Kris Roman
No Caspian nation has been more affected by the perfect storm of the global economic bust, Russian-Ukrainian gas disputes and the Georgian-Russian conflict than Azerbaijan. In 2009 Baku will attempt to juggle multiple concerns, from raising exports amid falling prices to remaining on good terms both with Western consumers and its giant northern Caspian neighbor Russia.
Its partner may be none other than Iran.
In the past six months three seismic events have impacted the export of Caspian hydrocarbons — Russia’s five-day conflict with Georgia, the subsequent global economic slowdown and the precipitous drop in energy prices, and last month’s Russian-Ukrainian gas dispute.
For better or worse, Azerbaijan has emerged as ground zero in the covert new Great Game energy war between the West and Russia for domination of both Caspian energy and its transit resources. Caught between the two competing power blocs, last year Azerbaijan began to develop its own variant on Washington’s favorite mantra regarding Caspian exports: Happiness is multiple pipelines. In reality, Baku had little choice, and a policy was instituted during the Russian-Georgian clash that saw Azerbaijan branch beyond using Western routes to begin again shipping oil northward through Russia via the Baku-Novorossiysk pipeline and begin sending oil eastward to Iran. The policy was, in fact, an expedient policy born of necessity, as a mysterious explosion on the Turkish segment of the Baku-Tbilisi-Ceyhan pipeline two days before the outbreak of hostilities had shut down its favored Western export route via Georgia.
The leaders of Russia, Armenia and Azerbaijan agreed on Sunday to work together for improving the situation in the Caucasus and instructed their foreign ministers to intensify efforts to settle the Nagorny Karabakh conflict.