The Caspian Sea region is an often-overlooked one, compared to the Middle East, when assessing the antagonisms of world powers. However, this hinterland of Eurasia is of great importance for a whole range of issues.
The Caspian Sea dominates on a geo-economic level Central Asia, Caucasus, Southern Russia and the upper part of the Middle East. More than 10 billion tons of oil reserves are to be found there along with trillions of cubic meters of natural gas, most of them still unexplored or underdeveloped. On a geopolitical level, the Caspian is the corridor that leverages the influence of Russia in the Middle East and at the same time a locale of significant U.S. interest.
Iran in particular—which has been in focus over the past year due to its rivalry with Israel and Saudi Arabia over its nuclear program—plays a vital role for the stability of the Caspian. A destabilization in this country will likely have a domino effect in neighboring Turkmenistan and Azerbaijan, bringing about unknown consequences on multiple issues, such as the European “Southern gas route” that is scheduled to transfer significant amounts of gas from that region to Europe in order to ease dependency on Gazprom. Moreover, the mostly autocratic rulers of those countries will surely be affected by developments in Iran ranging from revolts of Shia minorities to immigration movements and upturns in local economies.
The major players in the Caspian are specifically Russia, the United States, China, Iran and to a lesser extent the European Union through Germany. The main aim for all these powers is first to control the flow of gas from this region into the coastal regions of either the Black Sea or the Indian Ocean. The one who succeeds, apart from making major economic gains for decades to come, will be able to exercise great clout in Eurasia and claim stake in the energy-rich Middle East as well.
The United States has viewed the region over the past 20 years as a vital territory and has vowed to secure a “political pluralism” in order to decrease Russian influence. The main tool for that plan is the linkage of the Turkmenistan gas reserves to the Baku-Tbilisi-Erzurum pipeline and via other routes, such as the Nabucco plans that aim to transfer gas all the way up to Germany by crossing Turkey and Southeastern Europe. Similar plans are in place for transferring the Kazakh oil through the Caspian to Turkey.
In early September 2012 the American Ambassador in Azerbaijan Richard Morningstar, an expert on Eurasian energy politics, stated that his country is pursuing vigorously the strategies mentioned above. In parallel, the European Union gave the green light for the preparation of trilateral talks between the European Union, Turkmenistan and Azerbaijan in order to push forward such plans.
A major obstacle for pipelines to trespass the Caspian is the legal status of the Sea. Regarding its northern and western regions, there are bilateral agreements between Russia, Kazakhstan and Azerbaijan stipulating a 19 percent, 27 percent and 18 percent share of its continental shelf, respectively. According to these agreements, the percentages are in place to regulate the exploitation of the shelf and the mineral and energy reserves underneath, while navigation is for common usage.
In the southern and eastern parts of the Caspian there is no definite interstate agreement in place. Iran, which has 13 percent of the Sea’s shores, claims that the Sea should be equally divided (20 percent each) to all five neighboring countries. Also Iran and Turkmenistan do not recognize the agreements of the northern-western part, and in short there are various claims that prohibit any commercial interstate agreement needed in order to create sub-water pipelines.
Furthermore, both Russia and Iran do not want a clear-cut division and the creation of Sea borders, since that may prohibit their communication. Presently Russia connects with Iran for a variety of purposes, including military ones, since there are no legal constraints. Also there are growing fears among local citizens and environmental organizations that the Caspian, already facing heavy industrial pollution, would be vulnerable to an ecological catastrophe if pipeline plans were put in motion. In reality no plans can proceed under present circumstances if all countries do not agree, and it is more than certain that Russia especially would not agree to plans orchestrated by U.S. circles, aiming at cutting short its influence in the region.
The Caspian states are steadily upgrading their military forces, in a bid to use the element of hard power as a diplomatic tool and wield as much leverage as possible. Turkmenistan, which has small-sized armed forces, recently held its Khazar 2012 military exercises. The main scenario of the exercise was the protection of energy infrastructure. At the same time Russia held the Caucasus 2012 military maneuvers, spreading in three regions—the Caspian, the Black Sea and Caucasus—in a show of force for multiple audiences. The main scenario of this exercise was based on the counterattacks via sea-to-surface missiles, in which a new type of naval vessel, the fast patrol boat Dagestan, was presented with the capability of hitting a target via its missile system from a distance of 300 km. According to military analysts, Russia has showed it has the naval capabilities of practically controlling the Caspian Sea.
Iran, although focused in Syria and Iraq these days, retains a fleet of 90 small and medium-sized military vessels in the Caspian. It’s interesting to note that this constitutes about 30 percent of the total Iranian Navy’s number of vessels in service, pointing out that indeed Tehran pays close attention to that area.
Kazakhstan is also upgrading its Navy by acquiring its first fast patrol boat in 2012 and procuring an additional two for 2013. Azerbaijan is in negotiations to let U.S. radar stations be installed in its territory and has extensive ties with Israel. Although Baku from time to time skirts its peripheral alliances, it seems that it has followed a policy of exchanging U.S. influence into the Caspian for the ability to export its oil and gas production to the West along with billions of dollars in investments for its economy.
Based on the above developments, U.S. policy is trying to engage Azerbaijan in some sort of military alliance with Turkmenistan in order to effectively cut of the northern part of the Sea (Russia and Kazakhstan) from the Southern (Iran). That tactic faces three great challenges.
First, the military, security and intelligence capabilities of both these two countries are miniscule compared to their antagonists. Secondly, both of them stand in opposition regarding claims they have in the Serdar/Kyapaz oil field. Diplomatic tensions run high in respect to that difference, leading to a series of incidents over the years. According to the Jamestown Foundation, the estimated reserves of that field are around 150 million tons of oil.
A third challenge is the empowerment of Turkmenistan and Chinese business relations, based on the export of natural gas. According to the U.S Energy Information Administration, “China signed a 30-year gas purchase agreement with Turkmenistan to take 1,100 Bcf/y. … China and Turkmenistan signed another agreement in late 2011 that could add another 1,200 Bcf/y, bringing the total potential volume of gas exports to China to nearly 2,300 Bcf/y.” In addition, Beijing is stepping up its economic diplomacy in the country by offering future contracts based on a system of pipelines that would transport gas to the East, thus contradicting the U.S. and Azeri policy for directing gas to the West.
Overall, the Caspian region is inexorably related to a wider global strategy that is related to developments occurring in the Middle East and centered around Syria and Iran—if one correlates and links a series of diplomatic and business tactics by all major players. Consequently, this increases the potential of a conflict in the region as well.
Lastly, the likely withdrawal of the United States and NATO troops from Afghanistan in 2014 should also be examined, since at a geopolitical level this country is the backdoor of the Caspian. It neighbors Turkmenistan, Iran and China and is the getaway of potential Caspian gas exports to Pakistan and India. The “great game” of the 19th century, as aptly described by Rudyard Kipling, is moving on well into the 21st century.