Russian President Vladimir Putin has ordered Russia's army, airforce and Caspian Fleet on the largest maneuvers in post-Soviet history. The maneuvers will take place this summer, and will include combined operations and simulate interaction between the Caspian Fleet, the Caucasus Military District, and possibly elements of the newly created Urals military district. The exercise will spread along the whole northern and central sections of the Caspian Sea, and will begin weeks after a summit of Caspian states in Ashgabat, Turkmenistan failed to produce an accord on dividing the sea's resource. In its timing and scope, the flotilla will be the strongest signal so far that Russia is going to assert its geo-political interests in the energy-rich region.

Putin's orders to Russian Navy commander Admiral Vladimir Kuroyedov infused the Navy with symbolism. Russian naval officers pointed out in the press that the Caspian fleet undertakes exercises twice a year, and is one of the more battle-worthy fleets in the country. Putin gave the directive while inspecting the Russian naval base in Astrakhan, one of the oldest Russian naval outposts, where in 1722 Peter the Great ordered the creation of a naval port and an Admiralty explicitly for projecting power in the Caspian against Iran and conquering Baku.

However, it was not a nostalgic gesture, but likely the post-summit frustration, which prompted the Russian president to resort to a show of force. On the day he made the announcement, Putin was on his way back from a summit in which Russia failed to convince its Commonwealth of Independent States (CIS) allies, as well as Iran, to agree to a division of the Caspian into national sectors. It was the first time all five presidents met to discuss the Sea's future. Putin ordered Kuroyedov to "bolster (Russian) presence here," because "the Caspian Fleet is a substantial promotion of Russia's economic and political interests," the pro-Kremlin weekly Vremya Novostei reported.

Russia's naval might, though, is only one factor in the division of the sea. The division is necessary if the energy resources hidden on the Caspian Sea shelf can reach the market. Iran and Turkmenistan seek to split the Caspian equally five ways - but Russia, Kazakhstan and Azerbaijan prefer a split into sectors relative to the length of each country's natural shoreline. This impasse seems unlikely to end naturally, and Russia's military demonstration is likely to escalate tensions even further.

For one thing, Russia's excercises may shift discussion from commercial to military terms. Some Azerbaijani observers have suggested that neither Russia nor Iran is genuinely interested in large-scale development of Caspian oil, and that both countries are employing shows of force to scare investors away. Last July Iran sent a warship to scare away two BP seismic research vessels, which were exploring for oil for an Azerbaijan project outside Iranian waters.

The announced Russian maneuvers will take on a larger scale. Russia enjoys an overwhelming military superiority in the region, which it will display extravagantly. It will engage air forces of the 4th Air Army, naval and air units of the Federal Border Guards service, and the 77th Marines Brigade, which participated in the Chechen operation. Missile- and cannon-armed super-fast hovercraft boats, which can speed up to 55 knots and carry up to 70 tons of cargo and marines, will be on display, along with giant Soviet-designed Beriev flying boats.

These will reinforce Russia's image as a military powerhouse. Other deployments will showcase its recent investments. While the government drew down or mothballed many assets in recent years, it maintained Caspian strength as a priority. Some of the modern patrol boats and smaller ships were re-deployed to Astrakhan from the Baltic Fleet. Moscow has even built a modern mobile coastal artillery system Bereg (Coast), which is currently being deployed. All military assets deployed to protect Russia's marine shelf and the border are coordinated through a rapid reaction battle management system called Bars (Snow leopard).

Officially, the announced reasons for the exercise seem innocuous. "The military never exercises for an attack; it always repels aggression - and seizes enemy territory only as an act of self-defense," jokes a Russian military history professor from one of the US military academies. The Russian navy will drill search-and-rescue, repelling drug traffickers and caviar smugglers.

Fighting against the terrorist threat is the exercise's main objective. Putin pointed out that the situation in Chechnya remains complicated, and the war in Afghanistan has not ended. Thus, the exercise will be conducted using live fire, as Putin ordered. Neighboring countries will be notified and invited to observe, even to participate in some stages of the exercise. "This is a powerful message to the neighbors, too. Watch out: either you can join us, or this [strength] will crush you. Forget about independent policy," the US professor says.

Given the recent sweep of American interests into the region, this message may take on a more nuanced, protectionist meaning. "The Caspian Sea should belong only to Caspian (littoral) states; other states have nothing to do here," said Admiral Viktor Kravchenko, Chief of the Navy Military Staff. As Turkey and the United States provided military assistance to Azerbaijan and promised aid to Kazakhstan, the address of such a statement seems to be clear. Russia's Navy could overwhelm those of the Caspian littoral states, including Iran. Only Iran theoretically has the economic muscle to build a naval force to offset the Russians, but Iran also strongly supports Russia's wish that the Caspian Sea's future be decided without the influence of the United States.

This is not the first time Putin is using the Caspian Fleet as a tool of foreign policy. In January 2001 he ordered naval exercises with live fire prior to arriving in Baku. Not surprisingly, President Heidar Aliyev of Azerbaijan had announced a "major" improvement of the relationship with Moscow, which had sometimes been rocky prior to that, especially in view of massive Russian support of Armenia in its ongoing conflict with Azerbaijan. Now, with Russia preparing exercises in the oil-rich Sea, Putin will have to decide whether to remain a "guarantor" of territorial integrity or strike a deal with Iran. His decision will affect thirsty American oil companies and capitals from Ankara to London to Washington. Many people in those capitals figure to watch Russia's naval exercises with some trepidation.