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Caspian: A Delicate Balance Prevails

Nearly a year after an Iranian warship threatened two Azerbaijani ships in Caspian waters, tentative steps toward improved relations have prevailed. Tehran seems to have recoiled from the consequences of its own actions, although it is still struggling with Russia's plans for dividing the Caspian and its impending display of naval power.

Boston, 16 July 2002 (RFE/RL) -- Next week marks the anniversary of an event that is unlikely to be celebrated in the Caspian region, one year after the first armed confrontation between littoral states.

The incident occurred last 23 July when two Azerbaijani research ships were chased by an Iranian gunboat from a disputed oil field in the southern Caspian. The near-clash was the most serious conflict in the oil-rich waters since the Soviet breakup created five Caspian countries in place of the previous two.

Yet, despite concerns about hostilities, cooler heads seem to have prevailed in the past year. Although there has been scant progress in settling boundaries, there has also been no repetition of the encounter. Rash actions have been checked by a mix of diplomacy and power.

The first display of preventive power by Turkey followed soon after the incident, when Ankara sent fighter jets to Baku in late August for an air show that also served as a show of force on behalf of its ethnic ally, Azerbaijan. Both the United States and Russia registered disapproval of the Iranian action, with President Vladimir Putin calling the use of force in the Caspian "impermissible."

While violence was averted, the past year has demonstrated the delicate balance between the show of force on the one hand and its use on the other. Today, the Caspian countries may be more prepared for border clashes but also more wary of the damage they cause.

The immediate result of the 23 July incident was a decision by Britain's BP oil company to suspend all activity under its contract with Azerbaijan in the oil field that Baku calls Alov and Tehran calls Alborz. Since then, a pall has fallen over development in the southern Caspian, where the border may be challenged.

By contrast, activity has accelerated in the northern Caspian, where Russia and Kazakhstan have reached a bilateral deal on boundaries and sharing disputed oil fields.

Last week, the London-based industry journal "Nefte Compass" quoted Kazakhstan Energy Minister Vladimir Shkolnik as saying that tenders will take place this year on some of the country's 120 offshore structures. The new investment will come within months of the border setting with Russia in May.

Iran has protested such agreements as illegal before a five-way division accord is completed, but the lesson seems clear. Bilateral disputes block development so that neither side gains.

A similar border row between Azerbaijan and Turkmenistan has stalled work in the central Caspian since 1997 and helped kill a trans-Caspian gas pipeline that might have benefited both.

In Iran's case, the use of force also exposed weaknesses that are still causing concerns. It was never clear, for example, whether the armed expulsion was ordered by Iran's political leaders or conducted solely by the military. Within days, Iranian diplomats offered to mediate the matter and took pains to deny a buildup on the border, as if sensing the potential for self-inflicted harm.

Iran's isolation also came into focus as it found itself without allies in its dispute with Azerbaijan. Only neutral Turkmenistan gave it any sympathy at all.

Diplomacy provided an opening for improvement during the past year, as Ashgabat hosted the first-ever Caspian summit in April to resolve the decade-old problem of a legal division. But Russia's formula for splitting only the sea floor into sectors collided again with Iran's demands for either common control or a 20 percent share, which is more than its coastline would merit.

More important than the summit have been the recent exchanges between Iran and Azerbaijan, particularly since the visit by President Heidar Aliyev to Tehran in May. No border settlement has been reached as a result, but the contacts seem to have drawn a new line under how far tensions will be allowed to go.

Putin seemed to draw his own limit on fruitless diplomacy by flying straight from the failed summit to the Russian port of Astrakhan, where he ordered naval exercises for next month, just one year after Turkey's show of force. Russia's demonstration is likely to impress its Caspian neighbors. According to the official RIA-Novosti news agency, 60 vessels and 10,000 troops will take part, including air-force elements from Kazakhstan and Azerbaijan.

Moscow may also use the occasion to debut its new warship, the "Tatarstan," a 102-meter-long vessel that was turned over to the Caspian Fleet last week, according to ITAR-TASS and Russian television. The Kremlin says that observers will be present from all the Caspian states.

Iran's response to the Russian exercise has been mixed. Press reactions have grown more muted since the maneuvers were announced in April, although the daily "Abrar" warned against the move this month. The paper charged that Moscow is bent on "seriously pursuing its demands for dividing the sea's natural resources and justifying its unilateral operations in the waters," the Xinhua news agency reported.

Taking the opposite point, the daily "Hayat-e Now" reported the view of university lecturer Seyfolreza Shahabi, who argued that the exercises would serve Iran's interests. Shahabi said: "The two great coastal powers, namely Iran and Russia, must move closer to each other and ensure that smaller countries will not feel unsafe. Smaller countries should also be made to feel safe to ensure that they will not try to get closer to extraregional powers."

The view seems to reflect the judgment that Iran cannot risk its wider range of relations with Russia over the Caspian. That reasoning may now extend to disputes with Russia's neighbors, like Azerbaijan, leaving them in a nonviolent limbo, which is preferable to the danger they faced in the Caspian one year ago.