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Russia and Iran among five coastal nations forging landmark Caspian Sea deal

Five countries with shores on the world’s largest inland body of water sign legal convention to share its resources

PUBLISHED : Monday, 13 August, 2018, 5:01pm
UPDATED : Monday, 13 August, 2018, 9:43pm

Vladimir Putin and Hassan Rowhani met on Sunday after a dramatic few days in which both were threatened with punishing economic sanctions by the US.

But they were not meeting to agree a united response to this act of “economic warfare”, as Russia describes it. The Russian and Iranian presidents were in the small Kazakh coastal city of Aktau to sign a legal convention on the Caspian Sea.

After more than two decades of fraught diplomatic efforts, the five littoral Caspian nations – Russia, Iran, Kazakhstan, Azerbaijan and Turkmenistan – agreed a legal framework for sharing the world’s largest inland body of water, which bridges Asia and Europe and is packed with oil, gas and sturgeon. Diplomats describe the document as a regional constitution.

“Our summit is exceptional if not truly epoch-making,” Putin told a room of presidents and foreign ministers.

Rowhani was more circumspect: “We have taken a very important step but we should recognise there are more important issues that need to be addressed.”

On Sunday, the five nations agreed to 24km (15 miles) of sovereign waters in addition to a further 10 nautical miles of fishing area after which there will be common waters.

“What does this mean? Who knows,” one delegate said. “The lawyers will have to tell you.”

The Caspian Sea, which was once under complete Iranian control, is a very sensitive issue in Iran. It lost the northern part of the sea in a devastating defeat by Russia in the 1820s and the loss is still traumatic. Rowhani’s critics will paint any perceived concession at the summit as national betrayal.

But Rowhani isn’t well placed to quibble with his neighbours. Since US president Donald Trump issued his Twitter threat to unleash “the most biting sanctions ever imposed” on Iran with a promise that “anyone doing business with Iran will NOT be doing business with the United States”, Tehran has been scrambling to fill holes in its economy.

Its preference has long been to reach for trade and diplomatic partnerships in Europe but now the US has effectively cut this market off, Iran has been forced to turn to Russia, China and its regional allies to keep its economy afloat.

Asked if they feared sanctions on the two big regional players would undermine the Caspian’s trading potential, Aktau delegates responded with wait-and-see pragmatism.

“We will have to look into this issue but for us Iran is an opportunity. It’s a huge country and a huge market. We should not miss this opportunity of cooperating with them,” said a senior Kazakh diplomat. “Iran is our neighbour and our inevitable partner.”

Trump’s goal to reduce Iranian oil sales to zero by November is looking increasingly implausible. On Friday, Iran’s biggest oil customer, China, said it would keep doing business with Iran. Rowhani would have used his bilateral meeting with Putin on the sidelines of the summit to seek similar assurances.

A legally binding convention that prevents Caspian nations from opening their borders to third party aggressors – such as the US or Nato – or allowing any foreign military presence at all on Caspian waters is a triumph for Putin. For Rowhani, a strategic display of Russian support is more pressing.

“Rowhani needs to indicate to [the Iranian] public he’s doing everything he can to address their economic grievances and reassure the population it’s not isolated. That’s been the major talking point for the Iranian government in the past few weeks,” said political scientist Ariane Tabatabai. “The best possible outcome for the Iranians will be to walk away with something tangible to take back to Tehran that says we’re doing just fine with or without US sanctions.”