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"IRAN'S TERRITORIAL DISPUTES WITH ITS CASPIAN SEA NEIGHBORS"
Report Drafted By: Andrew Katen
PINR
31 May 2006
Vice President Dick Cheney's May visit to Kazakhstan and his subsequent
criticism of Russia spotlight the rebirth of a centuries-old "Great
Game" of geopolitical maneuvering by outside powers for control of
Central Asia. Rather than campaigns waged between Russia and Britain
for trade routes to India, however, the current struggle is for access
to Caspian Sea hydrocarbon resources.
While a May 8, 2006 Associated Press article credits Cheney with
lambasting Putin for "reversing democratic reforms and using energy
reserves as blackmail to gain political leverage," his comments also
served as a warning to other great powers involved in Central Asia:
the Great Game has a new player. More specifically, Cheney's criticism
of Russia reflects the tension arising from U.S. attempts to secure
Kazakhstan's cooperation in the construction of a trans-Caspian oil
pipeline from Aktau to Baku that would feed into the newly-created
(and U.S. supported) Baku-Tbilisi-Ceyhan pipeline.
Such a deal would, in effect, break Russia's oil export monopoly in
the Caspian Sea region.
The United States' entry into Central Asia has equally important --
and potentially more dangerous -- implications for another veteran
player of the Great Game: Iran. Piled on top of 25 years of hostile
diplomatic relations, economic sanctions, recent U.S. military
action in Iraq and Afghanistan, and threats over a developing nuclear
research program, U.S. involvement in the Caspian Sea region must be
interpreted by Tehran as an attempt by Washington to further isolate
Iran from the international community. Contributing to Iran's worries
over U.S. encroachment in its backyard are the unresolved issues
it shares with the other four Caspian littoral states regarding the
sea's legal status and how best to divide its territory.
In July 2001, Iran acted on its frustrations by deploying a warship
and fighter planes to threaten two Azeri research vessels exploring
the Araz-Alov-Sharg oilfields on behalf of British Petroleum.
Ownership of the south Caspian oilfields is a continuing source of
dispute between Azerbaijan and Iran. The Tehran Times described the
presence of research vessels as an "imprudent act of Azerbaijan,
supported by Britain," and Iran reacted by positioning troops
along its border with Azerbaijan. While territorial matters among
northern Caspian Sea states have largely been settled diplomatically,
this arm-flexing display by Iran indicated that the resolution of
similar issues in the southern Caspian will continue to be marked
by a not-so-delicate balance of economic/diplomatic negotiations and
military action.
The world's largest inland body of water, the Caspian Sea is
bordered by five states: Russia, Kazakhstan, Azerbaijan, Iran, and
Turkmenistan. It sits on top of the world's third largest hydrocarbon
reserves (projected to hold between 17 and 33 billion barrels of
oil), as well as up to 325 trillion cubic feet of natural gas. These
resources are not evenly distributed throughout the sea, however;
the majority of off-shore oil reserves lie closest to Kazakhstan
(the Tengiz and Kashagan Fields) and Azerbaijan (the Baku Fields). In
addition to hydrocarbons, the Caspian has 90 percent of the world's
sturgeon and is, therefore, home to the caviar industry.
Not surprisingly, the three major issues at the root of Caspian
territorial disputes are hydrocarbon resources, fishing, and the
international waters used to access and transport them. The Russian
Empire/Soviet Union and Persia/Iran signed agreements in 1921 and
1940 recognizing the Caspian Sea as a lake belonging to and divided
between them. Following the dissolution of the Soviet Union, both
Russia and Iran wanted this agreement to continue despite assertions
of independence by the breakaway states of Kazakhstan, Azerbaijan and
Turkmenistan. Eager to exploit the natural resources off its coast and
establish its economic independence from Russia, Azerbaijan declared
in 1998 that, because the Caspian Sea is an international lake,
its surface and seabed should be divided along a median line into
five sectors (the size of which would be determined by each state's
respective shoreline length).
Russia and Iran responded by pointing out that, as a member of the
Commonwealth of Independent States (C.I.S.), Azerbaijan had agreed
to observe all treaties and agreements reached by the former Soviet
Union. Russia and Iran were aware that if the Caspian Sea were divided
according to Azerbaijan's proposal, their respective territories
would neither afford them ownership of the majority of Caspian
oil nor access to the surface that is necessary to profit from its
transport. Furthermore, Tehran recognized that any plan allotting
territory to a state based on shoreline length would leave Iran with
the smallest share of the Caspian (between 12 to 16 percent) rather
than an equal fifth.
Despite its objections to Azerbaijan's plan, Russia could hardly
enforce the C.I.S. agreement in 1998; instead, its main concern
at the time was reaching a solution before the United States could
influence territorial negotiations. Rather than insisting on an equal
division of the sea, Moscow made the best deal it could: an agreement
with Kazakhstan that divided their shared portion of the Caspian by
seabed only. Tehran vehemently opposed this arrangement or any other
that based division on shoreline length; it insisted on "condominium"
use of the sea or, at the very least, division of the Caspian into
five equal sectors. Azerbaijan and Turkmenistan continued to advocate
division of both the seabed and the surface, although neither could
agree on which of them owned the Chirag and Azeri oilfields.
While the agreement between Russia and Kazakhstan divided the
littoral states into two camps (one wanted division by seabed only,
and the other by seabed and surface), it also effectively ended the
argument over whether the Caspian Sea should be divided, leaving
instead the issue of how it should be divided. Rather than quarreling
over definitions of a sea or a lake, many experts suggested that
the Caspian could simply be considered a "unique reservoir" that
shares characteristics of both seas and lakes, and whose disputes
should be resolved by nontraditional agreements worked out among the
littoral states.
Apparently, Azerbaijan recognized the unlikelihood that a solution
to the Caspian dispute would ever achieve the consensus of all five
states and entered into a deal with Russia in 2001. Baku also must
have taken into account its reliance on Russia's oil export monopoly
as well as its ability to influence the Nagorno-Karabakh conflict, and
it admitted that further protests of the Russia-Kazakhstan agreement
were futile. Rather than continuing to voice objections alongside
intransigent allies such as Turkmenistan and Iran, Baku moved closer
to Moscow's camp by consenting to a similar deal that divided the
seabed only. A third bilateral negotiation between Kazakhstan and
Azerbaijan effectively ended the uncertainty over territory in the
northern Caspian and unfroze exploration of her hydrocarbon reserves.
Iran
The helplessness that Tehran felt watching the northern Caspian Sea
debate unfold undoubtedly contributed to the militaristic actions
than Iran undertook in 2001. While the confrontation occurred over
contested oilfields, however, Tehran's interests in the Caspian may
be as much geopolitical as they are economic. Since most of Iran's
oil reserves lie in the Persian Gulf, the dilemma Iran shares with
its Caspian Sea neighbors may be driven by the apprehension that it
is being left out of a regional decision-making process, as well as
the desire by Tehran to check further U.S. involvement in Central Asia.
Iran has, so far, had lukewarm results in its attempts at building
regional cooperation. Designed to improve its image from that of
xenophobic Islamist to engaged neighbor, Iran's foreign policies
take into account the search for partners to replace the security
deals provided by the Soviet Union, as well as the need to construct
regional arrangements capable of balancing Western forces. However,
Iran's promotion of Islam and Middle Eastern ties has done little
to overcome the religious and cultural dissimilarities it has with
its northern neighbors. Furthermore, Tehran finds that it cannot
compete with offers by outside powers such as Russia and the United
States to provide economic and security assistance to its neighboring
Caspian states.
One reason for Iran's predicament, at least in Tehran's eyes, is the
stranglehold placed on it by the United States -- a fear not altogether
unfounded. The U.S.-Iran-Libya Sanctions Act of 1996 wounded Iran's
bargaining position vis-a-vis regional states by prohibiting relations
between U.S. oil companies and Iran. The intention of this act was to
control Caspian oil export routes by prohibiting the involvement of
U.S. oil companies with the construction of a proposed pipeline through
Iran to the Persian Gulf, a project that if completed would diminish
the importance of the more expensive and less efficient U.S.-backed
Baku-Tbilisi-Ceyhan pipeline. Finished in 2005, the Baku-Tbilisi-Ceyhan
pipeline makes possible the export of oil across Georgia and Turkey
to the Mediterranean rather than via Russian pipelines or shipping
through the Dardanelles. Simply put, the new pipeline breaks the oil
export monopoly that Russia previously held and further isolates Iran.
In light of increased involvement by external powers in Baku and
continued disputes with Azerbaijan over southern Caspian oilfields,
Tehran's relations with its northern neighbor are understandably
poor. Recent offers by the United States to improve the Azeri navy
have reinforced Tehran's suspicions that Baku may be close to joining
the anti-Iran coalition being put together by Washington in response
to Iran's nuclear ambitions.
Contributing to the hostility between Iran and Azerbaijan is the
ongoing ethnic conflict in Nagorno-Karabakh. This region has been
a constant thorn in the side of Azerbaijan, whose inability to
defeat Armenian-backed insurgents has caused it to rely on outside
powers for assistance. On the one hand, Tehran would like to see
the conflict resolved in order to avoid an independence movement by
Iran's 15 million Azeris (which has gained momentum since Azerbaijan's
independence from the Soviet Union) or foreign involvement by the
United States or Turkey. On the other hand, Tehran does not want
a strong Azerbaijan and recognizes the benefit of using Armenian
insurgents to exploit the conflict, render unstable the nearby
Baku-Tbilisi-Ceyhan pipeline, and dissuade Baku from further
cooperation with the United States.
Azerbaijan's 2001 territorial agreement with Russia may also have
signaled to Tehran that Moscow is attempting to expand its control
of the Caspian and further reduce Iran's influence there. Meanwhile,
Russia advances its role in the region by continuing to balance
its support between Azerbaijan and Iran, using Armenia to keep Baku
in check, while also providing Tehran with two-thirds of its arms
imports and assistance with the nuclear program. Russia inherited the
majority of the Soviet Caspian fleet and has undertaken efforts to
expand its capabilities, purportedly to affirm its role in the areas
of counter-narcotics, counter-terrorism, and sea rescue. Along these
lines, Russia conducted live-fire naval maneuvers in the Caspian in
October of 2001, followed by the largest joint exercises in post-Soviet
history in August 2002 with Azeri and Kazakh forces.
Additionally, Moscow has moved a land-based missile site from the
Baltic to the Caspian.
Conclusion
Renewed interest in the Caspian Sea region by outside powers, continued
hostility between the United States and Iran, and the perception by
Tehran that it is being left out of the regional decision-making
process renders predicting Iran's future regional Caspian policy
difficult. However, despite the unstable relationship between Iran
and Azerbaijan, it is not clear if Iran will continue conflict with
its neighbors. Instead, it may pursue increased regionalism through
bilateral and multilateral agreements that address its economic
and security needs. Tehran may strengthen the Economic Cooperation
Organization -- which includes Iran, Turkey, Pakistan, and the six
former-Soviet Muslim states -- and initiate analogous arrangements
that increase its regional power status.
Pipeline negotiations with Kazakhstan and Turkmenistan, and even the
possibility of a route from Baku, are certainly possible in the future
given Tehran's desire for an alternative to the U.S. or Russian-backed
options that currently exist.
As the world demand for oil increases and U.S. influence in the Middle
East remains shaky, Iran will continue to nurture relationships with
emerging outside powers such as China and India -- and, in light of
U.S. policy of containment against it, Venezuela -- as alternatives
to the U.S.-led international system of market democracy. Non-Western
based organizations, such as the Shanghai Cooperation Organization
and Organization of Petroleum Exporting Countries, may offer Tehran
the political, security, and economic cooperation it recognizes as
necessary for achieving the regional great power status that it covets.
Nevertheless, the uncertainty over south Caspian territorial disputes
and Iran's perception that its "back is against the wall" will continue
to make military action by Iran a real possibility. As U.S.
threats over Iran's nuclear program and moves by Russia to
reconsolidate its Central Asian interests increase, the frustration
of Iran's traditionally xenophobic leadership will likely continue
the country's involvement in the Nagorno-Karabakh conflict, as well
as gunboat diplomacy on the Caspian Sea.
From: Emil Lazarian | Ararat NewsPress
Report Drafted By: Andrew Katen
PINR
31 May 2006
Vice President Dick Cheney's May visit to Kazakhstan and his subsequent
criticism of Russia spotlight the rebirth of a centuries-old "Great
Game" of geopolitical maneuvering by outside powers for control of
Central Asia. Rather than campaigns waged between Russia and Britain
for trade routes to India, however, the current struggle is for access
to Caspian Sea hydrocarbon resources.
While a May 8, 2006 Associated Press article credits Cheney with
lambasting Putin for "reversing democratic reforms and using energy
reserves as blackmail to gain political leverage," his comments also
served as a warning to other great powers involved in Central Asia:
the Great Game has a new player. More specifically, Cheney's criticism
of Russia reflects the tension arising from U.S. attempts to secure
Kazakhstan's cooperation in the construction of a trans-Caspian oil
pipeline from Aktau to Baku that would feed into the newly-created
(and U.S. supported) Baku-Tbilisi-Ceyhan pipeline.
Such a deal would, in effect, break Russia's oil export monopoly in
the Caspian Sea region.
The United States' entry into Central Asia has equally important --
and potentially more dangerous -- implications for another veteran
player of the Great Game: Iran. Piled on top of 25 years of hostile
diplomatic relations, economic sanctions, recent U.S. military
action in Iraq and Afghanistan, and threats over a developing nuclear
research program, U.S. involvement in the Caspian Sea region must be
interpreted by Tehran as an attempt by Washington to further isolate
Iran from the international community. Contributing to Iran's worries
over U.S. encroachment in its backyard are the unresolved issues
it shares with the other four Caspian littoral states regarding the
sea's legal status and how best to divide its territory.
In July 2001, Iran acted on its frustrations by deploying a warship
and fighter planes to threaten two Azeri research vessels exploring
the Araz-Alov-Sharg oilfields on behalf of British Petroleum.
Ownership of the south Caspian oilfields is a continuing source of
dispute between Azerbaijan and Iran. The Tehran Times described the
presence of research vessels as an "imprudent act of Azerbaijan,
supported by Britain," and Iran reacted by positioning troops
along its border with Azerbaijan. While territorial matters among
northern Caspian Sea states have largely been settled diplomatically,
this arm-flexing display by Iran indicated that the resolution of
similar issues in the southern Caspian will continue to be marked
by a not-so-delicate balance of economic/diplomatic negotiations and
military action.
The world's largest inland body of water, the Caspian Sea is
bordered by five states: Russia, Kazakhstan, Azerbaijan, Iran, and
Turkmenistan. It sits on top of the world's third largest hydrocarbon
reserves (projected to hold between 17 and 33 billion barrels of
oil), as well as up to 325 trillion cubic feet of natural gas. These
resources are not evenly distributed throughout the sea, however;
the majority of off-shore oil reserves lie closest to Kazakhstan
(the Tengiz and Kashagan Fields) and Azerbaijan (the Baku Fields). In
addition to hydrocarbons, the Caspian has 90 percent of the world's
sturgeon and is, therefore, home to the caviar industry.
Not surprisingly, the three major issues at the root of Caspian
territorial disputes are hydrocarbon resources, fishing, and the
international waters used to access and transport them. The Russian
Empire/Soviet Union and Persia/Iran signed agreements in 1921 and
1940 recognizing the Caspian Sea as a lake belonging to and divided
between them. Following the dissolution of the Soviet Union, both
Russia and Iran wanted this agreement to continue despite assertions
of independence by the breakaway states of Kazakhstan, Azerbaijan and
Turkmenistan. Eager to exploit the natural resources off its coast and
establish its economic independence from Russia, Azerbaijan declared
in 1998 that, because the Caspian Sea is an international lake,
its surface and seabed should be divided along a median line into
five sectors (the size of which would be determined by each state's
respective shoreline length).
Russia and Iran responded by pointing out that, as a member of the
Commonwealth of Independent States (C.I.S.), Azerbaijan had agreed
to observe all treaties and agreements reached by the former Soviet
Union. Russia and Iran were aware that if the Caspian Sea were divided
according to Azerbaijan's proposal, their respective territories
would neither afford them ownership of the majority of Caspian
oil nor access to the surface that is necessary to profit from its
transport. Furthermore, Tehran recognized that any plan allotting
territory to a state based on shoreline length would leave Iran with
the smallest share of the Caspian (between 12 to 16 percent) rather
than an equal fifth.
Despite its objections to Azerbaijan's plan, Russia could hardly
enforce the C.I.S. agreement in 1998; instead, its main concern
at the time was reaching a solution before the United States could
influence territorial negotiations. Rather than insisting on an equal
division of the sea, Moscow made the best deal it could: an agreement
with Kazakhstan that divided their shared portion of the Caspian by
seabed only. Tehran vehemently opposed this arrangement or any other
that based division on shoreline length; it insisted on "condominium"
use of the sea or, at the very least, division of the Caspian into
five equal sectors. Azerbaijan and Turkmenistan continued to advocate
division of both the seabed and the surface, although neither could
agree on which of them owned the Chirag and Azeri oilfields.
While the agreement between Russia and Kazakhstan divided the
littoral states into two camps (one wanted division by seabed only,
and the other by seabed and surface), it also effectively ended the
argument over whether the Caspian Sea should be divided, leaving
instead the issue of how it should be divided. Rather than quarreling
over definitions of a sea or a lake, many experts suggested that
the Caspian could simply be considered a "unique reservoir" that
shares characteristics of both seas and lakes, and whose disputes
should be resolved by nontraditional agreements worked out among the
littoral states.
Apparently, Azerbaijan recognized the unlikelihood that a solution
to the Caspian dispute would ever achieve the consensus of all five
states and entered into a deal with Russia in 2001. Baku also must
have taken into account its reliance on Russia's oil export monopoly
as well as its ability to influence the Nagorno-Karabakh conflict, and
it admitted that further protests of the Russia-Kazakhstan agreement
were futile. Rather than continuing to voice objections alongside
intransigent allies such as Turkmenistan and Iran, Baku moved closer
to Moscow's camp by consenting to a similar deal that divided the
seabed only. A third bilateral negotiation between Kazakhstan and
Azerbaijan effectively ended the uncertainty over territory in the
northern Caspian and unfroze exploration of her hydrocarbon reserves.
Iran
The helplessness that Tehran felt watching the northern Caspian Sea
debate unfold undoubtedly contributed to the militaristic actions
than Iran undertook in 2001. While the confrontation occurred over
contested oilfields, however, Tehran's interests in the Caspian may
be as much geopolitical as they are economic. Since most of Iran's
oil reserves lie in the Persian Gulf, the dilemma Iran shares with
its Caspian Sea neighbors may be driven by the apprehension that it
is being left out of a regional decision-making process, as well as
the desire by Tehran to check further U.S. involvement in Central Asia.
Iran has, so far, had lukewarm results in its attempts at building
regional cooperation. Designed to improve its image from that of
xenophobic Islamist to engaged neighbor, Iran's foreign policies
take into account the search for partners to replace the security
deals provided by the Soviet Union, as well as the need to construct
regional arrangements capable of balancing Western forces. However,
Iran's promotion of Islam and Middle Eastern ties has done little
to overcome the religious and cultural dissimilarities it has with
its northern neighbors. Furthermore, Tehran finds that it cannot
compete with offers by outside powers such as Russia and the United
States to provide economic and security assistance to its neighboring
Caspian states.
One reason for Iran's predicament, at least in Tehran's eyes, is the
stranglehold placed on it by the United States -- a fear not altogether
unfounded. The U.S.-Iran-Libya Sanctions Act of 1996 wounded Iran's
bargaining position vis-a-vis regional states by prohibiting relations
between U.S. oil companies and Iran. The intention of this act was to
control Caspian oil export routes by prohibiting the involvement of
U.S. oil companies with the construction of a proposed pipeline through
Iran to the Persian Gulf, a project that if completed would diminish
the importance of the more expensive and less efficient U.S.-backed
Baku-Tbilisi-Ceyhan pipeline. Finished in 2005, the Baku-Tbilisi-Ceyhan
pipeline makes possible the export of oil across Georgia and Turkey
to the Mediterranean rather than via Russian pipelines or shipping
through the Dardanelles. Simply put, the new pipeline breaks the oil
export monopoly that Russia previously held and further isolates Iran.
In light of increased involvement by external powers in Baku and
continued disputes with Azerbaijan over southern Caspian oilfields,
Tehran's relations with its northern neighbor are understandably
poor. Recent offers by the United States to improve the Azeri navy
have reinforced Tehran's suspicions that Baku may be close to joining
the anti-Iran coalition being put together by Washington in response
to Iran's nuclear ambitions.
Contributing to the hostility between Iran and Azerbaijan is the
ongoing ethnic conflict in Nagorno-Karabakh. This region has been
a constant thorn in the side of Azerbaijan, whose inability to
defeat Armenian-backed insurgents has caused it to rely on outside
powers for assistance. On the one hand, Tehran would like to see
the conflict resolved in order to avoid an independence movement by
Iran's 15 million Azeris (which has gained momentum since Azerbaijan's
independence from the Soviet Union) or foreign involvement by the
United States or Turkey. On the other hand, Tehran does not want
a strong Azerbaijan and recognizes the benefit of using Armenian
insurgents to exploit the conflict, render unstable the nearby
Baku-Tbilisi-Ceyhan pipeline, and dissuade Baku from further
cooperation with the United States.
Azerbaijan's 2001 territorial agreement with Russia may also have
signaled to Tehran that Moscow is attempting to expand its control
of the Caspian and further reduce Iran's influence there. Meanwhile,
Russia advances its role in the region by continuing to balance
its support between Azerbaijan and Iran, using Armenia to keep Baku
in check, while also providing Tehran with two-thirds of its arms
imports and assistance with the nuclear program. Russia inherited the
majority of the Soviet Caspian fleet and has undertaken efforts to
expand its capabilities, purportedly to affirm its role in the areas
of counter-narcotics, counter-terrorism, and sea rescue. Along these
lines, Russia conducted live-fire naval maneuvers in the Caspian in
October of 2001, followed by the largest joint exercises in post-Soviet
history in August 2002 with Azeri and Kazakh forces.
Additionally, Moscow has moved a land-based missile site from the
Baltic to the Caspian.
Conclusion
Renewed interest in the Caspian Sea region by outside powers, continued
hostility between the United States and Iran, and the perception by
Tehran that it is being left out of the regional decision-making
process renders predicting Iran's future regional Caspian policy
difficult. However, despite the unstable relationship between Iran
and Azerbaijan, it is not clear if Iran will continue conflict with
its neighbors. Instead, it may pursue increased regionalism through
bilateral and multilateral agreements that address its economic
and security needs. Tehran may strengthen the Economic Cooperation
Organization -- which includes Iran, Turkey, Pakistan, and the six
former-Soviet Muslim states -- and initiate analogous arrangements
that increase its regional power status.
Pipeline negotiations with Kazakhstan and Turkmenistan, and even the
possibility of a route from Baku, are certainly possible in the future
given Tehran's desire for an alternative to the U.S. or Russian-backed
options that currently exist.
As the world demand for oil increases and U.S. influence in the Middle
East remains shaky, Iran will continue to nurture relationships with
emerging outside powers such as China and India -- and, in light of
U.S. policy of containment against it, Venezuela -- as alternatives
to the U.S.-led international system of market democracy. Non-Western
based organizations, such as the Shanghai Cooperation Organization
and Organization of Petroleum Exporting Countries, may offer Tehran
the political, security, and economic cooperation it recognizes as
necessary for achieving the regional great power status that it covets.
Nevertheless, the uncertainty over south Caspian territorial disputes
and Iran's perception that its "back is against the wall" will continue
to make military action by Iran a real possibility. As U.S.
threats over Iran's nuclear program and moves by Russia to
reconsolidate its Central Asian interests increase, the frustration
of Iran's traditionally xenophobic leadership will likely continue
the country's involvement in the Nagorno-Karabakh conflict, as well
as gunboat diplomacy on the Caspian Sea.
From: Emil Lazarian | Ararat NewsPress