by Paul Pryce. With degrees in political science from both sides of the pond, Paul Pryce has previously worked as Senior Research Fellow for the Atlantic Council of Canada’s Canadian Armed Forces program, as a Research Fellow for the OSCE Parliamentary Assembly, and as an Associate Fellow at the Latvian Institute of International Affairs. He has also served as an infantryman in the Canadian Forces.
The Caspian Sea has long been a potential geopolitical flashpoint. Following the Iranian Revolution and the new regime in Iran’s renunciation in 1979 of the Russo-Persian Treaty of Friendship, questions arose as to the legal status of the Caspian Sea. These questions became more pressing with the dissolution of the Soviet Union, as the Caspian now has five littoral states with conflicting claims – Azerbaijan, Iran, Kazakhstan, the Russian Federation, and Turkmenistan – and estimates suggest that this inland sea holds reserves worth 48 billion barrels of crude oil and 292 trillion cubic feet of natural gas. This lack of clarity has at times fueled tensions, such as a series of maritime border incidents in 2000-2001 between Azerbaijan and Iran.
However, there has been significant momentum in 2018 toward clarifying the legal status of the Caspian Sea. In August 2018, the five littoral states signed the Aktau Agreement (text of the agreement), which stipulates that each will have 15 nautical miles of sovereign waters, in addition to a further 10 miles of fishing area, though how to delimit these boundaries is absent from the text of the agreement. If it is ultimately determined that the baseline should be measured from the shorelines of each littoral state, this was a surprising concession by Iran, which has the smallest Caspian shoreline and where some policymakers reportedly still resent the loss of control over the Caspian Sea that resulted from Iran’s defeat in the Russo-Persian War of 1826-1828. For his part, Russia’s President Vladimir Putin heralded the agreement as having “epoch-making significance“.
Signing the #Caspian Sea convention today by AZ,Iran,KZ,RUS,Turkmenistan-27 yrs after breakup of Soviet Union-is a rare piece of good news in intl relations.Foreign navies will be barred from Caspian,but pipelines may be laid across it. Win-win.
— Dmitri Trenin (@DmitriTrenin) 12. August 2018
The Aktau Agreement does not address all points of contention regarding the Caspian Sea, though. Beyond the lack of detail concerning the boundaries, the status of subsoil resources is not discussed. Although Kazakhstan’s Foreign Minister Kairat Abdrakhmanov stated in a press conference that these issues would be addressed in “a separate agreement“, there is little reason to believe that negotiations beyond Aktau will be any more fruitful than those which precipitated the current, vaguely-worded agreement. As such, tensions over the Caspian Sea are likely to persist in the medium- to long-term.
This situation suits Russia’s short-term interests well. Were the status of the Caspian Sea clarified, Turkmenistan could finally pursue its proposed Trans-Caspian Gas Pipeline, a subsea project which would transport approximately 1.1 trillion cubic feet of natural gas each year to Azerbaijan’s Sangachal Terminal, from which the natural gas could be shipped to Turkey and the European Union. Various iterations of this project have been considered since 1999, with each scuttled by border disputes and concerns regarding the security situation in the Caspian region. Although Nord Stream II – an expansion by Gazprom of its existing natural gas pipeline from Vyborg, Russia to a terminal in Greifswald, Germany – would have vastly greater export capacity than the Trans-Caspian Gas Pipeline, the addition of Turkmen supply to the European market would lower prices and, as a result, would reduce Gazprom’s profits. Without a formal delimitation of the maritime boundaries among the littoral states, it is unlikely that Turkmenistan will be able to proceed with its own competitor to Nord Stream II.
Yet this pre-occupation with pipeline projects undermines Russia’s potential influence in Central Asia and the Middle East. The strategic interests of Russia and Iran currently converge in Syria, and the Aktau Agreement could potentially allow for vessels from the Russian Navy’s Caspian Flotilla to use the northern Iranian port of Anzali. The United States’ sanctions against Iran may also drive Iran closer to Russia, which may go some way toward explaining the concessions offered by Tehran in the Aktau Agreement. But there remains the risk that a violent clash could unexpectedly take place among any of the other littoral states, and refereeing between these parties would draw Russian resources away from other foreign policy objectives. For example, in 2012-2013, tensions ratcheted up between Azerbaijan and Turkmenistan, when the former accused the latter of undertaking seismic testing in the disputed Kapyaz/Serdar offshore oil field, and subsequently both sides intercepted civilian vessels from the other side in waters beyond their respective zones of control. Adding to these tensions, the Turkmen Naval Forces deployed considerable assets near the aforementioned Kapyaz/Serdar oilfield during its first exercises, held in 2012.
Such a situation could escalate in the future, especially if Russian policymakers are of the mistaken belief that the other littoral states will simply accept the “status quo” now that the Aktau Agreement has been signed. Kazakhstan has been rapidly developing its own maritime forces over the past decade out of concern for the strategic intentions of the other Caspian states. For its part, Iran has also been bolstering its Caspian presence as well, though it suffered a setback in January 2018, when IRIS Damavand, a Moudge-class frigate, sank after an accident at the port of Anzali. With such a military build-up around the Caspian, a robust response would be needed from the Russian Navy to deter violence, were a dispute among the other littoral states to escalate.
Despite the challenge the Trans-Caspian Gas Pipeline would present to Russia’s gas export strategy, it would be more pragmatic for Russia to press for a lasting resolution to the ongoing disputes surrounding the Caspian Sea. This could be achieved by calling for another Caspian Summit to be held in 2019 – as normally these are held biannually – and showing leadership in the negotiations regarding the delimitation of maritime boundaries and subsea resources. But it is increasingly apparent that Russian policymakers have adopted a kind of “tunnel vision”, regarding Nord Stream II as a vital means of dividing Europe and exerting further control over Ukraine. Under such circumstances, unfortunately, it is unlikely Russia will rise to the occasion, building upon the Aktau Agreement to create a lasting peace.