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Trans-Caucasus supply


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I'm a little confused about how supply works here.

Situation 1. Allied. Russians have a line of supply to the south and Brits take Iran (already own Iraq). Everyting in the Middle East, including Iran, remains at supply 5.

Situation 2. Axis. Take the Caucasus from Rostov. Take Iran. Iran is at supply 8. I'm assuming that the rest of the Middle East would have followed suit if I had advanced through Iraq to Egypt (game ended though, so I didn't see it).

Can someone explain why the two situations are different?

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