For PINR's latest analysis on Iran and its nuclear ambitions, please see:
"Intelligence Brief: Iran and the U.S. Maneuver
Carefully Toward Confrontation"
http://www.pinr.com/report.php?ac=view_report&report_id=470
------------------------------
Iran's Territorial Disputes with its Caspian Sea
Neighbors
Drafted By: Andrew Katen
http://www.pinr.com
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-à-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.
Report Drafted By:
Andrew
Katen
