Iran has reason to be hopeful and Western business interests have cause for concern as the five Caspian Basin states gear up for a critical conference that aims to create a framework for the division of the sea's natural resources.
The Caspian equation appeared to be turned on its head following Iranian President Mohammad Khatami's mid-March visit to Russia. Khatami's summit with Russian leader Vladimir Putin, a meeting that one Iranian diplomat billed as "critical to the future of Central Asia and the Caspian region," opened the door for a substantial revision of the Caspian's division one that is much more favorable to Iran.
When Khatami arrived in Moscow, Caspian delimitation seemed the most contentious subject that the Iranian and Russian leaders would face. Iran staunchly opposes the current thinking on territorial division. Under the current draft framework, Iran would gain about a 14 percent share of the sea's territory. Tehran has argued for the littoral states to divide the resources equally, 20 percent per country, an arrangement that, prior to the summit, Russia, along with Azerbaijan and Kazakhstan, had opposed. Turkmenistan, a large natural gas supplier to Iran, has staked out a more ambiguous position, expressing verbal support for Tehran but not backing its words with much action.
Iran sought and won a postponement of the Caspian Basin meeting of the five Caspian Basin states - Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan - that was originally planned for March 8-9 in the Turkmen capital Ashgabat, until it could talk to Russia. The delay proved fruitful for Iran.
The joint declaration issued by Khatami and Putin said simply: "Until the legal regime of the Caspian Sea is finalized, the parties do not officially acknowledge any boundaries on this sea." The two leaders also said that no pipeline should be allowed to run along the seabed and that non-littoral states would be forbidden from deploying naval forces in the Caspian. The statement is viewed as a diplomatic victory in Tehran, especially since it rankled Caspian rivals Azerbaijan and Kazakhstan. Though Russia did not agree with Tehran's point of view, it did not choose to openly confront Iran either, an important point not missed among Iranian foreign policy-makers.
Western oil companies operating in nearby Caspian states have reason for concern. An Iranian-Russian alliance on Caspian energy issues could be sufficient to dash thoughts of a Turkmen gas pipeline to Azerbaijan, Georgia, and Turkey. The Khatami-Putin declaration also injects an air of uncertainty into legal ownership of Caspian oil fields, making foreign investors nervous.
Foreign investors are not the only ones showing signs of nerves. Western governments, especially top US officials, lashed out at Russia for its arms talks with Iran, spawning a Cold War style war of words between the Pentagon and Russian officials. US Secretary of Defense Donald Rumsfeld said in an interview with the Sunday Telegraph that Russia has become a "chief distributor of weapons of mass destruction" to so-called "rogue states." Deputy Defense Secretary Paul Wolfowitz wondered aloud why Russia routinely sought to counter U.S interests, especially since the U.S has offered so much aid and assistance to Russia in the past. He hinted that past assistance has not been used adequately as leverage against Russia. US Secretary of State Colin Powel also objected vigorously to the Russia-Iran talks.
Russian Security Council secretary Sergei Ivanov dismissed American objections, noting that his country would not accept ultimatums from anyone. He also took a jab right back at the United States, noting that "we are concerned with U.S military technical contacts with Pakistan
Afshin Molavi is a journalist based in Tehran, Iran. His work has appeared in the Washington Post.