Features | Security | Central Asia

Arms Race on the Caspian?

Nations around the Caspian Sea are boosting their navies. With Russia and the West involved as well, it’s getting complicated.

Joshua Kucera
Arms Race on the Caspian?
Credit: Gilad Rom

The Caspian Sea, an oil-rich body of water on the border of Iran and the former Soviet Union, has seen an unprecedented amount of naval activity this year: Iran has launched its largest ship yet into the Caspian, Kazakhstan has declared plans to start construction of six new ships by the end of the year and Turkmenistan announced the creation of its first navy. This military build-up, though so far still modest in scope, has observers wondering if the stage is being set for an arms race on this heretofore quiet sea.

The stakes in the Caspian Sea are high: According to the US Department of Energy, the Caspian region contains about ten percent of the world’s potential oil reserves, as well as still precisely unknown—but vast—natural gas deposits. The newly-independent countries that surround the sea have staked their futures on petroleum riches, and they’re trying to use the first revenues to protect that future. A Russian defence magazine recently described the emerging situation as ‘a keg of gunpowder in a sea of black gold.’

Government and military leaders of the five countries surrounding the Caspian—Russia, Iran, Azerbaijan, Turkmenistan and Kazakhstan—often use rhetoric about ‘demilitarizing’ of the sea. The president of Kazakhstan, Nursultan Nazarbayev, has said, ‘demilitarization of the Caspian is the most favourable option.’ And in 2007, the commander of Iran’s navy said: ‘We view the Caspian as a sea of peace and friendship and we believe upgrading and expanding military equipment in this sea is incorrect.’

But actions haven’t matched words. In April, Iran announced that it had launched a Jamaran-class ship (Iran calls it a destroyer, but by international standards it’s a smaller corvette) in the Caspian. With a displacement of about 1,400 tonnes, the Jamaran is the largest ship in its 90-something Caspian fleet, and is designed to host an armed helicopter. Iran is also planning to build 75 smaller missile boats of the Peykaap II class, which though they will likely be largely based in the Persian Gulf, Russian analysts believe could be transported by land to the Caspian if necessary. And at the end of August Iran announced that it will start mass production of a new missile boat, the Seraj, which will be deployed in the Caspian.

Kazakhstan, meanwhile, now maintains only a coast guard, but has said it’s planning to commission its first six naval ships this year, three patrol boats and three corvettes. The commander of Kazakhstan’s navy has said the ships will be equipped with Exocet ship-to-ship missiles, but has also said the navy was not oriented towards fighting other navies and is instead aimed at defending Kazakhstan’s oil and natural gas infrastructure from terrorists, a claim that has been received sceptically. Kazakhstan also is currently building a naval base at Aktau, and is building up its manpower by training cadets abroad—mainly in Russia and Turkey, but also in smaller numbers in the United States, Germany, India, Pakistan and South Korea.

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Turkmenistan, too, has announced that it will construct a navy by 2015 and wants to buy two or more larger warships, possibly corvettes, as well. President Gurbanguly Berdimukhamedovrecently announced that the country will be establishing a naval academy and a naval base for the purpose of ‘reliable protection of the sea border and for effective struggle against smugglers, terrorists and other criminal elements.’

Azerbaijan’s military modernization is more oriented towards taking back its lost territory of Nagorno Karabakh from its neighbour Armenia, which is landlocked. So although Azerbaijan’s defence budget has ballooned in recent years, relatively little of that modernization has benefited the navy. Azerbaijani President Ilham Aliyev, though, has said the country intends to contract with foreign investors to build a shipyard in Baku, suggesting that naval upgrades are on the way.

Meanwhile, the Russian Caspian Flotilla, which has been the dominant naval force in the sea, is inexorably declining and contains only two ships that can be called modern—a frigate and a missile boat. Russia has said it plans to add more frigates and corvettes to the Caspian Flotilla, but the Russian navy is stretched thin and priority is often given to other naval commands. All the other ships in the Caspian fleet are barely functional and will require replacement. Azerbaijan and Kazakhstan have shared in the command of the fleet, based in Astrakhan on the northern shore of the Caspian. But their respective development plans suggest they don’t hope to depend on Russia forever.

While all of the countries, of course, claim that their navies are for defensive purposes only (and like to invoke terrorism as a pretext for the build-up), many observers say that Iran is causing genuine concern. As far back as 2001, an Iranian naval vessel threatened a BP research ship, prospecting for oil, which Tehran said had strayed out of Azerbaijan’s waters, an episode that still looms large in the minds of naval planners around the Caspian.

‘You don’t need a corvette to protect an oil rig,’ one naval company official trying to do business with Caspian navies said on condition of anonymity. ‘Kazakhstan, Azerbaijan and Turkmenistan have good relations. But it’s Iran that everyone is worried about.’

Complicating matters is the fact that there’s no legal definition of the international borders of the Caspian. Until the collapse of the Soviet Union in 1991, only the Soviets and Iran bordered the sea. But the creation of four new countries on the Caspian raised the question of how to redefine its international boundaries, and the countries still haven’t managed to resolve whether to delineate the sea so that each country gets an equal amount or a portion based on the length of each country’s shoreline.

In addition, there’s no obvious mechanism for the five Caspian littoral countries to resolve disputes. For example, the Russia-dominated Collective Security Treaty Organization, which Russia uses to manage its military relations with many of the ex-Soviet states, excludes Azerbaijan and Turkmenistan (as well as Iran).


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Raising the stakes further is the fact that the Caspian is one of the primary sites of geopolitical competition between Russia and the West. Russia controls most of the oil and natural gas export infrastructure from the sea, but the US and European governments and oil companies are trying to break that monopoly. Westerners have succeeded in building pipelines for oil and gas from Azerbaijan, on the western coast of the Caspian, to Europe, and are now trying to connect those pipelines to Kazakhstan and Turkmenistan on the eastern shore.

The United States also has tried to make its mark in the region by helping the newly-independent countries build up their navies. A 7-year, $100 million programme called Caspian Guard carried out over the past decade aimed to coordinate the maritime security capacities of Azerbaijan and Kazakhstan. While the programme failed to accomplish that goal, the United States has helped Azerbaijan establish maritime radars, a command-and-control centre in the capital of Baku, and trained Azerbaijani Special Forces sailors to protect oil installations. The United States also has provided patrol boats to Azerbaijan, Kazakhstan and Turkmenistan, and continues to advise Kazakhstan on how to build its navy.

Russia maintains significant influence over its former colonies’ navies, as well. Most of Azerbaijan’s, Turkmenistan’s and Kazakhstan’s naval equipment was inherited from the Soviet navy, and Russia still maintains close ties to the newly independent countries’ navies. Russian shipbuilding companies appear to be in the lead to win the contracts for Kazakhstan’s new corvettes and patrol boats. It has held counter-terror maritime exercises (including Russian, Kazakhstani, Belorussian and Ukrainian forces) on the coast of Kazakhstan. And Russian officials are quick to criticize any US involvement in Caspian naval issues, clearly seeing the two countries as in a rivalry for influence. In 2006, Moscow proposed a sort of alternative Caspian Guard, CASFOR, which would coordinate Caspian security between all five littoral states. But like its American analogue, CASFOR appears not to have amounted to anything.

If anything will slow the naval arms race in the Caspian, it will probably be financial problems. All of the Caspian countries are hamstrung by the worldwide economic crisis, which has forced some austerity in defence budgets, rendering many of these countries plans worth little more than the paper they’re written on. Kazakhstan’s navy was supposed to be operational by 2010; naval officials now decline to predict when they’ll be ready. Construction of some ships for the Russian Caspian Fleet has been delayed; other ships originally intended for the Caspian have been instead diverted to the Baltic Sea.

But the economic crisis will not last forever, and the oil and gas revenues of Azerbaijan, Kazakhstan and Turkmenistan, in particular, will give those countries ample spending money to build up their navies. Only time will tell if a true Caspian Sea arms race develops.


Joshua Kucera blogs at The Bug Pit.