Following last month’s (August 12) Caspian Economic Forum in Ashgabat, Turkmenistan, a number of Russian commentators celebrated what they saw as a victory of the “Russian-Iranian approach,” which seeks to promote north-south trade over the east-west flows supported by the three other littoral states (Azerbaijan, Kazakhstan, and Turkmenistan) and the West. Some analysts are now even suggesting that Moscow and Tehran could soon become full-fledged allies when it comes to the Caucasus and certain other issues.
But though the two countries both seemingly want to ensure that outside powers—above all the United States, the European Union and China—do not become more important players in the region, Iran they differ significantly in their respective roles. In fact, Tehran may not be the ally in the Caspian that Moscow hopes for. It may instead be a new competitor with its own agenda and capabilities that will challenge Russia’s ability to impose unimpeded control over the Caspian both economically and militarily. Indeed, disagreements about the Caspian that prevented a delimitation agreement until August 2018 appear likely to continue, albeit in new ways that could easily become more fraught than the situation was prior to that time.
That accord, signed by the leaders of the five Caspian littoral states at Aktau, replaced the division of the Caspian that had existed between the Soviet Union and Iran since the 1930s, in which Tehran legally had control over only about 13 percent of the surface of that body of water and whose ships could not move beyond that area without serious consequences. The newly approved arrangement allows each of the five Caspian powers to have sole control over exclusion zones near their coastlines while leaving the rest of the sea surface open for the free passage of all.
This compromise involved Russia at least formally giving up its opposition in exchange for a commitment by the other four countries to exclude all outside naval forces from this inland sea (see EDM, September 26, 2018). This sticking point, apparently, ensures that Russia’s Caspian Flotilla will remain the dominant military power there, a victory Moscow has sought to reinforce by moving the headquarters of its fleet from Astrakhan, in the north, to Dagestan and by refusing to sell to Baku advanced weaponry for Azerbaijan’s navy.
In exchange, Iran backed away from its insistence that the sea be divided into five equal parts, while securing access to most of its surface area. The remaining three littoral states agreed to this arrangement because they, in turn, wanted to obtain the right to construct trans-Caspian pipelines and to develop their oil and natural gas extraction infrastructure beyond their economic exclusion zones. As written, the Aktau accord neither authorizes nor precludes such activities, which will likely be source of conflict in the future (see EDM, September 12, 2018). In short, Moscow gave up some of its economic clout in order to ensure military dominance, while Iran gave up its hope for control of a larger portion of the sea surface for access to almost all of it.
Yet, despite the celebratory tone of the Russian commentators noted above, two more recent moves by Iran show that the Aktau compromise neither ended the story of Caspian delimitation nor made Moscow and Tehran the allies that the Russians had hoped for. Rather, Iran appears to be taking advantage of the new agreement to boost its regional position not only economically but also militarily, suggesting Moscow obtained less than it has hoped for and will now have to figure out how to respond.
Economically, and with much pomp, Tehran announced that its Khatam al-Abiya construction company is building a roll-on, roll-off (RO-RO) terminal at Enzeli, on the Caspian Sea, a development that will dramatically expand the capacity and efficiency of that port by allowing trucks and trains to transship goods there. Iranian officials behind the project say that this will make Enzeli a major link in north-south trade between Russia and the Middle East, something Moscow very much wants. At the same time, however, they have stated that it will put Iran at the center of “a transit corridor between China and European countries,” something that Moscow is less interested in seeing occur because, by bypassing Russian territory, it may ultimately mean Central Asian countries will play a larger role in Beijing’s transportation and trade strategies than Russia has indicated it would like to see.
And militarily, in a move Moscow may be even more concerned about—especially given the high profile it received in the Iranian media —Tehran conducted a four-day naval exercise in the middle of the Caspian Sea, with its ships, planes, rocket complexes and marines moving far beyond Iran’s exclusion zone as established at Aktau. Admiral Hoseyn Hanzadi, the commander of the Iranian navy, stressed that Tehran in this case was acting completely independently but was open to naval cooperation with other Caspian littoral states in the future. Iran’s navy is no match for Russia’s Caspian force, of course; but its existence and readiness to cooperate with the other Caspian basin countries mean that Moscow will have to take this Iranian fleet into consideration as a potential challenge. As such, Russia may not be able to assume that the Islamic Republic is the unquestioned economic and military ally some Russians appear to believe.
Related: U.S. expands sanctions against Iran