Ceyhun Osmanli: “Oil not ‘the decisive factor’ in USA’s Caspian policy”

New geopolitical actors whose actions were prompted by both political and economic interests started to emerge in most key regions of the former empire after the collapse of the USSR. For example, China significantly improved its position in Central Asia over the past 20 years through economic projects and investments, greatly needed by the technically outdated economy and infrastructure of the region. Meanwhile, several ambitious actors appeared in the Caucasus, but time showed that not everyone had the resources to match their plans.

Immediately after the South Caucasus countries declared their state independence, three geopolitical subjects, which continue to see the Caucasus as a sphere of their vital interests – Turkey, Iran and the West – stepped up their diplomacy in the region. When speaking about subjects in regional policy, we should certainly not forget the role of Russia either, a traditional actor in Caucasus politics. Russia was clearly seeking to preserve control over the region by all possible means, up to inciting interethnic conflicts. Such bloody conflicts as the Azerbaijani-Armenian war in Karabakh and the confrontations in Abkhazia and South Ossetia arose thanks to Russia’s traditional imperialist policy. However, further events showed that Russian strategists were wrong and local conflicts could not stop keep out Western capital or suppress the regional countries’ desire for independent progress.

The increased activity of Iran, whose interests contradicted the strengthening of the West’s positions in the Caucasus, concerned Azerbaijan more than other countries of the region. The ruling circles of Iran saw a threat to the unity of their country in the restoration of independent Azerbaijani statehood, because more than 35 million ethnic Azerbaijanis live in the territory of the Islamic Republic and repeatedly demanded independence with arms in their hands throughout the 20th century. However, in the first days of independence Iran tried to fix its positions in Azerbaijan with slogans about Islamic solidarity, but the patriotic wave, bracing the country at that time, threw away even Islam, a centuries-old system of moral values of the nation. By failing to attain the goal directly, Iran decided to act differently by supporting the main opponent of Azerbaijan – Armenia, the aggressor country, which occupied 20% of Azerbaijani land with Moscow’s support. By way of political pressure on Azerbaijan through the Armenian factor, Iran tried to force Azerbaijan’s then pan-Turkic government, headed by Abulfaz Elchibey, to make concessions, but in vain. The effect was the opposite. Azerbaijan, at the state level, started to accuse Iran of betrayal regarding Islamic interests. Baku started to make appeals on the need to unite with Southern Azerbaijan, which is part of Iran. Iran’s reaction was hysterical and relations between the two countries further deteriorated. As a result of great tactical mistakes in Caucasian policy, caused by foolish ambitions, Iran failed to establish its position either among the masses or the political elite of Azerbaijan. On the other hand, Iran’s strengthening in the region was largely resisted by the West and its ally Turkey which had great influence among the Muslim population of the South Caucasus.

Turkey, the first country to recognize the state independence of Azerbaijan, closed its borders with Armenia immediately after the start of the Armenian occupation of Karabakh, thus showing solidarity and support for Azerbaijan. Common ethnic roots, historic self-awareness, common language and finally, common enemies made Turkey and Azerbaijan natural allies. The result of such sentiments became the appearance of the famous statement that “Azerbaijan and Turkey are two states, created by one nation”. Naturally, along with fraternity, Turkey had serious political and economic interests in the Caucasus and their implementation directly depended on Azerbaijan and its neighbour Georgia. Therefore, immediately after Azerbaijan, Turkey started to establish strong ties with Georgia, which Turks considered an effective and reliable corridor in relations with Azerbaijan. Geographically, Azerbaijan and Turkey have no common borders except for the 11 kilometre frontier in Nakhchivan. Meanwhile, Nakhchivan is an exclave, separated from the main territory of Azerbaijan by Armenia.

Turkey’s active policy was soon effective. This was supported by the Western superpowers, primarily the United States. Washington understood that oil, mostly concentrated on the Azerbaijani coast, is the key to the Caucasus and the whole Caspian basin. Turkey was the most effective mediator with Azerbaijan, since Azerbaijan was ready to welcome a country that was an ally and strategic partner of Turkey; in other words, the thesis “my friend’s friend is my friend” ruled in Azerbaijan. From the early 1990s, the West, which was doing its best to get back the lost oil monopoly in this region throughout the whole existence of the USSR, came back to the Caucasus 70 years later in the form of the United States. This time Western strategists, which had bitter experience of the past, had serious plans and Turkey was the best ally in this case. Almost all political powers in Azerbaijan and Georgia were glad about this and the young state initially saw it as strong support for their independence and an effective guarantor for further economic development. However, the West, particularly, its vanguard – the United States – had its specific interests in the Caspian region which showed two sides of the coin. On the one hand, the United States tried to do everything to control the oil sector and the main routes for energy export in Central Asia and the Caucasus. On the other hand, Washington had further plans for geopolitical strategy in the region, since without fixing its political positions, the United States could not hope for economic success.

Most experts agree that these factors forced Washington to hurry to recognize the independence of the regional countries, especially those rich in oil and gas. Three months after Azerbaijan declared its independence (18 October 1991), the United States had not only recognized its independence, but also established diplomatic ties at the level of embassies (February 1992). In May 1992 Kazakh President Nazarbayev paid an official visit to the United States and the sides signed an interstate treaty during the visit. The political and economic outcomes of this visit appeared soon and in 1993 US Chevron Overseas Petroleum and the State Oil Company of Kazakhstan, Kazmunaygaz, signed an agreement on the creation of the joint venture Tengizchevroil.

The United States chose the same line of economic cooperation in the oil sector in relation to Azerbaijan. However, for political reasons, the talks with Baku were kept secret for a period. Swiss researcher Eric Hoesli in his book “On the Conquest of the Caucasus” draws a clear picture of the oil negotiations between the West and Azerbaijan: “After coming to power, Heydar Aliyev (15 June 1993) shows the determination to follow the way planned by his overthrown predecessor. It was out of the question to keep Azerbaijan fully commercially and politically dependent on Russia. Baku was to fight for its recovery in an alliance with big Western companies. But, the political board, the old fox, hard-tempered in the flame of fights, chose a more cautious and delicate approach. The loud statements about the independence or symbolic visits to Russian opponents ended. The public fanfare during Baku meetings to incite nationalistic sentiments amongst the masses was forgotten. He instructed his son Ilham to start secret talks with oil giants. The meetings were held abroad, far from Baku where there were many Russian ‘ears’ and where it was very difficult to guarantee the security of foreign businessmen. Soon six and then 12 companies, including Amoco and BP, which had already taken positions during the previous regime, stated their interest.”

Azerbaijan’s conduct was quite clear and substantiated. By offering oil to the West, Baku was planning to achieve two main objectives, which directly determined the future of Azerbaijani statehood. First, to attain a real guarantee of independence and political stability from the West by way of big capital investments; second, to ensure constant revenues for the country and rebuild the destroyed economy with the petrodollars, expected from contracts signed with the West. In a few years, the current president, Ilham Aliyev (then [vice-]president of the State Oil Company of Azerbaijan) would admit openly that for the then leadership of the country oil was only the means to preserve statehood. “We used oil to attain our main goal to become a real state.”

Heydar Aliyev made another successful step to ensure the success of the oil strategy – he stopped the bloody war between Azerbaijan and Armenia by signing a temporary ceasefire agreement in spring 1994. This step was a specific diplomatic strike on Russia, which was using the conflict in an attempt to delay US penetration in the region as long as possible. Moscow’s aggression and outrage grew more open afterwards. Hoesli writes the following: “News from Baku causes concern and irritation in Moscow. There is an impression that the new president intends to observe Moscow’s interests no more than his predecessor, overthrown in a putsch.

“The international legal status of the Caspian Sea is subject to dispute even amongst the best specialists in maritime law. Will Baku dare to permit littoral concessions in such conditions?

“In summer of 1994 the Russian Defence Ministry ordered the Caspian Flotilla to consolidate ordinary patrols in the open sea to reveal any de-facto attacks on sovereignty. Similar measures are taken by Iran, which shares the point of view. In April Russia sent an official protest to Great Britain, threatening to go to the UN after the British and Azerbaijanis signed a modest agreement on ‘energy cooperation’, which implied research work offshore.”

Despite all the threats from Russia, the West made it clear that it did not intend to give up and repeat the mistakes of 1920, when the People’s Republic of Azerbaijan collapsed without the military and political support of European states.

Finally, on 20 September 1994 Russia again faced a cold shower; the leading oil giants of the West and Azerbaijan signed the “contract of the century”, as it was dubbed by specialists. This agreement envisaged huge investments in the oil sector and joint production and export of Caspian oil. Azerbaijan ensured the participation of Russia’s Lukoil in the agreement just for ethical considerations, though the Russians’ share was minimal and even symbolic.

It was then possible to say that the United States had fully penetrated the Caucasus region and got Caspian oil. Moscow’s nightmare became true: “The Yankees had come right to Russia’s gates.” Why was this process met by hysterical behaviour from Russia? What did Moscow fear in this? Did it fear the strengthening of small Azerbaijan, which posed no threat to Russia in either military or economic terms? It would be ridiculous to believe it. Probably, Russia was concerned at the loss of control over Caspian oil, which Azerbaijan was trying to supply to the West. To some extent it was, since Azerbaijan was attempting to reduce Moscow’s economic leverage to zero. However, Moscow had different ways to put pressure on Baku and there were no special reasons for such a painful reaction. It means that Moscow was concerned by quite different, more dangerous prospects for its national interests. It would be correct to look for these reasons in Washington’s confidence and persistence on the Caucasus and Caspian policy. If we find out the key moments in these interests, we will understand the reason for Moscow’s concerns. We won’t try to make recondite suggestions on this and will instead leave it to the Americans who can tell us about their political priorities better than anyone.
Let’s first listen to analysts. In an analytical piece, famous American expert Sherman W. Garnett wrote: “The roots of US policy aimed at expanding the country’s participation in the Caspian region go into the administration of Bush Senior.”
In his work “Energy Super bowl. Strategic Politics and the Persian Gulf and Caspian Basin” (Washington, 1997), US energy expert Geoffrey Kemp described the Caspian region as a key link in the middle of many geometric and geopolitical structures”, one of which is the “strategic energy ellipse”.

Another American expert Norman Levine was more open in his judgment: “US policy in the Caucasus and Central Asia is to weaken the commonwealth and control oil and gas pipelines originating from the Caspian region. This is the policy of ‘new restraint’ in the post-Cold War era.” Meanwhile, Zbigniew Brzezinski in his analysis clearly explained the essence of American oil strategy in the Caspian region: “Clinton deserves recognition for the initiative, which further became an obstacle to the recovery of Russian imperialism. Such an obstacle is the BTC pipeline, sponsored by the United States. The essence of this pipeline is to provide direct access to the Caspian and Central Asian oil for the West.”

Now let’s view the opinions of US officials given at different times, on Washington’s long-term Caspian strategy. The former vice president of the United State, Dick Cheney, who often paid visited the Caucasian countries during his time in office, repeatedly acknowledged the great importance of the Caspian region in US policy at the time: “I cannot give another example, when a region suddenly acquired such great strategic importance, as did the Caspian Sea.” In 1998 another official, representing the interests of the White House, released a list of the USA’s main interests in the Caspian region: “To ensure the independence and sovereignty of the Caspian states, raise and diversify world energy sources, ensure regional cooperation in the Caspian Sea, support oil companies of the United States and put pressure on Iran to change its policies”. US Energy Secretary Bill Richardson, hinting at the inseparable nature of Washington’s energy and political interests in the Caspian region, also spoke similar goals: “I speak about US energy security, which depends on the diversification of oil and gas sources throughout the world. It also envisions the prevention of strategic infringement by those who do not accept our values. We are trying to turn the newly formed states to the West. We would prefer these countries to rely on Western commercial and political interests rather than choose a different way. We have invested significant political capital in the Caspian region and it is important for us to develop proper pipeline schemes and policies.”

I don’t think any comments are needed. The following conclusions can be drawn:

1. The United States attaches special importance to the Caspian region, considering it a guarantor of the energy security of the West.
2. The rich oil reserves of the Caspian region allow the United States to drag the countries of this region away from Russian pressure and to provide their energy sources to Western markets, bypassing Moscow.
3. The Caspian region is an important key in US geopolitical plans, which Washington intends to use in its new Middle Eastern strategy.
4. The Caspian region is an effective foothold for Washington, as it is located directly on the southern borders of Russia, the USA’s main rival in the region.

However, during the Iraqi campaign the United States attempted to create an alternative foothold in the East in the shape of Iraq, but the complete failure of Washington’s political settlements made American strategists treat the Caspian region with great care. Naturally, oil is an important factor, promoting the Washington’s interests in the Caspian littoral region, but it is not the only factor and far from being decisive, since the main oil reserves of the Middle East are under direct US control, while the oil potential of the Caspian Sea is not great compared to the reserves of this region. However, the United States is trying its best to retain its position here, aware that the Caucasus is a direct, short and most favourable way to control the Middle East overall and Russia. It means that gradually the oil Caucasus will give way to the geopolitical Caucasus in Washington’s strategic plans. Those who expect the United States to leave this region soon after the oil resource is exhausted are not right. Throughout its history, the Caucasus has been under constant attention from the superpowers, and the important geopolitical location of the region was the main reason for this until the mid-19th century. The oil factor arrived only in the mid-19th century and started to influence international politics. It is likely that once the oil era is over the Caucasus will not lose its importance.

Against this background, it is impossible to agree with those who consider the current confrontation between the United States and Russia for spheres of influence in the Caspian region to be a specific continuation of the rivalry between England and Tsarist Russia for Central Asia and the Caucasus, which continued throughout the 19th century. Americans also do not specially hide it. For example, the US secretary of state’s assistant, Richard Butler, wrote: “Currently, oil, its production and transportation are the main prize and Afghanistan has again become a disputed area. The difference is that in this case this game with Russia will be conducted by the United States.” Note the use of “currently”, where the author hints at the temporary measurement of US national interests. Naturally, tomorrow the nature of interests will change. In order to keep losses to a minimum at a time of change in Western interests, the Caspian countries must be as cautious as possible. For this, it is necessary to watch closely the conduct of the main players and to adjust to new waves of geopolitical change in as timely a fashion as possible. This is the only way to survive.

The Nomos Centre is a Ukrainian think-tank. Its full name is the Centre for Assistance to Studies on Geopolitical Problems and Euroatlantic Cooperation of the Black Sea Region.

Jeyhun Osmanli is an independent member of the Azerbaijani parliament and chairman of the Ireli public union.

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