Saturday, August 30, 2008

Window on Eurasia: Will Iran Become the Route Out for Caspian Oil – And How Will That Transform the Geopolitics of the Region?

Paul Goble

Vienna, August 30 – The disruption of oil flows via Georgia during the recent violence has made that route significantly less attractive for Caspian oil exporting countries, with some concluding they have no choice but to go via Russia given Iran’s international isolation but at least a few thinking about using Iran to gain greater freedom of maneuver relative to Moscow.
If the governments of the region do decide to ship some or all of their oil via Iran, that would have three serious geopolitical consequences that may rival some of the already enormous geopolitical fallout from Russia’s decision to invade Georgia and to recognize Abkhazia and South Ossetia (www.nr2.ru/economy/193763.html).
First, given the enormous appetite for oil in the West and Pacific rim, such a shift in Caspian exports would likely put enormous pressure on Washington to soften its approach to Tehran, especially if the United States wants to support the effective independence of the post-Soviet states and thus has no desire to see the oil flow through the Russian Federation.
Second, Iran’s willingness to serve as the route out for Caspian basin oil (or as a market for some of it) would likely set it on a collision course with Moscow, which has made it very clear that it wants to control all oil coming out of the former Soviet space and which would view any change in Iran’s approach or Western hostility to Tehran as not in Russia’s interest.
And third, such a shift would almost certainly affect Turkey and its relations not only with the post-Soviet Turkic states but also with Russia. Ankara’s ties with the former would likely become less important given that oil would be flowing via Iran, and it ties with Moscow would likely strengthen by means of some kind of condominium in the Southern Caucasus.
Beyond doubt, many countries, including both the United States and Russia, albeit for very different reasons, will do what they can to prevent such a shift, but the changes in Georgia and in the international system after Georgia mean that the use of such a route with all the consequences it would entail is no longer as unthinkable as it was a month ago.
The Georgian government and many commentators have suggested that blocking the east-west flow of oil from the Caspian via Georgia, a route that bypasses Russia, was one of the most important reasons behind Moscow’s decision to introduce troops there, an argument both Moscow and other analysts have heatedly denied.
But however that may be, Natalya Kharitonova, a regional analyst at Moscow State University, argues that it is important to focus on “the concrete facts” including both the way in which Russia’s action made Georgia less attractive as a transit corridor and Iran potentially a much more interesting one (www.ia-centr.ru/expert/2067/).
Among the “facts” she lists are the following: “the use of the Baku-Tbilisi-Ceyhan and Baku-Supsa oil pipeline, of the Baku-Tbilisi-Erzurum gas pipeline and of a number of other transportation units as well as the cessation of rail deliveries of oil to the Georgian port of Batumi was stopped” because of the conflict.
That in turn, she notes, forced Baku not only to reduce the amount of oil it pumped but also “to search for alternative routes for the transportation of this resource. As a result, Azerbaijani oil has been flowing through the Baku-Novorossiysk pipeline. [And] Turkey intends to purchase additional gas from Russia and Iran to compensate.”
At the same time, the Moscow scholar says, “Iran for example has decided to build the Neka-Jask pipeline as a competitor to Baku-Tbilisi-Jeyhan.” Earlier this week, Iranian sources reported that Azerbaijan had begun exporting some of its oil exports via Iran, although some in Baku denied this (www.presstv.ir/detail.aspx?id=67534§ionid=351020103).
A commentary in the Baku newspaper “Echo” today, indicates that Azerbaijan hopes to develop the east-west pipelines in Georgia but points out that analysts there and in other regional oil-exporting countries are looking at the Iranian route in the hopes of avoiding the consequences of using the Russian one (www.echo-az.com/economica01.shtml, August 30).
Ilham Shaban, the president of the Baku Center of Oil Research, told the paper that “all Western oil companies would like to work in Iran” but can’t easily because of American opposition. But now “invoking the situation in Georgia, they are beginning to advise official Washington to review its relations with Iranian so as to allow them to begin work there.”
He and other experts noted that because of the events in Georgia, “Azerbaijan began to export its oil to international markets through Iran,” even as it sent some of its oil northward via Russia – an example of Badu’s “balanced” foreign policy. But Azerbaijan was not the only regional country to use Iran during this crisis: Turkmenistan and Kazakhstan did so as well.
And another Azerbaijani expert, Gubad Ibadoglu, the head of the Center for Economic Research, pointed to three other reasons the Caspian basin states are now likely to reconsider Iran as a route: First, it is common practice for exporters to want to have multiple pipelines rather than be at the mercy from disruptions of a single one.
Second, exporting oil through Iran to the Gulf is significantly less expensive than sending it through Georgia and Turkey or through Russia. And third – and this may be especially significant in the case of Azerbaijan – oil from the Caspian going via Iran could help meet the fuel needs of the northern part of that country, a section populated by ethnic Azerbaijanis.

Window on Eurasia Shorts for August 30 – Georgian Events

Some news items about events in and around Georgia during the last week which have attracted less attention than they deserve:

NOT ALL RUSSIAN ANALYSTS AGREE WITH PUTIN ON AMERICAN ELECTIONS. Russian Prime Minister Vladimir Putin’s suggestion that the Bush White House pushed Tbilisi to provoke Russia as part of an effort to boost the electoral chances of Republic candidate John McCain has received widespread coverage not only in the Russian media but in American outlets as well (www.mignews.ru/news/politic/cis/280808_171244_69112.html). But many
Russian analysts do not agree with him either on the existence of a White House plot or on what the outcome of the US election is likely to be (www.nr2.ru/policy/192867.html).

HAMAS WANTS TO HELP MOSCOW BUILD ‘A NEW WORLD ORDER.’ Hamas, which welcomed Moscow’s extension of diplomatic recognition to the two breakaway republics in Georgia, has announced that it is ready to help the Kremlin build “a new world order” directed against Israel and the United States (zavtra.ru/cgi//veil//data/zavtra/08/771/41.html). The Georgian foreign ministry on August 29 congratulated Moscow on its new alliance with this terrorist group. Meanwhile, however, Moscow’s effort to get other countries to follow its lead on Abkhazia and South Ossetia has fallen flat. Venezuela’s Ugo Chavez has expressed sympathy but neither Caracas nor Mensk has moved (grani.ru/Politics/Russia/m.140732.html). Given that Moscow routinely compares what it has done to the West’s support for Kosovo, it is perhaps worth noting that 46 countries have now recognized that Balkan republic (http://www.nm.md/daily/article/2008/08/29/0101.html/).

RUSSIAN NATIONALISTS STEP UP CAMPAIGN TO LINK JEWS TO GEORGIA. Russia’s extreme right continues its effort to blame Israel and the Jews for their support of Georgia against Russia, an effort that could lead those attacking “persons from the Caucasus” to attack Jews (www.za-nauku.ru//index.php?option=com_content&task=view&id=917&Itemid=36).

RUSSIAN JEWS IN ISRAEL URGE DIASPORA NOT TO BUY ANYTHING GEORGIAN. A group of Russian Jews living in Israel have urged their compatriots not to buy anything Georgian in order to demonstrate their support for South Ossetia and to weaken the regime in Tbilisi, a call that some Russian nationalists welcome (www.homeru.com/news/content/view/6059/174/).

RUSSIANS DEBATE THE IMPACT OF MOSCOW’S ACTIONS IN GEORGIA ON RUSSIA. A few Russian analysts argue that Moscow’s recognition of Abkhazia and South Ossetia will lead to demands for independence by at least some of the non-Russian republics within the Russian Federation (www.regnum.ru/news/1046955.html). But far more Russian analysts and officials insist that there is no danger of “a domino effect” inside their country (www.ia-centr.ru/expert/2119/).

WESTERN HUMAN RIGHTS GROUPS ACTIVE IN CAUCASUS DENOUNCED AS ‘BANDITS’ … Russian commentators have been stepping up their attacks on human rights groups either based in Western countries or funded from abroad over the last several weeks. A particularly blatant and vicious example called these groups “bandits” because of their work in the Caucasus region (www.fondsk.ru/article.php?id=1584).

… AS HUMAN RIGHTS WATCH RELEASES SATELLITE PHOTOS SHOWING ETHNIC CLEANSING SOUTH OSSETIA. Human Rights Watch, one of the groups Russian media have been attacking, has used satellite photography to show that Russian and South Ossetian forces have engaged in the ethnic cleansing of Georgian villages in that breakaway republic (abkhazeti.info/news/1220052197.php).

LIBERAL COMMENTATOR SAYS RUSSIA AS ‘A PIRATE STATE’ SHOULD HAVE A PIRATE FLAG… Valeriya Novodvorskaya, a liberal Russian commentator, says that as Moscow’s actions in Georgia have shown, Russia has become “a pirate state” and should be flying a pirate flag rather than a tricolor one intended to stress its links to the countries of Europe (grani.ru/Politics/Russia/p.140673.html).

… WHILE ONE RUSSIAN SAYS HE NO LONGER RECOGNIZES ‘SELF-PROCLAIMED’ RUSSIAN FEDERATION. One Russian at least is taking an even more radical step to protest Moscow’s actions in Georgia. He has posted online a declaration saying that “effective immediately” he no longer recognizes “the self-proclaimed Russian Federation” as a state or himself as its citizen (yun.complife.ru/miscell/norussia.htm).

MOSCOW OFFICIALS SAY U.S. ‘REVIEWING CANDIDATES’ TO REPLACE SAAKASHVILI. In a transparent effort to sow discord in Tbilisi and to raise new questions in Europe about the Georgian government, Russian officials and commentators are suggesting that Georgian opposition figures are now travelling to Washington or meeting with American officials elsewhere as part of a supposed vetting process in which the United States will choose who will succeed Mihkiel Saakashvili (http://www.nr2.ru/inworld/192936.html).

RUSSIA’S MUSLIMS BACK MOSCOW ON RECOGNIZING ABKHAZIA, SOUTH OSSETIA. Russia’s Muslim establishment – including the Union of Muftis of Russia (SMR), the Central Muslim Spiritual Directorate (MSD), and almost all other MSD heads – have backed Moscow’s moves in Georgia and called on Muslim countries to follow Russia’s lead and extend diplomatic recognition to Abkhazia and South Ossetia (www.islam.ru/rus/2008-08-25/#22385 and www.islam.ru/rus/2008-08-28/#22458).

CRITICISM OF QUALITY OF RUSSIAN MILITARY ACTION IN GEORGIA INTENSIFIES. As more information comes out about Russian military actions in Georgia, an increasing number of Russian analysts are suggesting that Russian forces were not only poorly equipped but did not perform all that well in Georgia, winning as Soviet forces typically did only by their overwhelming numbers (www.polit.ru/analytics/2008/08/27/vol.html). And several have openly complained that this is an especially unfortunate situation because Russia has been spending more on defense but appears from the events in the Caucasus to be getting less for it (http://www.newizv.ru/news/2008-08-27/96780/).

Window on Eurasia Shorts for August 30 – Non-Georgian Items

Below are a few news items from the last week about developments in the post-Soviet space that have been overshadowed by the Georgian events but that merit attention.

MUSLIMS WIN 10 OF RUSSIA’S 23 GOLD MEDALS AT BEIJING GAMES. Muslims in the Russian Federation have been celebrating that their co-religionists won ten of the 23 gold medals the Russian team brought back from Beijing (www.islamnews.ru/news-13973.html). The percentage of Muslim winners is roughly twice the share of Muslims in the Russian population, something many Muslims see as a harbinger of the future. Especially pleased by this outcome were the Circassians, whose athlete won five of the ten medals Russia’s Muslims did (www.ingushetiya.ru/news/15342.html). The Russian umma is also well-represented on Russia’s Para-Olympic team: 20 of the members of that group which is headed to Beijing this week reportedly are Muslims and prayed at a mosque before departing for the Chinese capital (www.islamrf.ru/news/russia/rusnews/4282/).

IF MOSCOW RAISES PENSION AGE, FEW RUSSIAN MEN WILL LIVE TO COLLECT. The Russian government’s plan to raise the age at which Russians can retire will mean that many Russian men will never live to collect a pension. At present, the average life expectancy for men in the Russian Federation is under 58 and falling, a figure four to seven years younger than the new proposed retirement ages (www.flb.ru/info/44419.html).

NEW MUSLIM UNIVERISTY GRADS SWEAR TO FIGHT WAHHABISM. The pro-Kremlin Central Muslim Spiritual Directorate (MSD) of Mufti Talgat Tajuddin required all 58 graduates of the Russian Islamic University to swear that they would never depart from the principles of the Hanafi rite of Sunni Islam and that they would always struggle against “Wahhabism and religious extremism in all its manifestations” (www.islamrt.ru/htm/news/news.htm#384).

ORTHODOX MONK PREDICTS CHINESE WILL OCCUPY YEKATERINBURG IN NOVEMBER, URGES RUSSIANS TO FLEE. An especially inflammatory example of religious commentary in the Russian Federation today is a prediction by the head of the Russian Orthodox monastery in Alatyr in Udmurtia that the Chinese are about to “seize” Yekaterinburg and that Russians should prepare to flee (www.portal-credo.ru/site/?act=monitor&id=12695). His prediction and prescription for which there is no evidence has been making the rounds of Orthodox and Russian nationalist web sites and has even appeared in Moscow’s “Izvestiya” newspaper.

TATARSTAN INCREASES STATUS, RESPONSIBILITIES OF OFFICIALS WORKING WITH RELIGIOUS GROUPS. Tatarstan President Mintimir Shaimiyev has transformed his republic’s Council on Religious Affairs into an Administration for Religious Affairs, thus elevating its powers within the government. Shaimiyev did not change the leadership of this body, but its officials say that they will now focus on evaluating religious literature and academic programs for extremism (www.islamrf.ru/news/russia/rusnews/4224/). Two things make this action important: On the one hand, it will put additional pressure on Moscow to form a Council on Religious Affairs, something Muslims want but that the Orthodox Church opposes. And on the other, it will centralize in Tatarstan at least expertise on “extremism,” thus potentially limiting the power of prosecutors and judges to rely on whomever they want to reach their verdicts in such cases.

RUSSIANS CAN’T GET OFFICIAL DATA THEY’RE ENTITLED TO -- BUT CAN BUY THAT TO WHICH THEY AREN’T. According to an article in “Novyye izvestiya,” Russians are facing ever greater obstacles in obtaining government information that the law says they are entitled to. But at the same time, the paper reports, many officials are quite prepared to give them information the law says they are not supposed to have if they pay the necessary bribes (www.newizv.ru/news/2008-08-26/96698/).

FINNISH WRITER SAYS ESTONIA WILL ‘DISAPPEAR’ WITHIN TEN YEARS. A new book by a Finnish writer says that Estonia, which now has only 1.3 million people, will “disappear” in ten years or perhaps sooner, an argument that has been taken up by the Russian-language press there and one that could contribute to a deterioration of ethnic relations there (www.dzd.ee/?SID=2e72e885dfe61fc1059dc1c3887a0a1d&n=17&a=2790).

ETHNIC CONFLICTS ESPECIALLY LIKELY IN SMALL CITIES AND TOWNS, DPNI SAYS. The openly xenophobic Movement Against Illegal Immigration (DPNI) has published a survey of interethnic violence across the Russian Federation and says that serious ethnic conflicts occur far more often in Russia’s smaller cities and towns than they do in the larger cities, something that means that many human rights groups may be underreporting the number of such clashes because they do not have people on the scene outside of Moscow, St. Petersburg, and other large urban areas (www.dpni.org/articles/kommentari/9805/)

REGION IN KARELIA SEEKS TO BE RECLASSIFIED AS ‘NATIONAL’ ONE. Residents of Pryzhinskiy rayon near Petrazavodsk have asked that their district be reclassified as a “national” one, an action that challenges Vladimir Putin’s ongoing drive to eliminate most ethnic autonomies and one that suggests ethnic groups in hitherto non-ethnic areas may follow suit (finnougoria.ru/news/index.php?ELEMENT_ID=7136). It is as yet unclear with the Karelian government will go along. According to the 2002 census, 37 percent of the district’s 18,224 residents were Karelians, 46 percent were Russians, six percent Finns, and 11 percent others.

PUSH FOR MOSCOW MEMORIAL FOR NADEZHDA MANDELSTAM CONTINUES. For some years, the admirers of the great Russian memoirist Nadezhda Mandelstam have sought to erect suitable memorials to her in Moscow and other Russian cities, but they have faced obstacles from officialdom. An article posted at www.polit.ru/dossie/2008/08/25/chron.html. Meanwhile, opposition leader Gari Kasparov says that a monument to murdered journalist Anna Politkovskaya will be raised only after the fall of the current “bloody” Russian regime (http://www.sobkorr.ru/news/48B930B7C7DAD.html).

EUROPEAN STUDY OF EAST-WEST SPLIT DIVIDES WORLD INTO RED STATES BLUE STATES. A West European study of the ways in which countries have changed sides since the end of the Cold War includes maps which, extrapolating recent American practice, identify countries as “red states” or “blue states” (www.nr2.ru/pmr/192810.html). Those backing Moscow are shown in red, and there are a lot fewer of the red states today than 20 years ago.