Abstract. In the situation developing around Iran Azerbaijan was confronted with serious challenges in the foreign policy. Historically relations of the two countries were rigorous and accompanied by serious contradictions in foreign and domestic policies. However after conclusion of a nuclear deal relations between the two countries improved substantially, especially in the economic sphere. First of all it concerns transport projects. New sanctions as well as an aggravation of the situation around Iran led to suspension of some projects. Azerbaijan is not prepared for deterioration of relations with the USA, but it also doesn’t want to lose such an important economic partner as Iran, whose serious crisis may destabilize the whole region of South Caucasus.