EAEU or not: Armenia's rapprochement with the EU will reduce its exports by a third
Nikol Pashinyan's policy of rapprochement with the European Union may cost the Armenian economy dearly. Experts interviewed by Izvestia warn that in the event of a further cooling of relations with Moscow, the republic's exports risk falling by 30-35% at once, and some of the advantages within the EAEU may be in question. At the same time, the European market is unlikely to be able to quickly replace the Russian one: the competition there is much higher, and the requirements for suppliers are tougher. For the Russian Federation, the consequences will be less sensitive, although businesses will have to rebuild individual logistics and financial schemes. What else Yerevan risks by flirting with Brussels is in the Izvestia article.
How will Armenia's trade turnover change in 2026
On May 20, Russia began restricting the import of a number of Armenian goods, from flowers and mineral water to cognac. Rospotrebnadzor specialists have identified low-quality wine and cognac produced by Vedi-Alco, Abovyan Brandy Factory and Shahnazaryan Wine and Cognac House. Also, according to the agency, the content of chemical elements (bicarbonate ion, chlorides and sulfates) was exceeded in the batches of Armenian Jermuk mineral water. The Rosselkhoznadzor, in turn, justified the ban on the import of floral products by the fact that, despite the guarantees of colleagues from Armenia, there are "quarantine facilities" in the shipments.
Things are not going smoothly now and in general in relations between Moscow and Yerevan. Nikol Pashinyan continues his policy of rapprochement with the European Union, while maintaining the country's participation in the Eurasian Economic Union (EAEU — it also includes Belarus, Kazakhstan, Kyrgyzstan and Russia). It got to the point where Vladimir Zelensky arrived in the Armenian capital in early May. The Russian Foreign Ministry called the invitation of the head of the Kiev regime unacceptable.
"No one is pushing Armenia out" of the Eurasian Economic Union, the country's leadership itself has declared its desire to join the European Union, Russian Deputy Prime Minister Alexei Overchuk said. He urged Yerevan to make a choice as soon as possible. However, Yerevan seems to intend to sit on two chairs for a while: on May 23, the Armenian Foreign Ministry assured that the country is still interested in maintaining partnership relations with the Russian Federation. They also stressed that the development of cooperation with the United States and the EU is not directed against Moscow.
The latest restrictions apply to products that provide up to 90% of Armenia's exports in some sectors. For a republic whose economy is largely tied to the Russian market, this may become sensitive. And the experts interviewed by Izvestia warn that in the event of an even greater aggravation of relations, the abolition of preferences or the introduction of new restrictions on supplies and settlements, Armenia's exports may sink. According to estimates by economist Olga Gogaladze, by 30-35% at once. Anna Pak, a professor at the RUDN University Faculty of Economics, gave similar figures. According to her, by the end of the year, the drop in supplies could approach a third.
The negative dynamics are already noticeable. By the end of 2025, Armenia's foreign trade turnover decreased by almost 29% to $21.4 billion, Anton Nikitin, founder and CEO of Fingold, recalled. According to him, the main decline occurred in the Russian direction and the segment of precious metals. This trend, the expert believes, will continue.
At the same time, even a milder scenario implies significant losses. Natalia Milchakova, a leading analyst at Freedom Finance Global, estimated a possible reduction in Armenian exports at about 15%.
As Olga Gogaladze explained, the sharp increase in Armenia's foreign trade in 2022-2024 was due not so much to the development of its own production, but rather to the re-export of goods to Russia, parallel imports and the country's role as a transit hub. Now these drivers are gradually weakening, so the republic's exports may decrease by another 15-25% by the end of the year.
At the same time, participation in the EAEU remains one of the main factors of economic sustainability for Armenia, Anna Pak believes. The Union gives Armenian producers access to a large market without trade barriers, while it is much more difficult to enter the European market due to stricter standards and high competition.
In addition, companies from the EAEU countries provide Yerevan with budget revenues and support business activity within the country. The Armenian business is also integrated into the production and logistics chains in the Eurasian space, which helps the economy maintain stability, the expert stressed. Another important aspect is the cost of certain goods. So, Kremlin spokesman Dmitry Peskov warned: now the price of Russian gas for Armenia is "more than preferential", this will change if Yerevan leaves the EAEU.
How will the severance of relations with Armenia affect the Russian Federation
Economic relations between Russia and Armenia cover several areas at once, from food supplies to logistics and IT. In addition to parallel imports, Moscow buys alcohol, canned food, juices and other processed products from Yerevan. Armenian IT companies also actively work with Russian customers and receive a significant portion of their revenue from them.
However, experts emphasize that the dependence is uneven. For Armenia, the Russian market is of critical importance, while for the Russian Federation, possible losses look much more limited.
Cooperation between the two countries has long gone beyond ordinary trade and formed a broad economic cooperation, said Ekaterina Kosareva, Managing Partner of the VMT Consult agency. According to her, Russia and Armenia complement each other in the agricultural and industrial sphere and logistics, besides, the republic plays the role of a transit hub on the way to the markets of the Middle East.
Infrastructure projects occupy a separate place. We are talking about extending the service life of the Armenian nuclear power plant, managing railways and discussing the construction of small modular reactors, Ekaterina Kosareva said.
However, it is Armenia that risks facing the most serious consequences in the event of further deterioration of relations, according to Anton Nikitin from the Fingold company. According to him, Russia remains the republic's largest trading partner, and Yerevan will not be able to quickly compensate for the possible reduction in trade at the expense of Europe, Iran or the Middle East.
Alternative supply routes also create additional difficulties. Logistics through Georgia and Iran is more expensive, and the capacity of these markets for Armenian products remains limited, the expert explained.
Money transfers may also be at risk. Income from Russia has been one of the main sources of currency for Armenian households for many years. Strengthening banking control and tightening financial compliance can reduce this flow, which will affect both domestic demand and the stability of the Armenian dram, Anton Nikitin warned. In addition, local businesses will have to urgently look for new supply routes and rebuild the settlement system.
The consequences for the Russian economy look much less sensitive. Armenia's share in the foreign trade turnover of the Russian Federation remains relatively small. According to data for 2025, the trade turnover between the two countries amounted to $6.4 billion, while only about $1.2 billion accounted for the supply of Armenian goods to Russia, Natalia Milchakova from Freedom Finance Global recalled.
In fact, for the Russian Federation, it is rather not about the loss of significant trade volumes, but about the need to rebuild individual logistics and settlement mechanisms, Anton Nikitin believes. The business will be able to gradually redirect some of its operations through other jurisdictions such as Kazakhstan, Kyrgyzstan, Turkey or Hong Kong. This process will take time, but experts do not expect any critical risks for the Russian economy.
At the same time, a certain effect may occur within the EAEU itself. If trade disagreements between the members of the union become a regular practice, other countries of the union may be more cautious about further deepening integration, Anton Nikitin noted. According to him, what is more important for Russia in this situation is not direct trade losses, but the preservation of the EAEU as a stable economic system.
Thus, the possible cooling of relations will be a serious economic challenge for Armenia, from exports and foreign exchange earnings to logistics and employment. According to experts, Russia will be able to compensate for most of the lost ties through alternative destinations and partners.
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