Azerbaijan is emerging as a regional energy powerhouse in part because of its vast oil and natural gas reserves. Russian and European players are courting Baku for access to its gas reserves, with Europe linking Azeri gas to its planned Nabucco pipeline.
Opposition groups in Azerbaijan are said to be planning demonstrations in April to protest the government of President Ilham Aliyev, a key U.S. ally. The protests are organized by a banned Islamic party with alleged ties to Iran, Bloomberg News reports.
Tehran is accused of meddling in the regional affairs of Bahrain and Iraq. Theodore Karasik, an analyst at Dubai's Institute for Near East and Gulf Analysis, said Baku could be Tehran's next target.
"Iran isn't seeking to overthrow Aliyev but to destabilize the situation in the country so that it scares away Western investors," he told Bloomberg.
Iranian broadcasts in Azerbaijan criticize the government for placating Western oil interests. BP has invested more than $31 billion in the country and the West financed construction of the Baku-Tbilisi-Ceyhan oil pipeline to deliver Caspian crude.