia risks losing influence in the region, Yerevan is seeking alternative mediators. Nikol Pashinyan, Armenia’s prime minister, has called for an international peacekeeping mission in Nagorno-Karabakh. He attended peace talks, alongside Azerbaijan’s president Ilham Aliyev, with French president Emmanuel Macron and European Council president Charles Michel last October.
In a sign of his frustration with Moscow, Pashinyan cancelled plans for Russian-led military drills in Armenia last week.
“Armenia is smart enough not to seek Nato or EU membership, but is seeking greater balance . . . It is strategically pursuing . . . a UN peacekeeping mandate”, said Giragosian.
The impasse appears to have pushed Russia to act. On Tuesday, its foreign minister Sergei Lavrov said unblocking the Lachin corridor was “essential” — the first time Russia has made such a statement.
Vardanyan said the situation in the enclave was “too difficult” for a new peacekeeping force to be called in and instead proposed beefing up the Russian presence. “You can’t blame the soldiers. They have limited numbers and limited options,” he said. “It’s a difficult region and it’s unclear how long this will go on or how it can be resolved.”
The oligarch was appointed as Nagorno-Karabakh’s first minister by its president Arayik Harutyunyan last October. But analysts see his arrival as part of Moscow’s attempt to reboot its regional leadership.
Vardanyan, was “a product of Moscow”, Giragosian said, arguing that he had never lived in independent Armenia and had no popular support or political power base there or in Nagorno-Karabakh. “He is . . . a reminder to the Armenian government by Russia of the limits of Armenia’s embrace of the west,” Giragosian added.
In Azerbaijan, foreign minister Jeyhun Bayramov last month described Vardanyan as a “foreign element” and said his arrival had undermined efforts to “reintegrate” ethnic Armenians in Nagorno-Karabakh.
Vardanyan was the founder of Troika Dialog, once Russia’s largest investment bank, which was merged with state-run lender Sberbank in 2012.
In 2019, an investigation by international journalists into alleged money laundering uncovered a network of offshore companies with bank accounts in Baltic countries, which became known as the “Troika Laundromat”. Troika Dialog allegedly maintained the accounts, which funnelled billions of dollars of Russian money abroad between 2006 and 2013. In 2020, German prosecutors raided one of the companies related to the case, confirming they were aware of the network.
No criminal charges were brought and Vardanyan has denied wrongdoing. Sberbank was not part of the case or implicated in it.
Vardanyan acknowledged that he remained in informal contact with friends among the Russian elite but denied any official connection with Moscow. Russian officials “cannot communicate with me as we are an unrecognised republic”, he said.
Critics have accused him of quitting Russia to evade potential western sanctions over the war in Ukraine, a claim he denies. He was committed to Nagorno-Karabakh, where his son fought as a volunteer during a 2016 war, despite the current privations, he said.
The blockade has reduced the billionaire to driving an ancient gas-powered off-roader and he said he was not insulated against the shortages. “All that’s left in the restaurants are meat and bread,” Vardanyan said. “There are no vegetables, there’s no petrol.
“If it was because of sanctions, I would go to Uruguay. The weather is amazing, the food is cheap, and the football is great,” he added. “Leaving Russia for Artsakh because of sanctions is a real stretch of the imagination.”