Iranian approach. Why is Teheran not ready to ratify the Caspian Accord?

The Caspian Sea, different from the Persian Gulf and the Strait of Ormuz, never constituted a priority for the foreign policy of Iran. Teheran always viewed the Caspian region as the sphere of influence divided between Iran and the USSR. However, after the disintegration of the Soviet Union resulting in the new states emerging in the region – Azerbaijan, Kazakhstan and Turkmenistan – it became clear that the agreement had to be achieved not only with Russia.

Today the Caspian Sea and the entire region has turned into a more complicated zone with respect to delimitation and distribution of resources in its subsoil. Numerous meetings between diplomats of the «Caspian five» countries were held: 12 meetings of Ministers and 5 summits, and then the first agreement regulating the legal status of the Caspian Sea in the post-Soviet space was signed on 12 August 2018 in Aktau, Kazakhstan.

Taking into account the thorny path to this Convention, lying through overcoming numerous contradictions between the parties, signing it looked like a big success story. However, despite the fact that the leaders of all five Caspian states supported the document, it still has not come into effect. This is associated with the fact that Iran, the only one out of the five, has not ratified the Caspian Accord. Despite the calls [1] from Moscow to facilitate this and the assurances of the ex-Minister of Foreign Affairs of Iran Mohammad Javad Zarif about bringing the respective bill to the parliament, things are still where they started. Admittedly though, Teheran has got its reasons for that.

On a lonely mission

Initially, Iran did not see a problem with division of the Caspian Sea after the USSR disintegration: in the opinion of Iran officials, the agreements executed with Soviet Russia in 1921 and 1940 about the «fifty-fifty» division of the Caspian Sea could easily stay in effect. That meant that Teheran would keep 50%, and the remaining half had to be divided between Russia and the newly formed post-Soviet states. It is easy to guess, this could not satisfy the other stakeholders. Moreover, the above-mentioned agreements regulated only the shipping traffic and the fishing in the Caspian waters, they did not mention use of subsoil or transit transportation relations.

It should also be noted that Azerbaijan, Turkmenistan and Kazakhstan were actively striving for self-fulfillment and monetization of the Caspian Sea resources bringing them to the foreign markets as soon as possible. At that point of time, these tasks were their priorities, so they dodged the legal problem of splitting the Caspian Sea into sectors. Eventually, the new republics decided to explore and produce hydrocarbons at any point of the Caspian Sea, which led to escalation of tension between the countries in the coastal area. A new mechanism of legal regulation was required.

The Convention on the legal status of the Caspian Sea was to become such mechanism. Nevertheless, the key question about the principle of division of the sea-bed, resources and the water zone between the five countries remains open. It should be understood, that the Caspian countries have their own views not only on the principle of division, but on the subject to be divided as well. For example, Iran insisted on dividing both the Caspian Sea water table and the sea-bed into equal parts, i.e., 20% for each party. This would increase the Iranian sector twice versus the coastline, but Russian was against dividing the Caspian water zone, as it would lead to breaking the regime of economic use of the basin having developed for 70 years.

Azerbaijan, Kazakhstan and Turkmenistan were in favor of the «median» method of dividing the Caspian Sea bottom and water area (every point of such border line should be equidistant from the respective closest points at the coastal line of these countries). In this case, Iran would get only 14%. Naturally, Teheran is unhappy about that, especially that it may get the section not very rich with resources, some experts say [2]. It should be noted that Iranian coastline has a concave shape, which makes the use of the median method the least fit for the Islamic Republic of Iran. This fact was duly appreciated in the Convention: the agreement on future negotiations to establish the baselines executed between the parties speaks about the need to take the unfavorable coastal shape into account.

Hence, the method of establishing the baselines should be defined in the process of penta-lateral negotiations of the Caspian countries. As for the seabed and the resources, this issue was settled in the Northern part of the Caspian Sea by way of executing bilateral or trilateral agreements [3], but the Southern part remains, and here Iran needs to somehow achieve the agreement with Turkmenistan and Azerbaijan.

Domestic response

Despite diplomatic success and achieving the compromise by «the Caspian five», signing the Convention was not absolutely positively perceived by the public in Iran. In social media, the ex-President of the country Hassan Rouhani was accused in treason and trading national interests, breaching the territorial integrity of the country [4].

In the opinion of the former member of Iranian parliament, foreign relations professor Elaheh Koulaei [5], the country chose inopportune time for resolving such issues as execution of Aktau agreement. According to her, Teheran’s positions were noticeably weakened by unilateral exit of the USA from the Joint Comprehensive Plan of Action (JCPOA) for the Iranian nuclear program. In particular, the expert reminded that when the US President George Bush Junior in 2002 reckoned Iran among «the axis of evil», the Caspian countries tried to exclude the Islamic Republic of Iran from the negotiations at the first summit in Ashkhabad. Elaheh Koulaei draws a parallel with the increased pressure on Teheran by President Trump in 2018 and believes the results of Aktau meeting to be negative for Iran, because the nation’s interests were ignored.

At the same time, the leaders of the I.R. of Iran emphasized several times, that the national interests were not strangled by execution of the Caspian Accord. The officials claim [6], that Iran will continue to strive for the most beneficial distribution of the Caspian Sea resources in accordance with the principles of the territorial integrity. Until all the lawful interests of Iran are taken into account, the parliament shall not ratify the Convention.

It is quite possible that ratification of the document was procrastinated due to the unwillingness of the former leaders, President Rouhani (the reform figure) first of all, to undertake the responsibility, especially in the context of sharp criticism of this agreement on behalf of the public. In theory, Ebrahim Raisi (the conservative figure) after coming to office in June 2021 could have facilitated the ratification process, in particular, because the Convention regulates some issues of special importance for Iran with respect to the Caspian Sea. One of such issues is the Trans-Caspian Gas Pipeline (TCGP).

Caspian gas

The Trans-Caspian Gas Pipeline is the project, which is of significant concern not only for Iran, but for Russia as well. The 300-km offshore pipeline is planned to connect Turkmenistan, Kazakhstan and Azerbaijan, supplying «the blue flame gas» via Turkey and then via the Trans Adriatic Pipeline (TAP) to the EU countries. The Trans-Caspian Gas Pipeline is the last missing piece in the puzzle of Southern Gas Corridor designed to diversify the energy resources supplies to Europe. Just like Iran, Russia has a negative view of the competition on behalf of Ashkhabad in the global market of hydrocarbons. Their position is underpinned by the environmental concerns: the argument of Moscow and Teheran against the above-mentioned project is the potential threat to the Caspian Sea environment and its biological diversity [7]. It should be noted that the Convention neither permits nor prohibits the construction of the Trans-Caspian Gas Pipeline, it just points out that implementation of major maritime projects should mandatorily take into account «the environmental factor» and should be discussed with all the Caspian countries. Due to the position of Teheran and Moscow, implementation of this major project has been delayed for many years.

Understanding the impossibility to further strangle the Trans-Caspian Gas Pipeline construction using the roundabout ways, Teheran took a step further and decided to improve the relations with the regional gas sector players. Thus, in November 2021, Iran executed the agreement with Turkmenistan and Azerbaijan about swap gas supplies [8]. According to this agreement, Turkmenistan will be sending to Azerbaijan via Iran from 1.5 to 2 bcma of natural gas. In June 2022, Iran and Azerbaijan confirmed their intent to double such swap supplies [9]. The Teheran’s rationale is quite simple: expansion of the trade with Turkmenistan will give Iran the possibility to participate in transit routes and gas transit corridors.

If the relations between Teheran and Ashkhabad continue to improve against the background of increasing the swap volumes, then the construction of the Trans-Caspian Gas Pipeline bypassing Iran may be suspended for an indefinite period.

Turkmenistan, in its turn, is looking forward to certain benefits from using the Iranian gas distribution network, and the key benefit is avoiding the investment into laying new pipelines. The agreement between Teheran and Ashkhabad means not just supplying 1.5 bcma of gas, it is designed to change the balance in the gas market, and the first step has been made on this way. Thus, the energy issue associated with the Convention is no longer acute for Iran.

Security issues

Against the background of ambiguous attitude to the Caspian Convention inside Iran and in the context of the Trans-Caspian Gas Pipeline problem not being so acute anymore, it may appear that the I.R. of Iran has minimum interest in the Caspian Accord. However, there is the security issue holding a special place in the foreign policy of Teheran. In this respect, the Convention may provide certain guarantees, which meet the Iranian interests.

Over the recent decades, the main purpose of the I.R. of Iran was to squeeze out the Western forces from the region, first of all, the USA. With this purpose, Teheran supported the existing anti-American forces and created its own proxy-organizations in Iraq, Afghanistan, Syria, Lebanon and other countries. Missile attacks by Shia Muslim groups on certain US facilities in Iraq, indirect interaction with Taliban movement in Afghanistan, regular dangerous rapprochement of Iranian missile boats with American warships in the Persian Gulf – all of that is targeted at pressure buildup to push Washington out of the region.

At the same time, the USA is only the primary problem for Teheran. In the long-term, the Islamic Republic of Iran is interested in having absolutely no forces from the countries other than the Caspian region countries close to its borders. This position is reflected in public statements of Iranian politicians on a regular basis [10]. Finally, we should not forget about one more irritator for Teheran – Israel, which is following the path of improving the relations and expanding the cooperation with a number of the Middle East and South Caucasus countries.

In the Caspian Sea case, the aspirations of Iran in many aspects coincide with the position of the Russian Federation. Eventually, both countries insisted on the Convention fixing the inadmissibility of deployment of military contingents and facilities of the non-Caspian countries in the water area of the Caspian Sea.

Over the recent years, this provision has become even more relevant. For example, Iran monitored the process of settlement of the Karabakh conflict with great concern [11], fearing the engagement of non-regional players in resolving this issue. At the same time, Teheran was not hiding its concerns about the military contacts between Azerbaijan and Turkey and about the cooperation between Baku and Tel-Aviv.

The joint military exercises of Turkey and Azerbaijan in September 2021 on the Caspian Sea coast and in the water zone became a landmark story [12], to which Pakistan joined a bit later [13]. These maneuvers caused very sharp response of Teheran, which referred to the respective Article of the Convention and claimed these exercises being unlawful [14]. However, the problem is that Iran remains the only country not having ratified the respective document. That is why Azerbaijan cannot be considered as having violated the Convention provisions, because it comes into effect only after it is ratified by all the participants of «the Caspian five».

Between two stools

The key problem of Iran’s approach to the Caspian Convention is the ambiguous attitude of Iranian society and politicians to its various provisions. In fact, the main reason for Teheran to sign the Convention was the fact that it served the interests of the Islamic Republic of Iran in the sphere of security. In addition, there was a threat that in case Teheran protracts the adoption of the Convention, the other stakeholders would start to resolve the Caspian Sea problems without Iran within their mutual agreements.

At the same time, the proposed options for the Caspian Sea division do not suit Iran. Moreover, the public opinion to a great extent is inclined to believe that the Convention and its potential implications are nothing but the betrayal of the national interests.

The public opinion factor aggravated over the recent time [15]. Protest sentiment in Iran remain a serious problem due to complicated economic situation. Besides, the situation is heated by the internal political struggle between the conservative figures and the reform figures. The conservative groups criticized Rouhani and his team many times for their rapprochement with the West. Now, after losing power, the reform figures call into question the Raisi’s approach to rapprochement with China and Russia.

The indicative example of the complicated situation is in local protests of the Iranians [16] against execution of the 25-year strategic partnership agreement between Iran and China. At the same time, given the current realities, cooperation with China practically has no alternative for the Iranian economy.

Hence, in the current situation, the Iranian authorities are unlikely to ratify the agreement fearing the negative reaction of the public. Teheran will continue the appeals to the parties to abide by the Convention provisions on security. However, from the formal point of view, it is Iran, who hampers the Convention on the legal status of the Caspian Sea from coming into legal force and effect.