Background

The Caspian Region, a neglected region for the last fifty years, has become the focal point of a contemporary struggle for energy resources. The Central Asian republics regained their sovereignty after the collapse of the Soviet Union in 1991. However, recent discoveries of significant reserves of oil and natural gas in the region have redirected the attention of Russia and the United States to the region.

Some 30-180 billion barrels of oil and 7.9 trillion cubic meters of natural gas are estimated to rest in the Caspian basin – virtually all of it in Kazakhstan, Turkmenistan, and Azerbaijan. Thus, though the region is saddled with political unrest, ethnic conflict, and more than a dozen violent secessionist rebellions – some of which could spread far beyond across national borders – the Caspian also offers significant strategic and economic advantages to any power that can control it.

As a result, military threats, diplomatic plots, and political power games have dominated the region. Russia, Turkey, Iran, and even China, all scramble for influence and power, while the newly independent states in Central Asia and the Transcaucasus are caught in the middle. The investment of billions of dollars by giant international companies has magnified the issues, as proposed pipelines pit state against state, leader against leader, and often bring neighboring republics to the brink of war.

The Caspian's vast natural resources, the active participation of some of the largest American oil companies, and the involvement of Washington's strategic ally (Turkey), as well as its strategic enemy (Iran), could not help but draw the United States into the fray. Consequently, the US overall geopolitical strategy in the region now hinges, in large part, upon the outcome of the above mentioned struggle over the control and transportation rights of Caspian oil and gas.

Accordingly, the current struggle over the Caspian energy rights cannot be properly analyzed if examined merely in terms of lift and shipping costs or pure economic analysis of proposed pipeline routes. Though large consortia, such as the CPC (Caspian Pipeline Consortium) and the AIOC (Azerbaijan International Operating Company) play a role, they do so only in the context of the geopolitical contest for power.

To be fully understood, the issue of the Caspian energy must be put into the context of the historic and geographic background of the region, as well as the ever-evolving political and economic environments of the various states currently active in area, particularly Russia, Turkey, and Iran.

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