Why it is vital to settle the Caspian's sea-or-lake dispute

Transcript of video by Luke Coffey on the importance of the Caspian Sea to the region's security.

What is the draw of the Caspian Sea? Why is it so important geopolitically?

Luke Coffey:

Well, the Caspian Sea is at the heart of the Eurasian continent and anything that's at the heart of something is usually very important.

The region has sat at an important economic, military and geopolitical crossroads for centuries. The Caspian itself is the largest body of inland water in the world and it contains a lot of natural resources, oil and gas. And as technology continues to improve, more of this oil and gas will be made available. And there is an increase in markets from Europe and China and also Russia which will need this oil and gas.

Which countries are involved in disputes over it and who do you think will finally dominate?

Luke Coffey:

Well, Iran and Russia - both are the former imperial powers of the region so they both think that they have a natural right to be active and to have influence in the region.

But the other Caspian countries, Kazakhstan, Turkmenistan and Azerbaijan, are becoming regional actors in their own right. And then you have outside powers like Europe, China, Turkey which also have huge influence in the region.

Really, the main dispute is on the status of the Caspian itself - is it a lake or is it a sea? And there are different legal ramifications depending on what the outcome might be in terms of its status.

Right now, we see Russia wanting to have control over most of the Caspian based on old treaties dating back as far as 1920.

You have Iran wanting the Caspian divided up into five equal parts.

And then you have the other three Caspian countries wanting it based on coastlines. So, until this is resolved, the energy export potential of the region won’t be realised.

What is the knock on effect not only for the region but for the wider area in terms of defence and energy security?

Luke Coffey:

Right, well as technology improves and more oil and gas come online, they are going to find the oil and gas is going to find its way to new markets.

And if Europe is serious about finding an alternative to its dependence on Russian oil and gas then the Caspian will probably be one of the main areas of Europe’s focus because there is a lot of oil and gas beyond the Caspian in Central Asia that can’t get to European markets without first going through Russia because there is no pipeline going under the Caspian Sea.

And if this dispute between the Caspian countries can be resolved and a pipeline can finally be built then it will offer a new alternative to oil and gas for Europe.

But then you have China also getting involved in the region and slowly creeping westward in terms of its economic development and energy infrastructure construction and they too also want access to the oil and gas in this region.

So, you know, right now the region has huge potential to really alter some of the geopolitical dynamics that we see in the world today.

(Photo credit: dpa)

  • The Caspian Sea is the largest inland body of water on Earth.
  • Its wealth of natural resources include fish and hydrocarbons.
  • The Caspian is landlocked.
  • Its coast is shared by Azerbaijan, Iran, Kazakhstan, Turkmenistan and Russia.
  • Negotiations over the demarcation of the Caspian have been going on for nearly a decade.
  • The original two littoral states bordering the sea were Iran and Russia. Three more were added through their independence from the Soviet Union in 1991 - Azerbaijan, Kazakhstan, and Turkmenistan.
  • In 1921 and 1940, the Soviet Union and Iran signed bilateral agreements directing the use & development of the Caspian, but not the allocation of the sea’s resources or its boundaries.
  • After the dissolution of the Soviet Union, the presence of the three new states added complexity to Caspian governance.
  • Landlocked Caspian is unlike waters governed by the law of the sea which are open to navigation by all states. Yet, its size, salt water, and hydrocarbon-rich seabed also distinguish it from most lakes under international law.
  • More than 130 rivers flow in to the Caspian. It has no natural outflow.
  • The world's first offshore wells were made in Bibi-Heybat Bay, near Baku, Azerbaijan
  • The collapse of the USSR and opening of the region led to an investment and development scramble by international oil companies.
  • Controversy exists over the proposed Trans-Caspian oil and gas pipelines. These projects would allow Western markets easier access to Kazakh oil, and potentially Uzbek and Turkmen gas. The pipelines would bypass Russia.
  • The Caspian Sea is home to the world’s largest sturgeon population, a source of caviar.