To many, the nuclear deal with Iran spells security. But to Azerbaijan, Iran's northern neighbor, it also spells a business opportunity.
Already, the energy-rich South Caucasus state is positioning itself to export not only its own natural gas to Europe, but Iran’s as well. And though international sanctions still remain in place, Tehran sounds willing to consider the idea.
The Azerbaijani and Iranian governments, according to Iranian Ambassador Pakayin, are getting ready to start bargaining over joint supply options.
The prospect opens some potentially interesting scenarios in the region’s high-stakes energy-chess game; particularly for Russia, the world’s largest gas producer, on which Europe depends.
Iran boasts about 18 percent of the world’s natural gas supplies, according to Fitch Ratings.
Azerbaijan's new naval base in Puta, inaugurated in June 2015. (photo: president.az)
The Caspian sea states will discuss creating a "collective security system" on the sea at a meeting in Russia this fall, a Russian military official announced.
Russia's top naval commander, Admiral Viktor Chirkov, met with naval delegations from Azerbaijan, Iran, and Kazakhstan last week in St. Petersburg, and afterward announced that the states discussed creating a consultative organ of all the Caspian sea navies and a collective security system, and signing an Agreement on the Prevention of Incidents on the Caspian.
"During the meetings with [Admiral Chirkov] the delegations confirmed their readiness to work on these issues, and agreed to conduct the first round of corresponding consultations in Russia in October," the statement from the Russian Ministy of Defense said.
The idea of a collective security system was first publicly mooted by Russian Defense Minister Sergey Shoigu last year in Baku; Chirkov's comments suggest it is moving forward.
The notion of collective security on the Caspian is a bit odd; it wasn't explicitly mentioned which of the five states would be involved in the organization, but the goal is presumably for all of them to be. And then, on a closed sea with no other potential enemies, the idea of collective security is overkill -- from whom would they be defending themselves?
Russian President Vladimir Putin meets with the foreign ministers of the Shanghai Cooperation Organization member states in Moscow on June 3. (photo: Kremlin)
The Shanghai Cooperation Organization will "upgrade" Iran's status in the group if Tehran reaches an agreement with international powers on its nuclear program, Russia's foreign minister has said. Meanwhile, China is pushing for the organization to take a greater role in regional security.
The SCO foreign ministers met in Moscow this week in preparation for the July 9-10 summit in Ufa. It has been clear for some time that this would be an expansion summit, at least for India and Pakistan. Those countries are now observers, but have sought full membership for years. Speaking to reporters after the meeting, Russian Foreign Minister Sergey Lavrov said that: "If relevant decisions are made in Ufa, they will pave the way for the SCO’s extension, and India and Pakistan will have an opportunity to launch the initial procedures for joining the SCO."
The SCO now includes China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. China has been the main driver of the organization, and in recent years it had taken on more of an economic role than the military or security role it seemed to aspire to when it formed in 1996. But the crisis in Ukraine has reenergized Russia's attempts to find non-Western allies, and since then Moscow given the SCO much more of its attention.
Giving away perhaps the last opportunity for energy independence, Armenia plans to sell its 41-kilometer-long section of an Iranian natural-gas export pipeline to Russian energy leviathan, Gazprom. The decision leaves Moscow in full control of natural-gas supply routes to Armenia.
Armenia Energy Minister Ara Simonian assured Radio Free Europe/Radio Liberty, however, that the terms of a state license will not allow Gazprom Armenia to mess with imports from Iran.
Those imports, though, are just a quarter of the annual 2 billion cubic meters Armenia receives from Russia, its economic and security patron.
Moscow is believed to use its position as Armenia’s economic, energy and security patron to ensure the country’s fealty – a situation that does not necessarily make it tolerant toward market-competitors.
Moscow first tried to set a limit to the Iranian-Armenian pipeline’s diameter and, hence, its supply capacity. Then, Gazprom muscled its way into taking over domestic distribution and, now, all import infrastructure.
Commenting on the takeover of the Iranian pipeline, Gazprom Armenia, Gazprom’s local distribution monopoly, said that it only made business sense to let one company operate the country’s supply-and-distribution infrastructure.
With the world’s fourth largest gas reserves, Turkmenistan has enough to keep everybody happy. But for the remote Central Asia country and its suitors, taking the potential and turning it into a prize has proven persistently difficult.
Last week, the European Union’s energy boss, Maros Sefcovic, was in Ashgabat speaking positively – some might even say delusionally – about a $5-billion-plus trans-Caspian pipeline that would pump up to 30 billion cubic meters of Turkmen gas underneath the world’s largest inland sea and onto markets in Europe. The link, Sefcovic said, in comments reported by AFP and Reuters, could be ready to pump by 2019.
But it was another proposal he made – about a pipeline across Iran – that has intrigued analysts.
Other than China, which imports upwards of 35 billion cubic meters (bcm) of Turkmen gas per year, Turkmenistan sells to Russia (4 bcm) and Iran (around 10 bcm). Both are net exporters and perennially threaten to cut their imports. Russia made good on its threat earlier this year by reducing imports from around 10 bcm.
While Sefcovic was talking up the Trans-Caspian Pipeline, Afghan President Ashraf Ghani was playing down another connection viewed as vital to Turkmenistan’s ambitions: The Turkmenistan-Afghanistan-Pakistan-India pipeline (TAPI) which has been on drawing boards since the 1990s and could cost as much as $10 billion.
Iranian President Hassan Rouhani tried to end uncertainty about Iran’s desire for Turkmenistan's gas during his first official visit to the gas-rich Central Asian country on March 11, promising an unspecified increase in imports.
Over the last few years, at least in terms of gas, Turkmenistan’s relationship with Iran has been second only to its relationship with Russia in volatility. Tehran makes occasional noises about boosting domestic production and doing away with a tiresome trade pickled with disputes.
But during his visit Rouhani confirmed that the Islamic Republic would up imports from Turkmenistan.
That must be music to Turkmen President Gurbanguly Berdymukhamedov’s ears. The Turkmen economy has been struggling on the back of the sharp downturn in Russia and the slumping ruble; moreover, Moscow suddenly slashed imports of Turkmen gas last month.
Referring to increased transport links with Turkmenistan, such as the new Kazakhstan-Turkmenistan-Iran railway, Rouhani set an ambitious target for bilateral trade to grow by more than 15 times from its current $3.7 billion to $60 billion by 2020, his official president.ir website cited him as saying.
For his part, Berdymukhamedov was also effusive: “In recent years, given the growing cooperation in different fields, bilateral ties between Tehran and Ashgabat have taken on a new meaning,” said the Turkmen president, who also called Rouhani a “brother” in comments picked up by AFP.
The Damavand destroyer, which formally entered service in Iran's Caspian sea fleet on March 9, 2015. (photo: MoD Iran)
Iran's newest, most capable warship in the Caspian Sea has formally entered service following a March 9 ceremony at the port of Bandar-e-Anzali.
While Iranian officials played up the technical capabilities of the new ship, they also noted that one of its missions would be training, highlighting the fact that the Caspian remains a very secondary strategic priority for Tehran.
The ship, the Damavand, is a Jamaran-class destroyer with more sophisticated weapons than the original Jamaran, with "highly advanced anti-aircraft, anti-surface and anti-subsurface missile systems" and "capable of tracking and targeting aerial, surface and sub-surface targets simultaneously," Press TV reported. It entered sea trials in 2013.
"The operational radius of Damavand is so vast that it can sufficiently be used for all naval missions in the Caspian Sea," Head of the Self-Sufficiency Jihad Department of the Iranian Navy Rear Admiral Ali Qolamzadeh told Fars News Agency. But he added that it also could be used for "training missions," suggesting a rather less strategic focus. (The Caspian has traditionally been a site for Iranian naval training; during the Soviet era that was the sea's sole purpose for the Iranian navy.)
The Secretary of Iran's Supreme National Security Council, Ali Shamkhani, attended the inauguration and called the Caspian a "sea of peace, friendship and security." And he repeated the oft-made claim that "outside powers" (read: the United States) are trying to sow dischord on the sea.
Russian President Vladimir Putin meets with Iranian envoy Ali Akbar Velayati in January. (photo: Kremlin)
Iran may be admitted into the Shanghai Cooperation Organization this summer if it makes progress in resolving disputes over its nuclear program, Russia's foreign minister, Sergey Lavrov, has said.
It already seems clear that India and Pakistan, who have both long sought SCO membership, will be admitted at the organization's summit this July in Ufa, Russia. Iran -- which also has been trying for years to enter the SCO -- has been hampered by the fact that it is under international sanctions related to its nuclear program.
But when a senior Iranian official, Ali Akbar Velayati, visited Moscow in late January, he reportedly gained the Kremlin's approval for SCO membership.
"Velayati’s Moscow trip might signal that some kind of a significant change in relations is about to take place. Iran’s Mehr News reported that in Moscow, Velayati was able to secure Putin’s approval for Iran to 'upgrade its status' in the SCO," noted regional analyst Alex Vatanka. "As an observer state in SCO, Iran has since 2005 unsuccessfully sought to obtain full membership in the organization, but perhaps the Russians are about to entertain the idea of Tehran joining the alliance. Along these lines, the state-run Iranian media have been busy hyping the prospects of an SCO membership for Iran."
The defense ministers of Russia and Iran, Sergey Shoigu and Hossein Dehghan, sign an agreement in Tehran. (photo: MoD Iran)
Russian Defense Minister Sergey Shoigu has made a rare visit to Tehran, where he and his Iranian counterpart promised "accelerated" military cooperation between the two countries.
Shoigu's visit was the first to Iran by a Russian defense minister in 15 years, and both sides played up the potential geopolitical import of the trip. "Iran and Russia are able to confront the expansionist intervention and greed of the United States through cooperation, synergy and activating strategic potential capacities," said Iranian Defense Minister Hossein Dehghan. "The visit to Tehran is a geopolitical movement towards an alliance between Russia and Iran," wrote Rossiya Segodnya analyst Aleksandr Khrolenko. "It's not just the development of military relations between the two countries, but a continuation of Russia's pivot to the East."
The two sides signed an agreement on defense cooperation, which called for joint exercises, port visits by naval vessels, and a joint fight against piracy in the Caspian. But those things were already going on, and it's not clear what new forms of cooperation might be in the works.
The presidents of Kazakhstan, Turkmenistan, and Iran have opened a long-anticipated railroad link connecting landlocked Central Asia to the Persian Gulf.
On the Turkmen-Iranian border, Gurbanguly Berdymukhamedov of Turkmenistan, Hassan Rouhani of Iran, and Nursultan Nazarbayev of Kazakhstan donned white gloves to bolt together a final section of track that was symbolically colored gold, the Associated Press reported, inaugurating the last stage of the freight link that they hope will herald a boom in trade between the three Caspian littoral states.
Highlighting those expectations, the first cargo to cross the border between Turkmenistan and Iran on December 3 was a wagonload of wheat from Kazakhstan.
The line – which carries only freight but may carry passengers later – has an initial capacity of 5 million tons per year, projected to rise to 12 million tons. Forecasts suggest the new line could triple trilateral trade in the short term from 3 million to 10 million tons, and double it again by 2020 to 20 million.