Control of the Caspian Sea has been highly sought after due to its abundance of natural resources. Nearly 3 billion gallons of crude oil are produced every day and 3 trillion cubic feet of natural gas are produced every year. It is estimated that there could be well over 48 billion barrels of crude oil and over 292 trillion cubic feet of natural gas that still remain to be discovered.
Russia, Azerbaijan, Iran, Turkmenistan and Kazakhstan surround the Caspian Sea, each battling for the territorial rights to the land and seabed near each country’s borders since the collapse of the Soviet Union in 1991.
Prior to 1991, only Iran and the Soviet Union controlled the Caspian Sea. The two countries had a series of bilateral treaties that equally divided the Caspian. The fall of the Soviet Union, however, created many challenges for both countries. For Russia the collapse of the Soviet Union meant losing valuable land and seabed rights of the Caspian Sea to Azerbaijan, Kazakhstan and Turkmenistan. Iran was faced with the challenges of competing with and negotiating with these new countries as well as losing its equally-shared rights of the Caspian with Russia.
The Caspian has been called a sea since its discovery in ancient times, but there has been much debate over the years whether the Caspian should be considered a lake rather than a sea. The rationale behind this debate is because a lake would be equally divided while a sea would not. Bilateral treaties between Iran and the Soviet Union dating back to 1921 called the Caspian a lake rather than a sea. Calling it a lake would specify that its waters and resources would only be divided by the surrounding countries. As a sea the United Nations Convention on the Seas would regulate the Caspian’s waters and resources, making them available to the surrounding countries as well as the international community. The equal division of the Caspian and renaming it a lake has been rejected by several of the littoral states and divisional agreements of the seabed still has not been reached. So the legal battle for the Caspian continues to quietly rage.
Countries surrounding the Caspian Sea are not the only ones that have great interest in the sea’s natural resources. Individuals, international communities (U.S., China, Turkey, EU) and multinational corporations all have a financial interest or desire to invest, in addition to those that wish to utilize the Caspian’s natural resources, and are trying to wedge their own agendas into the process, adding fuel to the fire. It would seem that the territorial disputes could not be more complex, but now the nuclear deal with Iran could cause even more legal and geopolitical wrangling. The removal of international sanctions against Iran would once again allow it to export crude oil and natural gas. Iran could potentially join the Trans-Anatolian Pipeline that would connect with the Trans-Adriatic Pipeline, allowing Western Europe to receive natural gas from the Islamic republic and nearly bypass Russia completely.
The removal of sanctions could thus be viewed as both beneficial and dangerous. These potential export developments with Iran could threaten the current revenue and natural resource funding for the other states surrounding the Caspian Sea. Historically, during previous wars and battles near the Caspian, transportation problems with oil and natural gas cascaded into the world market. Problems included deliberate sabotage of pipelines, incidental destruction during the course of battle, and improper maintenance of pipelines due to fighting in the area. So it is clear that there is no Caspian conflict that can remain a purely parochial or local problem. It will always be innately transnational. Currently Azerbaijan and Kazakhstan produce the largest amounts of natural resources from the Caspian Sea. Russia has created a monopoly on the export of natural resources, as travelling through its country’s pipelines was the easiest and most cost effective way for the resources to reach their final destinations. Once Iran is allowed to export these natural resources again it is likely that they will receive substantial international investment to increase their production levels as well as create new pipelines. It is estimated that Iran possesses the second largest natural gas reserve in the world and could produce up 600,000 barrels of oil daily. All of this potentially makes Iran the largest producer of oil and gas from the Caspian, as well as providing new transportation routes that might massively disrupt the geopolitical interests of the Russian Federation.
On the surface these changes for Iran may seem rather insignificant as the full breadth of potential power it will gain has yet to be seen. Iran could use this power to control others by withholding its natural resources or using them to influence other nations’ policies against it (in short, something like a mirror of the concerns presently being levied against Russia by the EU). Skepticism surrounds its nuclear program as countries such as Israel and Saudi Arabia view the program as a direct threat, no matter what accord has been signed. Countries who view the nuclear deal with Iran negatively may take actions into their own hands to prevent Iran from rising to its fullest potential prosperity and global integration. So the evolution of Caspian fallout from the Iran nuclear deal will likely soon show how much International Political Economy bleeds into global security concerns.
Bilateral treaties guaranteeing physical security have been created between the littoral Caspian states. In 2007, the treaties specifically included declarations of non-aggression against one another. In 2014, at the Caspian Summit, the five Caspian presidents signed a declaration to guarantee security and stability in the region by only allowing the Caspian littoral states to have their armed forces present in the Caspian Sea and agreeing to not allow military forces of any other nation to enter the sea. No longer is physical security the only concern that must be taken into consideration, however. The littoral states of the Caspian Sea, as well as the global oil and gas investors working with them, must take into account the potential for a cyber-attack. The emergence of a brave new dangerous cyber world with the Stuxnet attack on Iran’s facilities several years ago shows that Caspian security needs to move beyond expectations and definitions that are exclusively conventional. It is not implausible that a cyber-attack could determine which littoral state controls the natural resources and transnational agendas of the Caspian, especially if a serious attack like Stuxnet ever happens again. Such an attack could have devastating effects on the global community, not just the Caspian littoral states, as it is clear there is great hope from the United States all the way to China that the development of the Caspian region is something seen by all as a global economic and security priority. Thus is the nature of this fascinating region: a land full of promise and seen by many with great hope while also being laden with far too many potential minefields.