Who owns the Caspian?

Later this month, representatives from the five littoral countries of the Caspian Sea – Russia, Azerbaijan, Iran, Turkmenistan, and Kazakhstan – will meet in Moscow to discuss the ownership of the Caspian seabed.

Ownership of the seabed is a very contentious issue. An agreement would have serious implications for energy policy and geopolitics. An agreement would also pave the way for the construction of a trans-Caspian pipeline – something that Turkmenistan and Europe need, and something that Russia and Iran seek to avoid.

But do not get your hopes up.

More than 20 years since the break-up of the Soviet Union, the five Caspian coastline states have disagreed on how the energy resources under the seabed should be shared, developed and managed.

Even though each year brings new rhetoric on how an agreement will soon be reached, nothing has changed in the geopolitical situation in the region which leads one to assume that the upcoming meeting in Moscow will end the deadlock between the Caspian states.

A lake or sea?

When one looks at a map, they will see in the heart of Eurasia the largest inlet of water in the world: the Caspian Sea. But do not let this name fool you.

There is a serious debate as to whether the Caspian is legally a lake or a sea – and how this debate is resolved could have major geopolitical ramifications.

Also read: Russia’s Arctic adventures

In a nutshell, if the Caspian is considered to be a sea, then ownership of the seabed will be based on each country’s coastline. If the Caspian is considered to be a lake, then the seabed will be divided evenly between all littoral states. More crucially, under this scenario, all countries would have to agree before a pipeline is constructed across the Caspian.

As the country with the shortest Caspian coastline, Iran’s position is straightforward: They consider the Caspian to be a lake. To back up this claim, Tehran uses old treaties signed with the Soviet Union in 1921 and 1940. Yet, Iran’s reliance on these former treaties is curious since neither makes any reference to seabed ownership or its use.

The three former Soviet states – Azerbaijan, Turkmenistan, and Kazakhstan – consider the Caspian to be a sea and, therefore, claim the seabed should be divided based on the coastline. 

Russia is divided

Russia’s position on the Caspian seabed ownership is complicated. The Russian Ministry of Foreign Affairs considers the Caspian to be a lake, believing this is the best way to preserve Russia’s dominant geopolitical role in the region.

On the other hand, the fuel and power ministries and the oil and gas lobby consider the Caspian to be a sea, as this would create more opportunities for Russian companies to compete for more lucrative contracts.

At best, Moscow’s incoherent position has evolved into what is best described as “common waters, divided bottom”. With this policy, Russia is able to maintain surface navigational rights and, therefore, naval supremacy in the Caspian while taking a more pragmatic approach to oil and gas explorations below the waves. 

Also read: After the nuclear deal Iran eyes S Caucasus

There are an estimated 48 billion barrels of oil and 292 trillion cubic feet of natural gas in proven and probable reserves in the Caspian region. As technology improves, there will likely be even more resources discovered in the region.

Even with the “lake or sea” dispute, there has been modest progress among the Caspian countries on agreeing to certain sections of the seabed. For example, last year the Caspian states agreed that each country will have sovereignty over a distance of 15 nautical miles from their coastlines.

This agreement might work for now since most of the oil and gas is close to the coastline. But as new technology becomes affordable and available, new fields will be exploited further away from the shore. This is why an agreement delineating the ownership of the seabed is so important.

For Europe and Turkmenistan

Europe desperately needs new alternatives to Russian gas upon which it is heavily dependent. Turkmenistan, home to one of the world’s largest natural gas reserves, needs major export partners other than Russia and China.

Laying a natural gas pipeline across the Caspian Sea has been a dream of Turkmenistan and Europe, but this initiative is regularly blocked by Iran and Russia.

The outcome of the “lake or sea” debate will have a major impact on future pipelines bringing oil and gas from Central Asia into Europe.

Furthermore, until there is an agreement, the possibility for armed conflict in the region remains real. Already, the lack of clear delineation of the waters and seabed has led to multiple disputes over oil and gas ownership.

All Caspian countries are building bigger navies. In the past, Iranian and Turkmen naval vessels have harassed Azerbaijani oil and gas exploration operations. 

Even with so much at stake, do not expect very much to come out of the upcoming meeting in Moscow – other than flowery words in a press statement.

Luke Coffey is a research fellow specialising in transatlantic and Eurasian security at a Washington DC-based think-tank. He previously served as a special adviser to the British defence secretary and was a commissioned officer in the United States Army.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.