Russia and Azerbaijan have come to a short-term agreement on the Gabala radar station that Russia operates in Azerbaijan, a "source close to the negotiations" told RIA Novosti.
The new agreement will extend the current lease, currently scheduled to run out in December, for another two to three years under the current terms. Azerbaijan has been playing hardball with Russia, reportedly asking for the rent to be raised from the current $7 million a year to $300 million. Russia, meanwhile, wanted to extend the lease to 2025.
Azerbaijan really holds all the cards in this scenario: it has no use for the radar and mistrusts Russia, which backs Armenia in the conflict over the disputed territory of Nagorno Karabakh. But Russia, of course, is the more powerful country and still has various means of throwing its weight around in Baku should it want to. This new arrangement seems to suggest that Russia is planning to leave Gabala after this brief extension expires. But Russia needs the Gabala radar a bit longer, while tension around Iran is high (Gabala covers the airspace over Iran) and newer radars are still under construction. Russian analyst Alexander Karavaev tells RIA Novosti:
"Judging from this announcement, Russia can still refuse to prolong the rent after this period, in two-three years. Most likely, [the radar] will remain while there is a high degree of tension around Iran, and while a new generation of radar stations are being deployed to the south," said Karavaev, referring to new, more capable radars that Russia is in the process of setting up in the North Caucasus.
From Azerbaijan's side, it may be hoping that a conciliatory gesture like this will prompt Russia to support it more on Karabakh, said Oktay Sadykhzadeh, an Azerbaijani political analyst:
"Azerbaijan decided not to strongly oppose Russia's interests, at the same time hoping for understanding from Moscow's side of Azerbaijan's interests in Nagorno Karabakh," he said.
Those seem reasonable explanations. We'll see.
UPDATE: Zaur Shiriyev, a sharp foreign policy analyst in Azerbaijan, says that for Moscow, Gabala is as much a symbol or a tool of leverage as anything, and says that losing Gabala would in fact reduce Moscow's leverage on Baku vis-a-vis Karabakh:
The Gabala radar station issue seems to be important for Russia as a means of demonstrating to the Caucasus that Moscow can manage any matter affecting its national interests. It is no secret that in economic terms, as well as for the prospects of modernization, the radar station is not promising. Even under such circumstances, Moscow sought to maintain the lease for at least ten years. This shows that Moscow's interests are now largely limited to keeping at its disposal 'tools' which can be used to put pressure on other countries, should there arise any developments counter to Russian interests.
Personally, I do not share the view that if Azerbaijan agrees favorable terms for the lease, then Moscow will take a more moderate position on the negotiations of the Nagorno-Karabakh conflict. This has not worked in the past. On the contrary, in leasing Gabala, Moscow will enjoy more time with yet another geopolitical tool.