Property destruction: Around 14 March 2025, Azerbaijan demolished the Government building in Stepanakert. The event is part of a systematic attempt by Azerbaijani authorities to damage or permanently destroy Armenian cultural heritage and any cultural references to the Artsakh Republic.

Supply-chain Risk Briefing

1. Summary

Azerbaijan demolished government buildings in Stepanakert around March 14, which is assessed as part of a systematic attempt to destroy Armenian cultural heritage. Current risk level is low, but this represents a strategic issue reflecting ongoing tensions within the South Caucasus region.

2. Supply-chain impact

• Regional transportation networks: Continued instability of logistics infrastructure in Stepanakert and the Nagorno-Karabakh region poses potential impacts on transit routes through the South Caucasus
• Energy supply chains: Escalating tensions between Azerbaijan and Armenia could serve as an indirect risk factor for gas pipeline and oil pipeline operations in the Caucasus region
• Agricultural production: Risk of disruption to agricultural activities and food supply chains in the region due to political instability
• Construction materials: Potential for fluctuations in regional construction material demand and supply chain reorganization due to ongoing destructive activities

3. Watch points

• Escalation potential: Whether tensions between Azerbaijan and Armenia develop into military conflict and changes in the overall security situation of the region
• International response: Ripple effects of mediation efforts and potential sanctions by major powers including the EU and Russia on regional economic activities