Post-Second Karabakh War developments have transformed the power configuration and regional order of the South Caucasus, shifting the logic of competition from hard geopolitics to geoeconomics and rivalry over connectivity, transit routes, energy, and investment. In this situation, the continuation of a security-oriented and balancing approach in Iran's foreign policy is not only incompatible with new realities but also leads to Iran's further isolation in emerging arrangements. Concurrently, strategic prioritization of either actor (Armenia or Azerbaijan) has limited utility due to geopolitical proximity, multi-layered cultural and historical ties with both sides, and the risk of driving them toward rival coalitions. In contrast, the networked approach is proposed as the optimal option—an approach that, by emphasizing the discovery of shared interests alongside conflict management, provides the opportunity to leverage new openings. The main challenges along this path include a lack of elite consensus, weak public diplomacy, a lack of strategic connectivity, Armenia's structural dependence on Russia, domestic ethnic sensitivities, and a gap between think tanks and implementation. Proposed solutions emphasize the development of strategic connectivity and investment in regional projects, active diplomacy and dialogue mechanisms, the formulation of proactive economic initiatives, the utilization of cultural soft power, strategic engagement with influential actors, and the development of border and free trade zones.