#11
Asia Times
April 18, 2002
Caspian Sea divide no closer to closure
By Hooman Peimani

The collapse of the Soviet Union opened a new era in the Caspian Sea region. Among other factors, the Caspian oil and gas resources have since elevated the region's international status, while pitting its littoral states (Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan) against one another over their division.

The latter's inability to agree on a legal regime for the Caspian Sea has created uncertainty about the ownership of many offshore oilfields and prevented their development. Unsurprisingly, the situation is ripe for tension and hostility among the five littoral states. This fragile situation could easily escalate into military confrontation given the existence of many other sources of conflict among the littoral states arising from their political concerns and military/security considerations. In particular, disputes over certain oilfields between Azerbaijan and its two Caspian neighbors, Iran and Turkmenistan, have recently reached a dangerous level. The Caspian region is now prone to an arms race between these countries, which could escalate to a war only to destabilize the entire region.

Having the world's fifth-largest oil reserves and its second-largest natural-gas deposits, the offshore Caspian fossil-energy resources are not of strategic importance to Iran. Nor are they for Russia, a country with the world's largest gas reserves and significant oil deposits. Nevertheless, for a variety of political, economic and security reasons, including its energy resources, the two regional powers have vested interests in the Caspian Sea. During the Soviet era, they agreed to joint use of the resources of the largest closed lake on Earth.

However, the Caspian oil and gas resources are of great importance to the other littoral states. The latter have considered them as their main source of revenue and a means to preserve their sovereignty since their independence from the Soviet Union in 1991. In short, all the five littoral states have strong reasons to insist on a formula for the division of the Caspian Sea, which will leave them with the largest possible share. Apart from political conflicts among the littoral states and their manipulation by non-littoral powers, this reality has created a major obstacle to their acceptance of a legal regime binding on all parties.

Disputes over the ownership of certain Caspian offshore oilfields between Iran and Azerbaijan and between Azerbaijan and Turkmenistan reached an unprecedented hostile stage in 2001. Iran and Turkmenistan then accused Azerbaijan of its illegal development and operation of certain disputed oilfields to which all the three states have ownership claims. They also accused Azerbaijan of efforts to develop other disputed oilfields with the assistance of foreign oil companies. Furthermore, they accused Azerbaijan of violating their territorial waters with its military and non-military vessels, while Azerbaijan accusing them of the same violations. On one occasion, the Iranian navy allegedly forced an Azeri oil-exploration ship to leave a disputed oilfield. While Iran evaluated the incident as a minor issue in Iranian-Azeri relations, Azerbaijan considered it as a major event endangering its territorial rights and economic interests.

In its aftermath, certain developments contributed to the escalation of tension in the Caspian region. One was Turkey's dispatch of a small number of fighter jets to Azerbaijan under the pretext of participating in a previously arranged air show. Azerbaijan's official and unofficial references to Turkey's move as a clear sign of its determination to defend the Azeris in any future confrontation with Iran offset Turkey's official statements downgrading the move's significance.

Of course, the Turks made sure that the "air show" had left no doubt about their taking sides with the Azeris. Another development was the simultaneous official visit of the Turkish top military official to Azerbaijan, which was treated in the same manner by the Turks and the Azeris. Not only did the two developments create tension in Iran's ties with Azerbaijan, they provoked the disapproval of other littoral states and particularly of Russia and Turkmenistan. Finally, the sale of two US military boats to Azerbaijan added fuel to its conflicts with Iran and Turkmenistan.

The latter expressed deep concern about the transaction, which they portrayed as a threat to their national security and a provocative act leading to an arms race. In particular, Turkmenistan's reaction was very strong and included its revelation of its purchase of Ukrainian military boats, which in turn provoked a harsh Azeri reaction. Briefly, in their reaction to the developments, the Caspian littoral states, excluding Azerbaijan, warned against foreign involvement in their regional affairs, against the militarization of the Caspian Sea, against the use of force for settling territorial disputes, and against the threat of escalation of such disputes into war.

Against a background of tension of hostility in the Caspian region, certain turns in the US policy toward that region over the past few weeks have created concern about an emerging arms race there. Such an arms race could contribute to a military confrontation between and among the Caspian countries, particularly between Iran and Azerbaijan, with a dire impact on the stability of the Caucasus, a region prone to war and instability. The recent turns include the US government's lifting of a ban on selling arms to Azerbaijan and Armenia and the conclusion of military cooperation agreements between Azerbaijan and the United States. They also include the statements of US State Department officials as to their country's commitment to Azerbaijan's defense and security and to the improvement of Azerbaijan's military capability to meet any future Iranian military challenge. As well, the officials have stressed the US support of Azerbaijan in any future confrontations with Iran over the disputed oilfields.

The absence of a legal regime for the division of the Caspian Sea has not only prevented the full development of its rich oil and gas resources, but also created grounds for hostility and confrontation among its littoral states. Any major efforts on the part of Azeris to boast their military, especially their naval power, will surely provoke a reaction in kind by all other states. Given the history of conflict and mistrust between Azerbaijan and its two Caspian neighbors, Iran and Turkmenistan, an arms race will likely put all these countries on a dangerous path, which could lead to a war in the southern Caspian Sea.

The United States' arming and taking sides with the Azeris in their disputes with Iran will likely widen the scope of any future arms race and military confrontation to include Russia, a regional power that shares Iran's concern about a US presence in its neighborhood.

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