The United States Army War College

U.S. ARMY WAR COLLEGE

CENTER for

STRATEGIC

LEADERSHIP and

DEVELOPMENT

The United States Army War College educates and develops leaders for service 

at the strategic level while advancing knowledge in the global application 

of Landpower.

The purpose of the United States Army War College is to produce graduates 

who are skilled critical thinkers and complex problem solvers. Concurrently, 

it is our duty to the U.S. Army to also act as a “think factory” for commanders 

and civilian leaders at the strategic level worldwide and routinely engage 

in discourse and debate concerning the role of ground forces in achieving 

national security objectives.

The Strategic Studies Institute publishes national 

security and strategic research and analysis to influence 

policy debate and bridge the gap between military 

and academia.

The Center for Strategic Leadership and Development 

contributes to the education of world class senior 

leaders, develops expert knowledge, and provides 

solutions to strategic Army issues affecting the national 

security community.

The Peacekeeping and Stability Operations Institute 

provides subject matter expertise, technical review, 

and writing expertise to agencies that develop stability 

operations concepts and doctrines.

The Senior Leader Development and Resiliency program 

supports the United States Army War College’s lines of 

effort to educate strategic leaders and provide well-being 

education and support by developing self-awareness 

through leader feedback and leader resiliency.

The School of Strategic Landpower develops strategic 

leaders by providing a strong foundation of wisdom 

grounded in mastery of the profession of arms, and 

by serving as a crucible for educating future leaders in 

the analysis, evaluation, and refinement of professional 

expertise in war, strategy, operations, national security, 

resource management, and responsible command.

The U.S. Army Heritage and Education Center acquires, 

conserves, and exhibits historical materials for use 

to support the U.S. Army, educate an international 

audience, and honor Soldiers—past and present.

U.S. Army War College

Senior Leader Development and Resiliency

SLDR
STRATEGIC

STUDIES

INSTITUTE

The Strategic Studies Institute (SSI) is part of the U.S. Army War 

College and is the strategic-level study agent for issues related 

to national security and military strategy with emphasis on 

geostrategic analysis.

The mission of SSI is to use independent analysis to conduct 

strategic studies that develop policy recommendations on:

• Strategy, planning, and policy for joint and combined 

 employment of military forces;

• Regional strategic appraisals;

• The nature of land warfare;

• Matters affecting the Army’s future;

• The concepts, philosophy, and theory of strategy; and,

• Other issues of importance to the leadership of the Army.

Studies produced by civilian and military analysts concern 

topics having strategic implications for the Army, the Department of 

Defense, and the larger national security community.

In addition to its studies, SSI publishes special reports on topics 

of special or immediate interest. These include edited proceedings 

of conferences and topically oriented roundtables, expanded trip 

reports, and quick-reaction responses to senior Army leaders.

The Institute provides a valuable analytical capability within the 

Army to address strategic and other issues in support of Army 

participation in national security policy formulation.

i

iii

Strategic Studies Institute

and

U.S. Army War College Press

RUSSIA AND THE CASPIAN SEA:

PROJECTING POWER OR COMPETING 

FOR INFLUENCE?

Tracey German

August 2014

The views expressed in this report are those of the author and 

do not necessarily reflect the official policy or position of the 

Department of the Army, the Department of Defense, or the U.S. 

Government. Authors of Strategic Studies Institute (SSI) and 

U.S. Army War College (USAWC) Press publications enjoy full 

academic freedom, provided they do not disclose classified 

information, jeopardize operations security, or misrepresent 

official U.S. policy. Such academic freedom empowers them to 

offer new and sometimes controversial perspectives in the interest of furthering debate on key issues. This report is cleared for 

public release; distribution is unlimited.

*****

This publication is subject to Title 17, United States Code, 

Sections 101 and 105. It is in the public domain and may not be 

copyrighted.
iv

*****

Comments pertaining to this report are invited and should 

be forwarded to: Director, Strategic Studies Institute and U.S. 

Army War College Press, U.S. Army War College, 47 Ashburn 

Drive, Carlisle, PA 17013-5010. 

*****

This manuscript was funded by the U.S. Army War 

College External Research Associates Program. Information on 

this program is available on our website, www.StrategicStudies

Institute.army.mil, at the Opportunities tab.

*****

All Strategic Studies Institute (SSI) and U.S. Army War 

College (USAWC) Press publications may be downloaded free 

of charge from the SSI website. Hard copies of this report may 

also be obtained free of charge while supplies last by placing 

an order on the SSI website. SSI publications may be quoted 

or reprinted in part or in full with permission and appropriate 

credit given to the U.S. Army Strategic Studies Institute and U.S. 

Army War College Press, U.S. Army War College, Carlisle, PA. 

Contact SSI by visiting our website at the following address: 

www.StrategicStudiesInstitute.army.mil.

*****

The Strategic Studies Institute and U.S. Army War 

College Press publishes a monthly email newsletter to update 

the national security community on the research of our analysts,

recent and forthcoming publications, and upcoming conferences sponsored by the Institute. Each newsletter also provides 

a strategic commentary by one of our research analysts. If you 

are interested in receiving this newsletter, please subscribe on the 

SSI website at www.StrategicStudiesInstitute.army.mil/newsletter.

ISBN 1-58487-640-9
v

FOREWORD

In November 2012, Russia’s Caspian Flotilla celebrated its 290th anniversary. Established by Peter the 

Great in 1722, the Flotilla was a key component of the 

Russian Empire’s expansion into the Caspian region, 

and nearly 300 years later, it remains a vital element of 

continued Russian influence in its “south.” The Caspian Sea and the “south” have been fundamental to 

Russian security since the 18th century, when imperial Russia needed to secure and maintain trade links 

with the Persian Empire, as well as prevent any further Persian encroachment. Growing rivalry between 

Russia and its imperial competitors in the Caucasus 

and Central Asia in the 18th and 19th centuries led 

to frequent military clashes in the Caspian Sea, giving the Caspian Flotilla renewed military significance. 

The drivers of international interest in the Caspian Sea 

have changed little since the 18th century, and historical events have resonance with the contemporary situation: the competition for influence between different 

regional powers; the region’s geostrategic significance, with Iran lying directly to the south; the vital 

importance of economic factors; maintaining access 

to natural resources, as well as lucrative trade routes; 

and the influence of external actors on the development of the region. 

Moscow’s concerns in the Caspian region reflect 

wider concerns about growing U.S. (and European) 

influence in areas traditionally perceived as Russia’s “strategic backyard,” in states such as Georgia, 

Ukraine, and the Central Asian republics—concern 

that is reflected in key Russian strategic documents, 

including the 2008 Foreign Policy Concept, 2009 National Security Strategy, and 2010 Military Doctrine. Rus-
vi

sian political discourse focuses on the former Soviet 

space as a sphere of its exclusive influence, or, as Russian President Dmitry Medvedev has put it, Russia’s 

“zone of privileged interest,” and Moscow has sought 

to counterbalance the growing involvement of other 

actors in the region. Russian policies vis-à-vis former 

Soviet states in Central Asia, the South Caucasus, and 

its Western periphery (Ukraine, Moldova, and Belarus) in the contemporary era are focused on maintaining influence and protecting Russia’s interests. The 

“influence” narrative reflects Russia’s desire to reassert itself across the former Soviet space in order to 

counter the perceived expansion of Western involvement, particularly North Atlantic Treaty Organization 

enlargement, within its “sphere of influence.” Events 

in Ukraine in 2014 (and Georgia in 2008) emphasize 

the crucial importance of having a clear understanding of how Russia views the growing influence of external actors within its “zone of privileged interest” 

and the impact on its relations with states in what is 

considered to be its “near abroad.”

 

 DOUGLAS C. LOVELACE, JR.

 Director

 Strategic Studies Institute and

 U.S. Army War College Press
vii

ABOUT THE AUTHOR

TRACEY GERMAN is a senior lecturer in the Defence 

Studies Department at King’s College London, United Kingdom (UK), which provides postgraduate-level teaching at the UK’s Joint Services Command and 

Staff College (JSCSC). Her research focuses on Russia’s relations with its neighbors, military reform, 

energy issues, as well as conflict and security in the 

Caucasus and Caspian region. Dr. German has published widely on intra- and interstate conflicts in the 

region, notably Nagorno-Karabakh, Chechnya, South 

Ossetia, and Abkhazia. Publications include Regional Cooperation in the South Caucasus: Good Neighbours 

or Distant Relatives? (Ashgate Publishing Ltd., 2012), 

Russia’s Chechen War (Routledge, 2003), and coauthored Securing Europe: Western Interventions towards a New Security Community (IB Tauris, 2009), as 

well as articles in journals such as European Security, 

Europe-Asia Studies, Small Wars and Insurgencies, Central 

Asian Survey, Vestnik analitiki, and Politique étrangère.

ix

SUMMARY

This monograph examines Russia’s policy toward 

the Caspian Sea region as Moscow attempts to counterbalance growing American involvement within 

what it perceives to be its zone of privileged interest, 

focusing on the recent expansion of the Caspian Flotilla and the rationale behind it. Moscow has sought 

to counterbalance the growing involvement of other 

actors in the region, which has led to rising tension 

between Russia and its southern neighbors. The primary objectives of the research are to examine Russian perceptions of threat and security in the Caspian 

region and assess the implications for other actors. 

This monograph analyzes the drivers of the increasing 

competition for influence, focusing on developments 

within the energy sector, and assess the implications 

of Russia’s consolidation of its dominance for security and stability in the region. This issue is important 

because a clear understanding of Russian strategic 

thinking and threat perception in the Caspian Sea is 

vital in order to facilitate effective U.S. policy in the 

wider Caucasus and Central Asian region.

1

RUSSIA AND THE CASPIAN SEA: 

PROJECTING POWER OR COMPETING 

FOR INFLUENCE?

In November 2012, Russia’s Caspian Flotilla celebrated its 290th anniversary. Established by Peter 

the Great in 1722, the Flotilla was a key component 

of the Russian Empire’s expansion into the Caspian 

region, and nearly 300 years later, it remains a vital 

element of continued Russian influence in its ”south.” 

The Russian Ministry of Defense (MOD) describes the 

Caspian Flotilla as “not only the southernmost outpost of Russia, but also the guarantor of the integrity 

of maritime boundaries and the most important foreign policy tool of the state in the Caspian Sea.”1

 The 

Flotilla has recovered from the collapse of the Union 

of Soviet Socialist Republics (USSR) in 1991 and its 

subsequent redeployment from Baku to Astrakhan. 

Unlike other Russian fleets, it has not been reduced in 

size, but has been the focus of significant investment 

in recent years. By 2020, the Caspian Flotilla will have 

received as many as 16 new vessels, a striking number 

for a relatively small, “closed” basin with no access to 

the open seas, where the littoral states control access 

in and out of the region. This raises questions about 

Russian perceptions of threat and security in the Caspian region: who and/or what does Russia perceive to 

be such a security challenge in the area that it needs to 

upgrade its naval capabilities so significantly?

The Caspian Sea is part of Russia’s “southern underbelly” (yuzhnaya podbryush”ye2

), a term that underscores the sense of vulnerability Russia feels along its 

southern border. Rich in resources, the broader Caspian region is also an area of ongoing border disputes, 

transnational threats, and growing international 
2

interest. The region’s geographic location confers both 

important advantages and a number of challenges: 

The development of international transport and communication corridors across the Sea are undoubtedly 

an advantage, although this is countered by the fact 

that Azerbaijan, Kazakhstan, and Turkmenistan are 

landlocked and reliant upon other countries to export 

their hydrocarbons to international markets. Furthermore, the key strategic location of the Caspian, linking Asia and Europe, and the lack of consensus among 

the five littoral states about the legal status of the Sea, 

facilitate the passage of security challenges such as international terrorism, illegal migration, transnational 

organized crime, and trafficking from Central Asia 

to Europe. 

Russia traditionally has been the biggest regional 

power and, despite the appearance of new actors 

within the region in the wake of the breakup of the 

USSR that challenged Russian hegemony, it remains 

the principal economic and military power in the 

Caspian region, largely a result of historical legacy. 

Moscow considers the region to be a sphere of its 

exclusive influence, or, as former Russian President 

Dmitry Medvedev has put it, Russia’s “zone of privileged interest,” and has sought to counterbalance the 

growing involvement of other actors. Thus, Russian 

policies vis-à-vis the Caspian region (and the wider 

former Soviet area) are focused on maintaining influence and protecting its political and economic interests in the region. Former Soviet states are generally 

wary of pursuing policies that run counter to Russian 

interests, limiting the ability of other actors, such as 

the United States, to increase their cooperation with 

these states. The region is unique in terms of Russia’s 

relations with its neighbors within the wider “south,” 
3

as it contains three former Soviet states, none of which 

is willing to remain wholly dependent on Moscow (as, 

for example, Armenia is), but which have also been 

unwilling to turn their backs on Russia (as Georgia 

has tried to do). Both Azerbaijan and Kazakhstan 

have sought to balance their relations with Russia 

against deepening cooperation with the West in order 

to maintain their independence, while Turkmenistan 

pursues a policy of “Positive Neutrality” in its foreign 

relations. The final littoral state, Iran, is an historic rival of Russia. It considers itself to be a regional power 

and has substantial historical, cultural, and ethnic 

links with neighboring states in the region, inherited 

from the Persian Empire, which complicate its foreign 

relations. Nevertheless, although it is a rival for influence, Iran also shares a common desire with Russia to 

counter the increasing presence of external powers in 

region, particularly the United States.

The rise in U.S. (and European) interests in the 

Caspian region over the past decade has led to rising 

tension between Russia and its southern neighbors. 

The United States views the Caspian as an important 

strategic arena: as well as its geostrategic location, 

with Iran lying directly to the south, it is a significant 

source of hydrocarbons. It has become increasingly 

important to the economic security of the West as 

international oil companies have spent vast sums of 

money on exploration and development there, particularly in Azerbaijan and Kazakhstan. However, 

limited export options, as well as reliance upon the 

Russian pipeline network and neighboring countries, have restricted the ability of countries in the 

Caspian to profit fully from their extensive oil and 

gas reserves. Consequently, there has been considerable investment in new international export pipelines 
4

over the past decade, undermining Russian influence. 

Some Russian observers have described the issue of 

pipelines in the landlocked Caspian region as a “battle 

for domination,” particularly on the part of the United 

States, which “is seeking to accelerate the process of 

the political and economic isolation of former Soviet 

republics from Russia.”3

 While this view ascribes little autonomy of action to the states involved, it does 

highlight the suspicion with which Moscow regards 

growing Western (particularly U.S.) influence in the 

Caspian region.4

The Caspian Sea has also been playing a vital role 

in the logistics operation to support the International 

Security Assistance Force (ISAF) in Afghanistan. It 

forms part of the southern route of the Northern Distribution Network (NDN), which was established in 

2009 to move troop supplies into Afghanistan, avoiding the hazardous route through Pakistan. By 2011, the 

NDN handled about 40 percent of Afghanistan-bound 

traffic, compared to 30 percent through Pakistan. The 

southern route starts at the Georgian Black Sea port 

of Poti, crossing the Caucasus to Baku in Azerbaijan, 

where goods are then ferried across the Caspian Sea to 

Kazakhstan and then moved by rail or truck through 

Uzbekistan to the Afghan border. This route carries 

approximately one-third of the NDN’s traffic. Kazakhstan has been seeking to develop its port of Aqtau on 

the Caspian Sea and turn it into a major regional transit hub. As the country’s only seaport and described 

as the “sea-gate to a sovereign Kazakhstan,”5

 Aqtau 

has played a key role in the ISAF logistics chain and 

is set to grow in importance as the United States and 

other ISAF contributors withdraw from Afghanistan 

in 2014. Reports in the Russian media suggested that 

the United States may establish a transhipment point 
5

at Aqtau, as a means of getting its military equipment 

out of Afghanistan and highlighted Russian opposition to the presence of any external actors in the closed 

system of the Caspian Sea. An article in Nezavisimaya 

Gazeta argued that, if Aqtau became a base for “the 

Pentagon and its allies,” the “already fragile Caspian 

security architecture would effectively collapse.”6

Moscow has tolerated limited U.S. military support 

for Azerbaijan and Kazakhstan in terms of training 

and equipment support through the Caspian Guard 

initiative. However, the prospect of the potential establishment of a transhipment base at Aqtau appears 

to be a step too far for Russia (and Iran) and could lead 

to growth in tension in the area. 

This monograph examines Russia’s policy toward 

the Caspian Sea region as Moscow attempts to counterbalance growing American involvement within 

what it perceives to be its zone of privileged interest, 

focusing on the recent expansion of the Caspian Flotilla and the rationale behind it. The primary objectives 

of the research are to analyze Russian perceptions of 

threat and security in the Caspian region and assess 

the implications for other actors. It will assess the importance of the “south” to Russian perceptions of security and analyze whether U.S./Western influence in 

the Caspian region is viewed as a security challenge 

by Moscow. What steps have been taken since 1991 

to develop any form of regional security system and 

what has been Russia’s role in this? The monograph 

focuses on developments within the energy sector and 

assesses the implications of Russia’s consolidation of 

its dominance for energy security and stability in the 

region. This issue is important because a clear understanding of Russian strategic thinking and threat perception in the Caspian Sea is vital in order to facilitate 
6

effective U.S. policy in the region and avoid a repeat 

of the events of 2008 in Georgia. 

THE CASPIAN SEA AND ITS SIGNIFICANCE 

According to some sources, over the centuries the 

Caspian Sea has been known by more than 50 different 

names.7

 At various times, the ancient Persians called 

it the Hyrcanian and Persian Sea, while old Russian 

documents refer to it as the Khvalin Sea, after the Khvali people that inhabited the area. Other names given 

to the Sea have included Avar, Baku, Apsheron, and 

Khazar. The name “Caspian” is thought to be derived 

from the name of an ancient tribe that lived on the 

southwest shore of the Sea, the Caspi people.8 Russian 

interest in the Caspian began in earnest during the 

17th century with the development of trade links with 

Persia, which led to an expansion of shipping routes 

along the Volga river and down across the Caspian 

Sea. The growing Russian empire needed the abundant natural resources found in and around the Sea, 

as well as the trade links between east and west and 

routes across the Caspian. This stimulated the need 

for the development of a Russian naval capability to 

protect its commercial interests in the region, and Tsar 

Alexis I ordered the construction of naval ships. The 

Oryel was the first Russian warship to be constructed; 

it set sail for Astrakhan in 1669, under the command 

of Dutch captain David Butler.9

During the 18th century Russia sought to dominate the area, leading to the development of its own 

Caspian naval flotilla. Established by Peter the Great 

in 1722, the flotilla was a key component of the Russian Empire’s expansion in the Caspian region. Russia 

was becoming increasingly concerned about growing 
7

rivalry with both the Ottoman and Persian Empires in 

the southwest Caspian and Caucasus.10 As the empire 

grew, it had come into conflict with the other imperial 

powers in the region, the Ottomans and Persians. The 

competition for territory and resources in the 18th and 

19th centuries led to frequent military clashes on the 

Caspian Sea, giving the Caspian Flotilla renewed military significance. Moscow was determined to maintain its lucrative trade routes and defend its allies in 

the region, a state of affairs that has resonance with 

the contemporary situation. 

There are significant similarities between historical 

events and contemporary circumstances in the region, 

and the drivers of international interest in the Caspian Sea have changed little since the 18th century: the 

competition for influence between different regional 

powers, the region’s geostrategic significance, with 

Iran lying directly to the south; the vital importance of 

economic factors and maintaining access to natural resources; as well as lucrative trade routes and concern 

about the influence of external actors on the development of the region. Over the past decade, the region 

has grown in further significance within the contemporary security environment, particularly its political, strategic, and economic importance for Western 

security. International oil companies have spent vast 

sums of money on exploration and development in 

the wider Caspian region, and the Sea has become an 

important transit route for the ISAF logistics operation. Rich in resources and lying on a key East-West 

transit route, the Caspian has attracted considerable 

international (particularly U.S.) interest over the past 

decade, triggering rising tension between Russia and 

its southern neighbors. Russia traditionally has been 

the biggest regional power, and its ties to the region 
8

remain strong. Moscow considers the broader Caspian region to be a sphere of its exclusive influence, 

and it is unhappy about the growing influence of other external actors such as the United States, Europe, 

Turkey, and Iran, which, since 1991, has posed a direct 

challenge to Russian hegemony in the region. 

The Caspian Sea is also where imperial Russia began to develop naval vessels for the purpose of defending its national and commercial interests during 

the 17th and 18th centuries, leading to the development of a navy. Russia’s current maritime doctrine, approved in 2001 and looking out to 2020, describes the 

navy as an “instrument of foreign policy . . . intended 

to protect the interests of the Russian Federation and 

its allies.”11 It goes on to describe Russia as “historically . . . a leading maritime power,” a consequence 

of the country’s “spatial and geophysical attributes,” 

and identifies the Caspian as a unique region in terms 

of the “volume and quantity” of its mineral and bioresources. This is reflected in the role of the Caspian 

Flotilla which, in addition to protecting Russian shipping, also provides protection to Russian offshore 

hydrocarbon production facilities against potential 

threats and monitors the extraction of hydrocarbons 

and bio-resources (such as sturgeon) in disputed areas 

of the Sea. The objectives of Russian maritime policy 

in the Caspian Sea region are:

• The establishment of a legal regime in the Caspian Sea that is favorable for Russia in terms 

of exploiting resources such as fish stocks and 

hydrocarbons;

• Protecting the marine environment in cooperation with the other littoral states;

• Creating the conditions for basing and utilization of all naval/maritime potential;
9

• Renewal of merchant, combined (river-sea) and 

fishing fleets;

• Preventing displacement of Russian fleet from 

maritime transport market;

• Organization of ferry services as part of “intermodal” transport network with access to the 

Mediterranean and Baltic Seas; and,

• Development, reconstruction, and specialization of existing ports.12

This monograph uses these maritime policy objectives, particularly the first three, as a framework 

to analyze the significance of the Caspian Sea region 

for Russia and further understand the motivations 

for the expansion and capability upgrade of the Caspian Flotilla. It begins with an appraisal of the Sea’s 

resources, both hydrocarbons and sturgeon, before 

examining cooperation and obstacles to cooperation 

between the littoral states, the importance of the Sea 

for Russian security, and the development of naval 

capabilities there.

CASPIAN RESOURCES

Oil and Gas Reserves.

The Caspian Sea was the site of the world’s first 

commercial oil industry, with the development of oil 

reserves in Azerbaijan (then part of the Russian Empire) at the end of the 19th century. Following the collapse of the Soviet Union in 1991, the Caspian region 

was heralded as the Middle East of the future because 

of its potential hydrocarbon reserves. However, the 

euphoria and optimism that accompanied the initial 

involvement of foreign investors in the region has 
10

been tempered by difficult operating conditions, both 

political and geological. Although the Caspian has 

been lauded as the new Middle East, current proven 

reserves indicate a greater similarity with the North 

Sea than with the Persian Gulf (see Table 1).

Table 1. Comparison of Proved Reserves 

in the Caspian and Middle East, 2012.13

The North and South Caspian Basins are very different. The North is comprised of shallow waters, which 

are ice-bound during the winter months, presenting 

a serious technical challenge for energy companies. 

It is also the location of sturgeon breeding grounds. 

The South is deeper, but is not thought to contain as 

much oil and is possibly more gas-prone. Exploratory 

drilling in the South Caspian Basin has significantly 

reduced estimates of future oil potential and foreign 

companies have begun to adopt a more moderate attitude toward the development of the Caspian’s hydrocarbon reserves. In terms of hydrocarbon resources, 

oil reserves are predominantly concentrated in Western Kazakhstan and the Caspian Sea, with large natural gas reserves found in Turkmenistan, Uzbekistan, 

and Kazakhstan. 

Proven Oil 

Reserves 

(Billion 

Barrels)

Share of 

Global 

Total 

Percent

Reserve-toProduction 

(R/P) Ratio

Proven Gas 

Reserves 

(Trillion 

Cubic 

Meters)

Share of 

Global 

Total 

Percent

R/P 

Ratio

Azerbaijan 7.0 0.4 21.9 0.9 0.5 57.1

Kazakhstan 30.0 1.8 47.4 1.3 0.7 65.6

Russia 87.2 5.2 22.4 32.9 17.6 55.6

Turkmenistan 0.6 - 7.4 17.5 9.3 -

Saudi Arabia 265.9 15.9 63 8.2 4.4 80.1

Iran 157 9.4 - 33.6 18.0 -
11

Kazakhstan, where oil was first discovered over 

100 years ago, has the largest recoverable reserves of 

oil in the Caspian Sea region. According to British Petroleum’s (BP) Statistical Review of World Energy, published in 2013, the country has proven oil reserves of 

30 billion barrels and was producing 1.7 million barrels per day (bpd) in 2012, making it a major producer. 

Kazakhstan’s proven natural gas reserves stood at 

1.3 Trillion cubic meters (Tcm) in 2012, the majority 

of which are located in the west of the country. According to the U.S. Energy Information Agency (EIA), 

around 80 percent of the country’s total natural gas 

reserves are found in just four fields: Karachaganak, 

Tengiz, Imashevskoye, and Kashagan.

Oil is located primarily in the west of the country, 

both on- and offshore. Current production is dominated by two giant onshore fields, Tengiz and Karachaganak, which together produced over 40 percent 

of the country’s total output in 2013.14 Tengiz is Kazakhstan’s largest field, with daily production of over 

500,000 bpd. It is operated by Tengizchevroil (TCO), 

a joint venture that includes major U.S. oil companies 

Chevron and ExxonMobil, together with KazMunaiGaz and LukArco.15 Karachaganak accounted for 

around 12 percent of the total oil production in 2013. 

Its operator, Karachaganak Petroleum Operating 

(KPO), includes BG, ENI, Chevron and LUKoil.16

It is estimated that two-thirds of future oil production will be from the North Caspian Basin, predominantly from the giant offshore Kashagan field being 

developed by the North Caspian Operating Company (NCOC) consortium, comprising KazMunaiGaz, 

Shell, ENI, ExxonMobil, Total, Inpex, and the China 

National Petroleum Corporation (CNPC). Kashagan is thought to be one of the largest known fields 
12

outside of the Middle East and has been described 

as the “world’s largest oil discovery in 5 decades.”17

It is hoped that it will provide a reliable indicator of 

the Caspian’s potential oil supply: exploratory drilling has indicated that the field holds up to 35 billion 

barrels of oil, of which approximately 25 percent (7-9 

billion barrels) can be produced. Production has been 

delayed several times, largely because of extreme operating conditions. The first production is expected in 

the spring of 2014, with production being increased 

from 180,000 bpd during the first phase to as much 

as 370,000 bpd in the second. Located in shallow waters that freeze in winter, damaging equipment and 

making maintenance difficult, the field also produces 

toxic hydrogen sulphide. A gas leak in October 2013 

led to a further halt in operations and raised concerns 

about potential environmental damage. The development of Kazakhstan’s “superfields” is key to the country’s long-term economic growth, and Kashagan in 

particular is vital for the country to achieve its goal of 

increasing crude oil output by 60 percent by the end 

of the decade. Kashagan is the only offshore “superfield” and therefore the only one currently with direct 

relevance to the Caspian Sea.

In September 2013, China’s CNPC acquired an 8.33 

percent stake in the Kashagan consortium for U.S.$5 

billion.18 The purchase was part of a series of deals 

signed by Chinese President Xi Jingping19 during a 

tour of Central Asia to secure access to the region’s 

hydrocarbons and was symbolic of the increasing 

Chinese presence in the region. The deal was also indicative of the competition for influence occurring in 

the region, particularly over access to hydrocarbons: 

CNPC beat its Indian rival Oil and Natural Gas Company (ONGC) to the stake, which was held by U.S. 
13

major oil company, ConocoPhillips, until July 2013. 

Kazakhstan’s extensive hydrocarbon reserves have 

stimulated a lot of international interest and increased 

the presence of external actors in the Caspian region, 

undermining Russian influence. While the country 

has so far managed to balance successfully its relations 

with Moscow, the West, and Beijing, their conflicting 

interests and notions of security could undermine 

stability in the medium to long term, and Kazakhstan will need to develop its naval forces to be able 

to demonstrate its intent to protect its interests in the 

Caspian Sea.

Azerbaijan’s sector of the Caspian Sea also contains 

significant hydrocarbon reserves, although there are 

indications that it may be more gas- than oil-prone. Recent exploration in the Azeri sector of the Caspian Sea 

has been disappointing, with the exception of the BPled Azeri-Chirag-Guneshli (ACG) superstructure, and 

several wells have been plugged. Azerbaijan’s proven 

crude oil reserves were estimated at 7 billion barrels 

in 2012 (see Table 1). The country’s largest hydrocarbon basins are located offshore, with the majority of 

its oil currently being produced from the ACG fields. 

The U.S.$8 billion deal, which established the BPled Azerbaijan International Operating Corporation 

to develop the Azeri, Chirag, and Guneshli offshore 

fields, was concluded in 1994. Dubbed the “contract 

of the century,” it was the Azeri government’s first international oil agreement with a consortium of global 

oil companies and marked Azerbaijan’s entrance onto 

the international energy market. The ACG concession 

is the largest international project in Azerbaijan and 

comprises three fields with total reserves estimated 

to be at least 5.4 billion barrels of recoverable oil.20

Azerbaijan’s total oil production was expected to 
14

peak by 2012, and recent data suggests that production has been declining over the past couple of years 

(see Table 2).

Table 2. Comparison of Oil and 

Gas Production in the

Caspian and Middle East, 2012.21

The ACG fields also produce a significant quantity 

of natural gas. In 2012, Azerbaijan’s natural gas reserves were estimated at 0.9 Tcm and, like its oil, most 

of Azerbaijan’s natural gas is produced from a few 

fields in the Caspian: ACG and Shah Deniz. Situated 

in the Caspian Sea around 60 miles southeast of Baku, 

the field’s operator BP claims that Shah Deniz is one of 

the world’s largest gas-condensate fields with over 1 

Tcm of gas. Stage One of the field’s development began 

operations in 2006, with an annual production capacity of 9 Billion cubic meters (Bcm).22 Shah Deniz is significant because it is the only major field development 

in the Caspian Sea focused primarily on natural gas, 

rather than oil, despite the fact that, as mentioned earlier, the region is likely to be more gas- than oil-prone. 

With the exception of Shah Deniz, foreign investment 

in Azerbaijan’s hydrocarbon sector (and across the 

Caspian) has centered on oil projects, which require 

Oil 

Production

(barrels per 

day)

Yearon-Year 

Change 

Percent

Share of 

Global 

Total 

Percent

Gas 

Production 

(Billion cubic 

meters)

Yearon-Year 

Change 

Percent

Share of 

Global 

Total 

Percent

Azerbaijan 872,000 -5.2 1.1 15.6 +5.1 0.5

Kazakhstan 1,728,000 -1.6 2.0 19.7 +2.0 0.6

Russia 10,643,000 +1.2 12.8 592.3 -2.7 17.6

Turkmenistan 222,000 +2.5 0.3 64.4 +7.8 1.9

Saudi Arabia 11,530,000 +3.7 13.3 102.8 +11.1 3.0

Iran 3,680,000 -16.2 4.2 160.5 +5.4 4.8
15

less capital expenditure than natural gas projects, and 

less investment in infrastructure to get them started. 

Oil is also a more tradeable commodity than natural 

gas, which generally requires supply agreements to be 

in place before production begins.

Turkmenistan possesses some of the world’s largest reserves of natural gas, as well as significant reserves of oil, although its ability to profit from these 

extensive hydrocarbon reserves has been restricted. In 

2012 it had proven gas reserves of 17.5 Tcm, over 9 

percent of total global reserves of natural gas, most of 

which is located onshore, in the east of the country; 

there is little in the Caspian Sea. While an independent audit of Turkmenistan’s South Yolotan-Osman 

field in 2008 revealed huge quantities of natural gas, 

suggesting that the field may be one of the five largest in the world, in 2009 the Turkmen president dismissed the heads of several key gas departments for 

“falsification” of the data on natural gas reserves.

23

According to BP’s Statistical Review of World Energy, 

in 2012 Turkmenistan had proven oil reserves of 0.6 

billion barrels, the majority of which are located in 

the South Caspian Basin and onshore in the west of 

the country.24 It also claims to have significant oil reserves in areas of the Caspian Sea that are subject to a 

dispute with Azerbaijan over ownership, notably the 

Serdar field (called Kyapaz by Azerbaijan), which lies 

on the maritime border between the two countries and 

has estimated recoverable reserves of 370-700 million 

barrels. Despite Turkmenistan seeking international 

arbitration to settle the boundary dispute, this issue, 

alongside Turkmenistan’s claims to portions of the 

Azeri and Chirag fields (called Khazar and Osman by 

Turkmenistan) being developed by Azerbaijan, are 

still unresolved.
16

Russian production of oil and gas in the Caspian is 

limited: although it is thought that Russia may have 

estimated hydrocarbon reserves of up to 32 billion barrels of oil equivalent in its sector of the Caspian Sea, 

exploration has been limited to date. Between 1999 

and 2005, the major Russian oil company, LUKoil, 

discovered six oil and gas fields in the northern sector of the Caspian, with total estimated reserves of 4.7 

billion barrels. In 2010, the company began developing the Yury Korchagin offshore field, which holds an 

estimated 270 million barrels of oil and over 63 Bcm of 

natural gas.25 It is important to note that the statistics 

in Table 1 for Russia include the whole of the country, 

not just its reserves in its sector of the Caspian Sea.

Potential hydrocarbon reserves in the Iranian sector of the Caspian remain largely unexplored, and 

there is no significant Iranian production in the Sea. 

According to the National Iranian Oil Company, the 

country’s Sardar Jangal field in the Caspian contains 

significant reserves worth over U.S.$50 billion.26 Iran 

announced at the end of 2011 that it had discovered the 

field, which it claims holds at least 1.4 Tcm of natural 

gas and as much as 100 million barrels of oil.27 Despite 

these optimistic announcements, Iranian exploration 

and production in the Caspian is very limited, largely 

because its national sector of the Sea is very deepwater 

and therefore difficult to explore with its current technologies. U.S. and European sanctions have restricted 

the involvement of international oil majors in the 

country and, consequently, Iran’s access to the most 

up-to-date production technologies. Furthermore, the 

Caspian Sea is not as important for Iran as it is for 

some of the other littoral states: Iran has reserves elsewhere that are much easier and cheaper to produce 

and transport to international markets. However, Iran 
17

is unlikely to commit to any common agreement on 

the Caspian Sea’s legal status (discussed later) until it 

has fully explored its national sector, and thus, it will 

continue to be a spoiler in the Caspian region, blocking any prospective collective settlement.

Pipelines.

Azerbaijan, Kazakhstan, and Turkmenistan have 

considerable hydrocarbon reserves and hope to become major players on the world energy market. However, even if they increase the production of hydrocarbons, they still face several enduring obstacles: the 

difficulty of transporting products from the remote, 

landlocked Caspian region to lucrative international 

markets, together with the unclarified legal status of 

the Sea. Export infrastructure from the Caspian Sea 

region is still insufficient, and the development of additional export capacity is vital for future production 

growth. Limited export options, as well as reliance 

upon the Russian pipeline network and neighboring 

countries, have so far served to restrict the ability of 

the Caspian littoral countries to profit from their extensive oil and gas reserves. During the Soviet era, the 

routing of pipeline infrastructure was not a prominent 

issue for oil-producing areas of the USSR—pipelines 

were constructed to serve the needs of the Union, and 

thus, republics such as Azerbaijan and Kazakhstan 

were part of the national network, which generally 

flowed towards western Russia and Moscow. However, independence meant that the question of how 

to get oil and gas out of a relatively isolated area to 

international markets rose progressively to the top of 

the agenda for producers in the Caspian region. Until a decade ago, countries in the region were reliant 
18

upon the Russian network of pipelines to reach European consumers, undermining their political and 

economic autonomy and giving Moscow substantial 

leverage. In 1997 Azeri President Heydar Aliyev announced that his country was “no longer prepared to 

be totally dependent upon Moscow” for the transit of 

its oil.28 Consequently, there has been considerable investment in new international export pipelines over 

the past decade, which has led to the development of a 

southern oil and gas corridor between the Caspian and 

Mediterranean Seas and brought significant economic 

and security benefits. Pipelines have a permanency 

and an impact on political relations that highlight the 

strategic significance of hydrocarbons in the contemporary era. The static network of pipelines currently 

supplying Europe reflects the geopolitical situation 

of the Cold War, while new links demonstrate the 

geopolitical shift.

The focus to date has been on oil export infrastructure, symbolized by the ambitious Baku-TbilisiCeyhan (BTC) project, a vital element in expanding oil 

production in the Caspian Basin.29 The BTC (and BTE/

South Caucasus [SCP] gas) pipeline has considerable 

symbolic significance, providing a direct link between 

the Caspian region and Europe. Its construction has 

significantly altered the balance of power in the region, 

strengthening the political and economic autonomy 

of states such as Azerbaijan and Georgia, reducing 

Russian influence and cementing the involvement of 

Western actors such as Europe and the United States. 

Nevertheless, producers on the eastern side of the 

Caspian, Kazakhstan and Turkmenistan still remain 

largely reliant on the Russian pipeline network to get 

their hydrocarbons to Western markets.30
19

Kazakhstan has been seeking to keep its options 

open in terms of export routes. The Kazakhstan-China 

pipeline, which shipped its first oil in 2009, is a symbol of Beijing’s strengthening ties with Central Asia 

(and China’s first international oil pipeline), although 

all pipeline routes that run out of Kazakhstan toward 

the West cross Russian territory. Most Kazakh oil is 

exported via the Russian (and Chinese) pipeline network, including being shipped across the Caspian to 

terminals at Makhachkala and Taman and then on to 

the Russian Black Sea port of Novorossiisyk. Kazakhstan had been exporting Kazakh oil to international 

markets through the BTC, following a bilateral agreement with Azerbaijan in 2006. From 2008 to 2010, Kazakh oil transit via the BTC pipeline totaled 2.2 million tons, although Kazakhstan then switched to other 

export routes after disagreement over the conditions 

of shipment. It was reported at the end of 2013 that 

Kazakh oil would again be transported via the BTC: 

Tengizchevroil, the operator of the Tengiz field, announced it would be exporting 400,000 tons per month 

via the pipeline, shipping the oil across the Caspian 

by tanker.31 The agreement also included provision 

for an increase in Kazakh oil shipments via the BTC 

to around 20 percent of the pipeline’s throughput capacity by 2018-20, once production at the Kashagan 

field moves into its second phase. It is expected that 

Kazakhstan’s oil exports will double once Kashagan is 

fully productive, necessitating a significant expansion 

of export infrastructure capacity, including greater 

use of the BTC and cross-Caspian tanker routes.

Kazakhstan has signed a memorandum with 

Azerbaijan on the development of a Kazakh Caspian 

Transportation System (KCTS), although progress has 

been slow. The agreement between KazMunaiGaz 
20

and SOCAR (the national oil companies of Kazakhstan and Azerbaijan), signed with the operators of the 

Kashagan and Tengiz fields, was intended to develop 

oil shipment routes to deliver crude from these two 

fields to the BTC and onward to international markets.32 The KCTS is an integrated system consisting of 

a pipeline to transport crude from Eskene and Tengiz to an oil terminal in Kuryk on the Kazakh coast 

of the Caspian Sea, tankers and vessels to transport 

crude across the Caspian, an oil discharge terminal 

on the Azerbaijani coast, and connecting facilities to 

the BTC. The original agreement envisaged the project being operational by 2013-14, initially transporting 

up to 23 million tons of crude per year, increasing to 

36 million tons. However, in 2010, KazMunaiGaz announced that implementation of the KCTS was being 

postponed because of delays on the Kashagan project, which is not expected to get underway until 2014 

at the earliest.33 Nevertheless, Kazakhstan still ships 

crude oil across the Caspian and exports it via Azerbaijan, as discussed previously. Azerbaijan’s Energy 

Ministry expects around four million tons of Kazakh 

oil to be transported via Azeri territory in 2014.34

The three major littoral producers of oil and gas—

Azerbaijan, Kazakhstan, and Turkmenistan—need to 

develop their maritime capabilities in order to be able 

to protect their interests in the Caspian Sea, including 

unexplored fields, production installations, and transport infrastructure such as tankers. Russia already 

dominates energy export infrastructure, giving it an 

undue amount of influence, and its investment in the 

Caspian Flotilla (whose roles include monitoring the 

extraction of hydrocarbons in disputed areas of the 

Sea) suggests a desire to maintain and possibly expand 

this influence. Some Russian observers have described 
21

the issue of pipelines in the landlocked Caspian region as a “battle for domination,” particularly on the 

part of the United States, which “is seeking to accelerate the process of the political and economic isolation 

of former Soviet republics from Russia.”35 While this 

view ascribes little autonomy of action to the states 

involved, it does highlight the suspicion with which 

Moscow regards growing Western (particularly U.S.) 

influence in the Caspian region. Russian successes, 

such as the subsea Blue Stream gas pipeline, are considered to be the result of the “failure of American 

pipeline strategy in the Caucasus and Central Asia as 

a whole.”36 A major division has opened up between 

supporters of Russian and non-Russian export routes, 

which has the potential to produce new dividing lines 

in an already unstable region. In March 2008, Russian 

Foreign Minister Sergei Lavrov had scathing remarks 

about European plans for a Southern Corridor to 

transport energy from the Caspian region, describing 

the proposal for the multibillion-dollar, 3,900 kilometer (km) Nabucco pipeline linking Turkey and Austria as an “obviously artificial project.” He stated that 

Russia has: 

answers that are economically more effective, and we 

are going to realise them. Blue Stream is already operational. The Caspian gas pipeline, expansion of the 

Central Asia-Centre gas pipeline, Burgas-Alexandroupolis, Nord Stream and South Stream: all these rest on 

a rational economic base.37

The decision to drop the Nabucco pipeline in favor of the more economically viable Trans-Adriatic 

(TAP)/Trans-Anatolian (TANAP) pipeline project 

suggests there was an element of truth in Lavrov’s 

words. Nabucco was driven by political, rather than 
22

commercial, considerations, but the European Union 

(EU) appeared determined to drive it forward. The 

BTC was a triumph of politics over commercial sense; 

thus the precedent had been set. However, ultimately, 

shifts in the European gas market meant that Nabucco 

lost its strategic advantage, and the decision to abandon it was made on a commercial, not political, basis. 

The U.S.$7 billion, 2,000-km TANAP pipeline will initially transport up to 16 Bcm of gas (expected to reach 

31 Bcm by 2023) from Azerbaijan to Turkey, where it 

will connect with the TAP, which links Turkey to Italy 

via Greece and Albania. The first gas flow is expected 

in 2018. These pipelines will be part of the Southern 

Gas Corridor, which will encompass planned infrastructure projects to transport natural gas from the 

Caspian and Middle East to European markets, in 

addition to existing supply corridors from Russia, Africa, and the North Sea. In its second Strategic Energy 

Review, released at the end of 2008, the European Commission (EC) called for the development of a Southern 

Gas Corridor to be recognized as an energy security 

priority for the EU, reducing European dependence 

on Russia as a supplier of oil and gas.38

The proposed Trans-Caspian Gas (TKG) Pipeline 

is a further element of the Southern Corridor, but, until recently, the project had been on the back burner.

In 2011, Medvedev warned that construction of the 

pipeline, planned by Azerbaijan and Turkmenistan 

and supported by the EU, is unacceptable until all five 

littoral states have reached agreement over the legal 

status of the Sea, an issue that has remained unresolved since the collapse of the USSR. Nevertheless, 

Azerbaijan and Turkmenistan have declared that the 

TKG will cross the Caspian within their own national 

sectors and therefore the other littoral states have no 
23

say. In November 2013, the EU made it clear that it 

was intent on pushing ahead with the project, despite 

Russian unease. Denis Daniilidis, head of the EU mission in Turkmenistan, said that conditions were “most 

favourable” for the construction of the pipeline, and 

that the EU and Turkmenistan were in the final stages 

of their negotiations.39 The 300-km pipeline will cross 

the Caspian from Turkmenistan to Azerbaijan, where 

it will feed into the South Caucasus country’s existing 

gas export infrastructure. It will enable Turkmen gas 

to reach European consumers without having to transit through the Russian pipeline network. However, 

this will mean a reduction in transit tariffs for Moscow, 

which, as mentioned previously, is unhappy that the 

project may begin before final agreement between the 

Caspian Five on the Sea’s legal status. Igor Bratchikov, 

the Russian president’s special envoy for the delimitation and demarcation of borders with the Commonwealth of Independent States (CIS), warned of the potential “catastrophic” impact the pipeline could have 

on the Caspian’s “extremely sensitive ecosystem,” stating that in the event of an incident it would not be the 

Europeans (or Americans), but the littoral states who 

would have to tackle the aftermath.40 While potential 

environmental damage is clearly a concern, Russia is 

using these instrumentally to mask its real concerns, 

namely, the loss of influence and transit tariffs that will 

result from the construction of the TKG. Mikhail Aleksandrov from Moscow’s Institute of CIS countries has 

warned that “the West is underestimating Moscow’s 

resolve to resort to force in order to prevent the realisation of pipeline projects across the Caspian Sea.”41 It 

is very unlikely that Moscow will resort to the use of 

force to prevent the construction of the TKG, although 

it is likely to continue to voice its opposition and use 
24

its influence to “persuade” Azerbaijan and Turkmenistan to abandon the project. Russia has watched its influence over pipelines and export infrastructure in the 

Caspian Basin erode over the past decade, which has 

had both an economic and political impact: Moscow 

has lost out on revenue from transit tariffs, but has 

also seen its political dominance undermined. The upgrade of the Caspian Flotilla is a strong signal that it 

is unwilling to cede any further influence and intends 

to remain the predominant power in the Caspian 

Sea region.

Cooperating for Caviar?

In addition to its significant hydrocarbon reserves, 

the Caspian contains another high-value natural resource: it is home to five of the most valuable species 

of sturgeon, which produce caviar. According to scientists from the Caspian Sea Fish Scientific-Research 

Institute, the commercial value of the Sea’s biological 

wealth, if properly managed, amounts to 1.1 trillion 

rubles (U.S.$37 billion), equivalent to the total market value of the Sea’s recoverable reserves of oil and 

gas.42 This makes them highly sought after, by legal 

and illegal means, and illegal poaching of sturgeon is 

a serious problem for the littoral states. Poaching and 

uncontrolled fishing have had a dramatic impact on 

the Caspian’s sturgeon population since the collapse 

of the Soviet Union: stocks of beluga sturgeon in the 

Sea have fallen by 30-40 percent over the past decade, 

and some species of the fish are on the verge of extinction.43 According to the Iranian International Scientific 

Research Institute, at the current rate of decline, wild 

sturgeon may be extinct by 2021.44
25

Reflecting the lack of consensus about the Caspian’s legal regime, the five littoral states have yet 

to reach agreement on the best way to manage the 

remaining sturgeon stocks. Russia introduced a ban 

on the commercial fishing of sturgeon in 2002 and a 

complete ban on all fishing in 2007, although there 

is an exemption for scientific research. The only legally available caviar in Russia currently comes from 

farmed (not wild) sturgeon. In 2012, head of Russia’s 

Federal Fisheries Agency Andrei Krainy said that 

the ban on fishing may be lifted if the other four littoral states agreed to a 5-year moratorium to enable 

sturgeon stocks to recover.45 Kazakhstan has banned 

sturgeon fishing in its sector of the Caspian. However, 

although the five littoral states formally agreed on an 

institutional mechanism and common environmental 

policy in the sea under the Framework Convention for 

Protection of the Marine Environment of the Caspian 

Sea signed in Tehran in 2006, the first legally binding 

regional agreement, they have yet to fully implement 

it or reach any common agreement on fishing quotas 

or a moratorium on fishing. Azerbaijan and Iran support a ban, but Turkmenistan does not.

As mentioned previously, poaching is a serious 

problem. Russia’s Border Guards service said it seized 

seven tons of illegally caught sturgeon in 2011. In the 

first 10 days of a joint month-long operation conducted by Russian and Kazakh border guards in October 

2013, over 17 km of net was seized, along with 10,000 

fish hooks.46 At the end of November 2013, Kazakh 

border guards killed a suspected Russian poacher 

during an anti-poaching operation in the Caspian. According to reports, eight small boats refused to stop 

for inspection, forcing the border guards to open fire.47

The high value of the sturgeon and their caviar mean 
26

that poachers are willing to take greater risks to protect their income. According to one report, “80 percent 

of the poachers are now armed with small arms and 

grenades; the more sophisticated are even using space 

tracking systems to locate the exact position of the 

shoals,” prompting Vladimir Putin to describe their 

activities as not just poaching, but “bioterrorism.”48

Given the high value of the sturgeon and the scale of 

illegal fishing and poaching, it is not surprising that 

the littoral states are investing in smaller, faster naval 

vessels in an attempt to interdict illegal activities and 

protect their national interests. 

THE UNCLARIFIED LEGAL STATUS 

OF THE CASPIAN

The unclarified legal status of the Caspian Sea remains a serious impediment to the development of 

the region’s natural resources (including sturgeon and 

hydrocarbon reserves) and the establishment of a stable security environment. It also facilitates illegal fishing and poaching. During the Soviet era, there were 

only two states bordering the Caspian Sea: the USSR 

and Iran. The collapse of the USSR in 1991 saw the appearance of four new states in its place—Azerbaijan, 

Kazakhstan, Russia, and Turkmenistan—all of whom 

had access to the Sea’s valuable natural resources. The 

legal status of the Caspian Sea was thrown into doubt, 

and a dispute has been simmering since 1991. Ongoing negotiations between the Caspian Five have so far 

failed to establish whether the Caspian is legally considered to be a lake or inland sea. This lack of agreement means that the area remains one of political dispute that has, at times, threatened to turn into military 

action. In addition to the lack of clarity over the Sea’s 
27

legal status and whether it is a sea or a lake, there is 

also disagreement among the littoral states over how 

to demarcate the Sea and what legal regime to apply 

(for example, median line or condominium). 

Russia’s position has shifted since 1991: Initially it 

supported the condominium approach, which would 

entail an equal division of the Sea among the five littoral states (giving them 20 percent each) and common 

sovereignty of its resources, without dividing it up 

into national zones. It was opposed to any unilateral 

action by the littoral states with regard to development 

of the Sea’s resources and was furious when Azerbaijan announced its so-called “contract of the century” 

with international oil companies in 1994. However, by 

1998, following the discovery of hydrocarbons in its 

sector of the Sea, the Russian government had moved 

to support a median-line approach, giving each state 

a share proportional to the length of its Caspian coastline. The year represented a turning point for the division of the Caspian. Viktor Kaluzhny, then Russia’s 

Minister for Oil and Gas, stated that “[w]e will divide 

the seabed or, more precisely, the resources of the seabed. The water is common to all, it has no borders.”49

The lack of progress toward consensus among all five 

states stimulated bilateral negotiations between the 

three northern states. In 2002, Russia and Kazakhstan 

agreed to share the northern section of the Caspian 

seabed and established an official line demarcating the 

two national zones. Under the agreement, each country will exploit half of the three oil and gas fields in the 

disputed area, Kurmangazy, Tsentralnoye, and Khvalinskoye. In 2003, Russia, Azerbaijan, and Kazakhstan 

divided the northern 64 percent of the Caspian seabed 

into three unequal parts, using a median-line principle, giving Kazakhstan 27 percent; Russia, 19 percent; 

and Azerbaijan, 18 percent. 
28

Iran believes that the status of the Caspian Sea 

should be resolved on the basis of consensus between 

the five littoral states and has rejected bi- and trilateral deals struck between Russia, Kazakhstan, and 

Azerbaijan. It supports the “condominium” concept 

and equal division of the Sea among the five littoral 

states. The Iranian government has also consistently 

insisted that the 1921 and 1940 agreements between 

the USSR and Tehran are to remain legally binding. 

This has put it in conflict with Azerbaijan, which is 

calling for the Law of the Sea (and thus a median-line 

principle) to be applied (under which Iran would get 

14 percent) and has also continued to sign exploration agreements with oil companies despite the lack of 

consensus among the littoral states. 

Iran wants a suspension of all oil and gas activity 

in disputed areas until an agreement has been reached 

on the division of the Caspian. Confrontation erupted 

in July 2001, when an Iranian warship threatened a 

geological survey ship in Azerbaijan’s territorial waters. The ship was surveying the Alov-Sharg-Araz 

contract area (known as Alborz to the Iranians) for 

BP. The Iranian action was prompted by BP’s plans to 

drill an exploration well at the Alov field in 2002 in the 

absence of a multilateral agreement on the Sea’s legal 

status. The Azeri government claims that the disputed sector is located above the Astara-Gasankuli line, 

which links residential areas on the coasts of Azerbaijan and Turkmenistan. During the Soviet era, this 

line marked the Soviet-Iranian border in the Caspian 

Sea. BP subsequently suspended exploratory drilling 

at the site, scheduled for 2002. ExxonMobil also postponed the development of the offshore Savalan block, 

citing concerns about the unclarified legal status of 

the Caspian Sea. The 850-square-km block is located 
29

in the southern sector of the Caspian, an area that is 

the focus of a border dispute between Azerbaijan and 

Iran. These territorial disputes contribute to tensions 

between the two countries, which are exacerbated 

by Azerbaijan’s burgeoning relationship with Israel 

(see Table 3).

Table 3. Fields Under Dispute.

Azerbaijan has also failed to resolve a dispute with 

Turkmenistan over ownership of specific fields in the 

Caspian, notably the Kyapaz field—called Serdar by 

Turkmenistan—which has estimated reserves of over 

50 million tons. In May 2001, Turkmenistan threatened Azerbaijan with legal action after the failure of 

bilateral talks between the two countries on several 

disputed oil fields. The Azeri and Chirag fields, which 

are being developed by the AIOC as part of the “contract of the century,” are also in dispute. Turkmenistan calls these fields Khazar and Osman and claims 

they lie partly in Turkmen territorial waters. Azerbaijan has offered to jointly develop the fields with 

Turkmenistan, but the latter has refused and, in 2009, 

Gurbanguly Berdymukhammedov announced that 

the government would seek dispute resolution at the 

International Court of Arbitration.50

Name Who?

Azeri, Chirag

(Khazar, Osman)

Azerbaijan

Turkmenistan

Kyapaz (Serdar) Azerbaijan

Turkmenistan

Araz, Alov and Sharq

(Alborz)

Azerbaijan

Iran
30

Azerbaijan is the only littoral state to have formally 

asserted its sovereignty over its sector of the Caspian 

Sea in any official document. The country’s constitution states that “[t]he internal waters of the Republic 

of Azerbaijan, the sector of the Caspian Sea (lake) 

belonging to the Republic of Azerbaijan, and the air 

space over the Republic . . . are integral parts” of the 

country’s territory.51 Despite the ongoing ownership 

disputes with Iran and Turkmenistan, the country 

has continued to develop its Caspian hydrocarbon resources and press ahead with negotiations on the proposed TKG highlighting Baku’s belief that agreement 

on demarcation among all five states is not necessarily vital. In spite of Azerbaijan’s confidence, the lack 

of consensus on the Sea’s legal status impacts upon 

maritime navigation, environmental protection, pipeline construction, and exploitation of the Sea’s natural 

resources, including its hydrocarbons and sturgeon.

THE CASPIAN AND RUSSIAN SECURITY

The Caspian Sea is part of Russia’s “southern 

underbelly” (yuzhnaya podbryush’ye), a term that underscores the sense of vulnerability it feels along its 

southern border (which also includes the Caucasus). A 

2009 article in the Russian military journal, Voennaya 

Mysl’, emphasized the significance of the “south,” describing it as “the most worrying in terms of ensuring 

the national security of the Russian Federation. It is 

on our southern flank that events occur which directly 

affect national security and require a clear definition 

of Russia’s geopolitical interests.”52 As discussed previously, the area is rich in resources, but also contains 

contested borders, increasing tension between states, 

notably Azerbaijan and Iran, and numerous trans-
31

national security challenges, including unresolved 

conflicts, organized crime, trafficking, and migration. 

Furthermore, it is an arena of competition between 

the principal regional and external powers. Thus, the 

Caspian is vital for Russian national security, both in 

terms of its natural resources and as a source of an array of cross-border security challenges, as evinced by 

the Caspian Flotilla’s combat capability upgrade. 

Russia’s 2009 National Security Strategy (NSS) outlines the principal threats to Russian national security, 

including extremism, transnational criminal organizations, and illegal trafficking, noting that the protection 

of state borders was crucial to tackling these and preventing them from undermining Russian security. It 

identifies the Caspian region as an area from which 

particular challenges to Russian national interests and 

security may emanate and states that, in the future, 

there may be a competition for natural resources between states, which could lead to greater interest to 

traditionally Russian areas of interest: 

In the long term, the attention of international politics 

will be focused on ownership of energy resources, including in the Middle East . . ., the Arctic, in the Caspian basin and in Central Asia. . . . Under conditions 

of competition for resources, it is not excluded that 

arising problems may be resolved using military force, 

and that the current balance of power on the borders 

of Russia and its allies may be disturbed.53

The Caspian’s hydrocarbon resources are unquestionably attracting considerable international interest 

and involvement, leading to a competition for influence between the major powers—demonstrated most 

recently by the sale of an 8.33 percent stake in the 

Kashagan development (held by major U.S. oil com-
32

pany ConocoPhillips) to China’s CNPC, which was 

favored over India’s ONGC. The growing presence of 

international actors in the Caspian region is of concern 

to Moscow, which perceives it to be a challenge to its 

own interests and influence in the area, especially 

with regard to pipelines. The NSS goes on to state that:

The resolution of border security problems is achieved 

by creating high-technology and multifunctional 

border complexes, particularly on the borders with 

the Republic of Kazakhstan, Ukraine, Georgia and 

Azerbaijan, and likewise by increasing the effectiveness of state border defence, particularly in the Arctic 

zone of the Russian Federation, the Far East and on the 

Caspian.54

Russia’s western coastline on the Caspian is a volatile neighborhood, containing the ongoing insurgency 

in the North Caucasus, which has engulfed Dagestan 

on the Caspian Sea. Although Moscow formally declared the end of its “counterterrorism operation” in 

Chechnya in the spring of 2009, it is still tackling an 

ongoing insurgency across the North Caucasus, and 

the region remains very unstable. In 2010, the Russian 

authorities admitted that the situation had deteriorated significantly, and that it is fighting an insurgency 

throughout the region. There has been a continuous 

campaign of assassinations targeted against local officials, particularly clerics and security representatives, 

and a string of terrorist attacks against economic targets such as railway lines, gas pipelines, and other 

strategic infrastructure. While the situation in Chechnya provided the inspiration for growing radicalism 

across the North Caucasus, recent violence in the region has been fueled by corrupt local governments, 

poverty, and the Kremlin’s policy of seeking to exert 
33

direct control over republics; for example, appointing 

regional leaders instead of allowing them to be elected 

locally, as was previously the case. Dagestan, on the 

Caspian’s western coast, has been particularly badly 

affected by the insurgency. This is of concern to the 

Caspian Flotilla, as the Kaspisyk base, where several 

of the most potent new ships are based (including the 

Gepard class Dagestan and Tatarstan), is located only 

20 km from the Dagestani capital, Makhachkala.

Interestingly, when Russian Defense Minister Sergei Shoigu identified three principal military threats 

to Russian security in November 2013, the North Caucasus insurgency was not on the list, although international Islamist terrorism was. In addition to this, he 

specified the withdrawal of Western coalition forces 

from Afghanistan in 2014 and continued NATO enlargement on Russia’s borders.55 The Russian government is very concerned about the impact of ISAF’s 

withdrawal from Afghanistan in 2014 and the potential for instability affecting its Central Asian neighbors and, ultimately, Russia. Konstantin Sokolov, vice 

president of Russia’s Academy of Geopolitical Problems, highlighted Russian concerns about instability 

in the wider Middle East region spreading to Russia 

and the Caspian region:

What happens in the Near East reaches Russia fairly 

quickly. The conflict will move in the direction of Iran, 

and this is already the Caspian region. If combat operations begin in Iran, the strategic ties between that 

country and China, which receives energy sources 

from Iran, will be disturbed. There is a danger of the 

undermining of stability in Central Asia. It would not 

be difficult to do this, because the economic situation 

of the majority of inhabitants there is very difficult. 

From there, the conflict would cross into Russia.56
34

The upgrade of the Caspian Flotilla highlights the 

sense of vulnerability Russia feels along its southern 

periphery. Stability and predictability are core concerns for Russia in the Caspian region, and Russia is 

seeking to assert its control over the area to ensure 

these objectives, which potentially could be undermined by security challenges such as the activity of 

terrorist and extremist groups and criminal organizations, as well as the increasing influence of external 

actors, particularly the United States and the West. 

Russia is keen to reassert its influence, both within the 

Caspian region and across the former Soviet space, to 

counter the perceived expansion of Western involvement, within its “sphere of influence.” The decision to 

upgrade the Caspian Flotilla was made over a decade 

ago, at a time of growing concern about rising Western interest in the region. On his arrival in the Kremlin 

in 2000, Putin was determined to reassert Russian influence in the Caspian region to counter the growing 

influence of external actors such as Turkey, the United 

Kingdom (UK) and the United States. The issue was 

considered of such importance that it was discussed 

at a session of the Russian Security Council in April 

2000. Putin was quoted in Russian media reports 

as stating: 

We must understand that the interest of our partners 

in other countries—Turkey, Great Britain, and the 

USA—toward the Caspian Sea is not accidental. This 

is because we are not active. We must not turn the 

Caspian Sea into yet another area of confrontation, no 

way. We just have to understand that nothing will fall 

into our lap out of the blue, like manna from heaven. This is a matter of competition and we must be 

competitive.57
35

Putin’s statement reflects the broader Russian political narrative, which remains dominated by talk of 

“competition” and the need to be “competitive” with 

the West, highlighting the zero-sum approach that 

Moscow tends to take in its foreign policy: the statement above suggests there is little room for cooperation or collaboration. Russia’s response to suggestions 

that the United States may establish a presence at the 

Kazakh port of Aqtau, as a means of getting its military equipment out of Afghanistan, highlighted its opposition to the presence of any external actors in the 

closed system of the Caspian Sea, as mentioned earlier. Russian sentiments reflect those of the other littoral states: the leaders of the Caspian Five have long 

made it clear that the presence of external forces in the 

Sea would not be tolerated. This was noted in a formal 

document for the first time in the declaration signed 

by the Caspian Five at the Second Summit Meeting 

of Caspian Heads of State held in 2007 in Tehran, in 

which the littoral states formally agreed to deny access to third states who wished to use the region to 

launch military operations against any Caspian state, 

in an attempt to promote stability across the region. 

The declaration also stated that only littoral states 

were permitted to deploy ships and military forces in 

the Sea, again seeking to limit the influence of external 

actors, particularly the United States and the North 

Atlantic Treaty Organization (NATO). Regional stability is particularly important for Caspian states, as 

instability or renewed conflict could have a negative 

impact on the development of their hydrocarbon potential, including the construction of new export infrastructure, and deter vital foreign investment, ultimately undermining their economic development and 

possible internal political stability.
36

It has been suggested that an important objective 

of Russian foreign policy is the establishment of a 

multipolar world, an aim that can be achieved by securing the country’s geopolitical interests in various 

“vectors” encompassing the “southern geopolitical 

vector,” which includes the Caspian region and the 

Caucasus.58 This is reflected in key Russian strategic 

documents, including the 2008 Foreign Policy Concept, 

2009 National Security Strategy and 2010 Military Doctrine. All three documents emphasize the importance 

of a multipolar world, reflecting Moscow’s unhappiness with U.S. dominance of the international system, 

which it feels is destabilizing. The Kremlin has become increasingly concerned about growing U.S. (and 

European) influence in areas traditionally perceived 

as Russia’s “strategic backyard,” that is, in former 

Soviet states such as Georgia, Ukraine, and the Central Asian republics. In an attempt to counterbalance 

Western influence in the post-Soviet space and retain 

its leverage, the Kremlin is seeking to reassert its influence by political, economic, and military means. The 

military aspect of this approach is vital, as it provides 

credibility to the potential to project influence: without an effective and visible military capability, Russia’s ability to influence events in the Caspian would 

be undermined. Thus, the efficacy of Russian efforts 

to preserve its influence has been underpinned by its 

considerable military footprint across the “south.”

THE CASPIAN FLOTILLA

The Caspian is central to the maintenance of Russian national security, both in terms of its natural resources and as a source of an array of cross-border 

security challenges, demonstrated by the Caspian 
37

Flotilla’s combat capability upgrade. The Russian 

Ministry of Defence describes the Caspian Flotilla as 

“the guarantor of the integrity of maritime boundaries 

and the most important foreign policy tool of the state 

in the Caspian Sea,”59 highlighting the significance of 

the Flotilla for contemporary Russian security and the 

reason it is one of Russia’s only naval forces that has 

seen a growth in strength, rather than a reduction, in 

recent years, under Putin’s leadership.

Following the disintegration of the USSR in 1991, 

the Soviet Caspian Flotilla was divided evenly between 

the four former Soviet littoral states on the Caspian: 

Azerbaijan, Kazakhstan, Russia, and Turkmenistan. 

Kazakhstan and Turkmenistan ceded their share to 

Moscow, which operated a joint flotilla under Russian 

command.60 This joint flotilla was transitory, however, 

and the newly independent states soon decided to establish their own independent naval capabilities. The 

Flotilla’s base moved from Baku (now in independent 

Azerbaijan) to Astrakhan, a Russian port city at the 

mouth of the Volga River. It is estimated that Russia’s 

Caspian Flotilla initially comprised only of two frigates, approximately 12 patrol boats and some smaller 

vessels, and there was little investment in new equipment. This changed with Putin’s arrival in the Kremlin in 2000. One of his first priorities on taking power 

was to halt the perceived decline of the Russian armed 

forces. A program of reform was launched to modernize the armed forces, making them smaller, more affordable, and more flexible, configured to fight small, 

low-intensity regional conflicts as well as high-intensity global war. Military reform has led to cuts in both 

personnel and equipment, with the aim of creating 

a more mobile military with an expeditionary focus. 

The Pacific Fleet was slated to lose 5,000 personnel, 
38

while overall the Navy’s inventory was expected to be 

slashed from 240 vessels to 123 by 2016.61

However, there has also been considerable investment in modernization and rearmament. In September 

2010, Russian Defense Minister Anatoly Serdyukov 

declared that annual defense spending for the period 

2010-20 was expected to equate to 3.8 percent of the 

gross domestic product.62 In 2011, Dmitry Medvedev 

announced that over U.S.$700 billion would be allocated to modernize Russia’s defense armaments over 

the period 2011-20, although it was revealed in August 

2012 that as much as 70 percent of this would be held 

until after 2016.63 Thus, the modernization of the Caspian Flotilla is part of a wider expansion and renewal 

of Russia’s naval (and broader military) capabilities. 

The Flotilla has recovered from the collapse of the 

USSR in 1991 (and the subsequent redeployment from 

Baku to Astrakhan) and has been the focus of significant investment in recent years: by 2020, the Caspian 

Flotilla will have received as many as 16 new vessels, 

a striking amount for a relatively minor fleet operating in a closed basin (see Table 4). In addition to new 

vessels, the Flotilla has also acquired a new base at 

Kaspisysk, following a decision by the Russian naval 

command in 2010 to concentrate its missile grouping 

there. While Astrakhan is still Russia’s principal port 

on the Caspian, it has invested in the development of 

this new port in the volatile North Caucasus republic 

of Dagestan.
39

Table 4. Caspian Flotilla Vessels.

Russia is focused on the establishment of forces that 

are able to deploy rapidly and cope with instability on 

its periphery, but that also signals its intent to remain 

a dominant force in the region. Speaking in 2012 prior 

to the commissioning of the Dagestan Gepard class frigate, Dagestani president Magomedsalam Magomedov 

voiced his pleasure that “one of Russia’s most powerful ships” was to be based on the Caspian: 

It is good news for our foreign allies, and a weighty 

argument for those who are not. Today, the Caspian 

Sea and Caucasus are places where interests of various 

powers intersect, so Russia must have a mighty fleet 

here. I’m sure that the frigate Dagestan and further 

ships will strengthen that might.64

Name Class Type Year Commissioned

Dagestan Gepard Frigate 2012

Tatarstan Gepard Frigate 2003

Makhachkala Buyan Corvette 2012

Volgodonsk Buyan Corvette 2011

Astrakhan Buyan Corvette 2006

Grad Sviyazhsk Buyan-M Corvette 2013

Uglich Buyan-M Corvette 2013

Veliky Ustyug Buyan-M Corvette under construction

Zelyony Dol Buyan-M Corvette under construction

Serpukhov Buyan-M Corvette under construction

Borovsk Matka Hydrofoil missile boat 1983

Buddenovsk Matka Hydrofoil missile boat 1983

various Serna Landing craft 5 in service; 3 purchased in 2013
40

The Dagestan is armed with the Kalibr-NK system, 

making it far more potent than her sister ship, the 

Tatarstan, both of which are located in Kaspisyk. According to the Russian Ministry of Defense, the frigate, which is “absolutely invisible to enemy radar,” is 

armed with cruise missiles that have a range of over 

2,000 km and “considerably boost Russia’s military 

capability. . . . [N]o other flotilla on the Caspian has 

systems effective against both ships and land targets”:

The Dagestan in effect heralds the start of qualitative 

and comprehensive re-equipment of the Caspian Flotilla as a whole, moreover, not just technically, but also 

conceptually. As early as next year [2013], the Russian 

Navy on the Caspian will add at least three more mobile, quick ships armed with cruise missiles. This type 

of armament at sea is now becoming the main one. By 

2015, the Flotilla will be renewed almost completely.65

The Dagestan frigate is just one of a range of new 

vessels that have been commissioned into the Caspian 

Flotilla over the past decade (see Table 4), developed 

to operate in shallow littoral waters, rather than bluewater operations. The Makhachkala, Volgodonsk, and 

Astrakhan are the Caspian Flotilla’s small artillery 

ships. These Buyan class littoral patrol vessels cost 

an estimated U.S.$20 million each and are relatively 

heavily armed for their size, equipped with SA-16 

Gubka (Strelets) surface-to-air missiles and a rapidfiring main gun with a 15-km range. Each ship also has 

two 30 milimeter (mm) six-barreled AK-630 cannons, 

two 14.5-mm machine guns, three 7.62-mm machine 

guns and a UMS-73 Grad-M 122-mm multiple rocket 

launcher.66 The Buyan-M variant is a more heavily 

armed version. The Grad Sviyazhsk is the lead ship of 

the Caspian Flotilla’s Buyan-M class small guided-mis-
41

sile ship series, which also includes the Uglich, Velikiy 

Ustyug, and the Zelenyy Dol (currently under construction in Tatarstan). They are multi-purpose river/sea 

ships equipped with the Kalibr-NK anti-ship missile 

system, 100-mm and 30-mm guns, as well as Igla-1M 

air defense missiles.67 They also incorporate “stealth” 

technology for a reduced radar signature: inclined 

flat superstructure surfaces, hull skirting, doors, and 

hatches concealed within the superstructure and 

deck.68 According to the Ministry of Defense, the 

Buyan-M class ships are intended to protect Russia’s 

offshore economic zones and have been designed to 

engage surface warships in littoral areas and rivers.69

This reflects the roles assigned to the Caspian Flotilla, 

which includes the protection of Russian shipping, as 

well as providing protection to Russian hydrocarbon 

production facilities at sea against potential threats, 

monitoring the extraction of hydrocarbons and bioresources in disputed areas of the Sea.

In addition to the new vessels, the strike power 

of the Flotilla has also been augmented by a separate 

coastal missile battalion that was established at the 

beginning of 2011, equipped with Bal-E anti-ship missiles with a range of 130 km. Speaking in November 

2012, commander of the Caspian Flotilla Rear-Admiral Sergei Alekminskiy discussed the modernization 

of the Caspian Flotilla, outlining the Podsolnykh overthe-horizon radar station for aerial and surface observation and the new coastal battalion: 

We set up last year, and are making operational this 

year, a permanent–readiness shore battery equipped 

with the latest Bal missile, which has already been 

fired. . . . By 2016 the Caspian Flotilla will have a solid 

missile and gunnery group.70
42

The Bal coastal missile complex is capable of engaging targets up to 120 km away and includes a selfpropelled command, control, and communications 

post, as well as a self-propelled launcher and other 

vehicles.71 It has a defensive posture, which raises 

questions about the threat Russia sees approaching its 

territory from the waters of the Caspian. The acquisition of the system by the Caspian Flotilla also highlights Russia’s sense of vulnerability in the region and 

the desire to secure itself against all possible threats, 

both traditional state-based threats and nontraditional 

transnational security challenges such as trafficking 

and extremism. The Russian Navy has also purchased 

three additional Serna class landing craft for the Caspian Flotilla in addition to those already in service. 

The landing craft are air-cushioned, enabling them 

to deploy troops onshore more easily than ordinary 

vessels, and can carry either one tank or two infantry 

fighting vehicles, or a 92-man landing party.72

The new vessels have been put through their paces 

in several national and international exercises in the 

Caspian Sea. The Caspian Flotilla took part in Russia’s 

annual Kavkaz-2012 exercises, practicing “measures 

for maintaining favourable operational conditions in 

formations, areas of responsibility, defending the basing area and areas of economic activity, and blockading the coast.”73 Over 500 troops were put through a 

“mock offensive” operation, and there was a joint missile firing session that included a strike force of ships 

(including the Tatarstan, Dagestan, Borovsk, and Budennovsk) and the BAL coastal defense missile system, firing anti-ship cruise missiles at the “enemy’s” force of 

amphibious warfare ships.74 A squad of divers operating from the Astrakhan in the northern Caspian also 

fired underwater arms and hand-held grenade launch-
43

ers at a sailing object, according to the Interfax-AVN 

military news agency. Furthermore, a group of trawlers destroyed mines “using their artillery systems.”75

Speaking at the opening of the Kavkaz-2012 exercises, 

Putin stated that the exercises had one objective: “[T]

he Armed Forces must demonstrate their readiness to 

defend our national interest and show that they are 

ready to decisively rebuff any threats or challenges to 

Russia’s national security.”76

The Flotilla held another series of exercises in August 2013, including missile launches, artillery fire, a 

simulated sea battle, and minesweeping. A total of 10 

warships and support vessels took part, along with 

over 1,300 servicemen and a BAL coastal missile system. According to the Russian Ministry of Defense the 

BAL missile complex performed a combat exercise 

involving the detection and launch of a missile strike 

on an adversary’s flotilla.77 Interestingly, the exercise 

involved rehearsing maneuvers against an opposing 

group of combat vessels, as well as thwarting plans 

to land an assault force, all moves that anticipate offensive action from a state, rather than nonstate, actor: 

nonstate actors such as transnational extremist groups 

are unlikely to deploy a detachment of combat vessels or to be able to marshal the numbers necessary to 

land an assault force. This raises questions as to the 

perceived threat that the Russians are preparing to 

counter. The August 2013 exercises appear to be intended to simulate offensive action by a state, but, as 

the Caspian Sea is a closed body of water, this leads to 

the conclusion that the state on the attack would be a 

littoral state. Furthermore, Russian policy documents 

such as the NSS and Military Doctrine indicate that, 

with the exception of NATO enlargement, the greatest 

national security challenges come from nonstate actors such as criminals, smugglers, and extremists. 
44

Little wonder that in an article published in 2011, 

Mikhail Barabanov dismissed the Caspian Flotilla, 

stating that its existence did not “make any practical 

sense because of the weakness of the naval forces of 

the other Caspian states and the absence of any real 

missions with respect to the combat use of the flotilla.”78 Questions over the Flotilla’s combat role were 

also highlighted during Tsentr-2011, an exercise held 

for member-states of the Collective Security Treaty 

Organization (CSTO) that included a joint exercise 

that involved Russia’s Caspian Flotilla, the Kazakh 

Navy, and the air forces of both countries repelling 

a theoretical attack against Kazakhstan—the objective of which was to seize oil fields. According to an 

analysis of the exercise in Nezavisimaya Gazeta, the 

Russo-Kazakh grouping “repelled massive enemy 

missile strikes, the landing of a hostile amphibious assault force and a ground invasion by . . . mechanised 

columns.”79 However, the analysis raised questions 

about the perceived enemy:

From where in a closed sea-lake, the only exit from 

which is completely controlled by Russia, will you 

get enemy ship groupings, capable of landing assault 

forces and supporting them with fire from the sea? 

And in the process this mysterious enemy will also 

inflict massive air strikes and will carry out a ground 

invasion! What country is this? Is it really Iran? There 

simply aren’t any other candidates, as the ships of 

non-littoral states cannot enter the Caspian Sea without Russian authorisation. But the Iranian Navy is totally incapable of conducting these operations on the 

Caspian.80
45

OTHER CASPIAN NAVIES

Russia’s investment in its Caspian Flotilla has been 

reflected by an increase in expenditure and capabilities 

of the other four littoral states. After years of underfunding, Azerbaijan, Kazakhstan, and Turkmenistan 

have been upgrading their naval capabilities recently, 

largely to ensure better control over their oil and gas 

reserves and installations in the Caspian.

Kazakhstan. 

Although it withdrew from the joint flotilla under 

Russian command in 1994, it was not until 2003, more 

than 10 years after independence, that Kazakhstan established its own naval forces. The decision followed 

the discovery of the giant Kashagan offshore oilfield 

and the realization that an effective naval force was 

required, if only to protect the country’s hydrocarbon 

installations and resources. Its 2011 Military Doctrine

identified the need to upgrade “military and other 

infrastructure” in the Caspian region, noting that the 

“unresolved legal status of the Caspian Sea, the effort 

of some Caspian countries to increase their military 

capability, and the disputed oilfields could worsen 

the regional military-political situation.”81 According 

to Commander in Chief of the Navy Rear Admiral 

Zhandarbek Zhanzakov, the upgrading of the Caspian Flotilla is also a factor in the development of a 

Kazakh navy: 

[A]nalysis of the naval forces of our neighbours shows their 

rapid development in order to change the current state of 

affairs in their favour. For example, two frigates—Tatarstan 

and Dagestan—equipped with modern missile systems 

and the new generation. . . . Astrakhan, built using stealth 

technology. . . .82
46

In 2012, Kazakhstan launched its first domestically 

built Katran class missile patrol ship, the Kazakhstan, 

equipped with “modernised anti-aircraft missile and 

artillery units.” The ship is the first of three to be built 

at the Zenit shipyards in Uralsk, Kazakhstan.83 According to a 2012 report in Jane’s Navy International, 

Kazakhstan also intends to procure three corvettes, 

possibly from South Korea,84 and there were also reports that it was considering the MBDA MM40 Exocet 

Block 3 anti-ship missile as a coastal defense weapon.85

Nevertheless, despite these plans and the modernization of port infrastructure at Aqtau, Kuryk, and Bautino, Kazakhstan has one of the weakest naval forces in 

the Caspian region, and the country needs to develop 

its naval forces to be able to protect its interests in the 

Caspian Sea and provide security for its offshore oil 

and gas installations, particularly Kashagan. As noted 

earlier, the Kazakh sector of the Caspian Sea is much 

shallower and thus impacts upon security: the offshore Kashagan field is potentially vulnerable, since 

it is located in shallow waters that freeze in winter, 

facilitating access by poachers, for example.

Azerbaijan. 

Like Kazakhstan, Azerbaijan’s defense priorities in 

the Caspian Sea are to protect its coastline and guard 

oil and gas installations. Despite significant spending 

on defense (reported to be over U.S.$3 billion in 2013), 

Azerbaijan has prioritized spending on its land and air 

forces, rather than its navy, because of the unresolved 

dispute with Armenia over Nagorno-Karabakh. There 

has been some investment in naval capabilities, and 

Azerbaijan intends to boost its capacities in the Cas-
47

pian as part of a naval modernization program. A new 

base for the country’s naval forces is under construction at Puta (in Baku’s Garabagh district), to replace 

the historic base in Baku, which should be operational 

by 2014, and the country also has plans to commence 

indigenous production of warships, although few 

details of this have been released.86

The U.S. Caspian Guard initiative has strengthened the naval capabilities of both Azerbaijan and 

Kazakhstan, providing training and equipment to the 

two countries in an attempt to help address counterproliferation, counterterrorism, and illicit trafficking as 

well as the protection of key economic zones, particularly hydrocarbon installations. Launched in 2003, the 

Caspian Guard has assisted the two countries in the 

integration of their airspace and maritime surveillance 

and control systems; their national command, control, 

communications, computers, and intelligence systems; and their reaction and response forces.87 American aid was forthcoming to assist Azerbaijan’s State 

Border Service in installing engineering equipment 

on the country’s southern borders in order to boost 

security, and the service was presented with U.S. cutters. Joint U.S.-Azeri naval exercises have been held 

in the Caspian Sea, highlighting the strategic importance of the region to the United States.88 The exercise 

angered Iran, which accused Baku of breaching an 

agreement between the Caspian Five that other countries not become involved in the settlement of regional 

problems.89

The United States has supplied Azerbaijan’s naval 

vessels with radar and communication equipment to 

help improve command and control.90 These initiatives have facilitated the development of new capabilities aimed at countering terrorism as well as smuggling, narcotics trafficking, and organized crime on the 
48

Caspian Sea. Furthermore, as part of the Weapons of 

Mass Destruction Proliferation Prevention Program, 

Azerbaijan’s coastal security has been strengthened 

by the use of a series of coastal radar stations, which, 

according to the U.S. State Department, is used “by 

the Navy, Coast Guard, and State Border Service to 

conduct maritime surveillance and detect smuggling 

threats.”91 However, these capability enhancements 

have focused on “softer” security challenges and, 

according to one assessment, have “not given Azerbaijan any offensive capabilities beyond an enhanced 

command and control and radar-based surface monitoring system, thereby depriving Azerbaijan of . . . 

the ability for real power projection.”92 This could be 

changed if the country begins to develop its own naval warships. According to a report on the website of 

Turkish newspaper Today’s Zaman in October 2012, 

Azerbaijan has ordered anti-ship missiles from Israel. 

The article analyzed this order in the context of poor 

relations between Baku and Tehran, and Iran’s “aggressive” behavior with regard to the Caspian Sea.93

Continuing tension between Azerbaijan and Iran has 

been exacerbated by Baku’s burgeoning relationship 

with Israel. Israel is reportedly providing Azerbaijan 

with Gabriel-5 anti-ship missiles, possibly to counter 

any potential threat from Iran. The growing number 

of Iranian naval vessels in the Caspian would enable 

Iran to support its territorial claims in the Sea and 

bring it into conflict with Azerbaijan.

Turkmenistan.

Like those of Kazakhstan and Azerbaijan, Turkmenistan’s navy is also undergoing expansion after 

years of underfunding, as the government seeks to 
49

ensure it is able to control and protect its hydrocarbon resources in the Caspian amid its ownership dispute with Azerbaijan. Until recently, Turkmenistan 

was considered to have the weakest navy among the 

Caspian littoral states: long regarded as constituting 

little more than a coastguard service, the navy has 

been upgrading both its infrastructure and fleet to 

improve its capabilities. The United States has provided Turkmenistan with a patrol boat, Point Jackson, 

to boost maritime security on the Caspian Sea, and, 

in 2009, Turkmenistan procured two Russian-built patrol boats with speeds of up to 50 knots.94 Two years 

later, it acquired two Russian-built Molniya class Project 12418 corvettes, armed with 16 Uran-E missile 

systems each, and reportedly has plans for procuring 

three more in the near future.95 Turkmenistan also ordered two 57m NTPB (new Type Patrol Boat) vessels 

from the Dearsan Shipyard in Turkey in 2010. According to a report in 2011, the Turkmen navy and coastguard constituted around 2,000 personnel and 16 vessels, up from less than 1,000 in 2006.96 The new vessels 

are equipped with surface-to-surface missiles, several 

guns, and short-range Igla manportable missiles. In 

addition to the purchase of new vessels, in 2009 President Berdymukhamedov announced plans to establish a naval base on the country’s southern Caspian 

coastline.97 The base is intended to facilitate the protection of maritime borders and protect the state from 

external threats such as smuggling and terrorism. The 

Turkmen president made it clear that the navy would 

not be used to settle territorial disputes with its neighbors, warning that there are “international terrorist 

groups” who would “like to disturb the Turkmen 

people’s peaceful life.”98 Berdymukhamedov has said 

that the establishment of the Turkmen navy should be 
50

completed by 2015, but has not specified how large it 

will be. Although these acquisitions have significantly 

improved Turkmenistan’s naval capabilities in the 

Caspian Sea, it remains one of the weaker naval forces 

in the region. 

Iran.

Under the terms of the Russian-Persian agreements 

of the 19th century (the 1813 Treaty of Gulestan and the 

1828 Treaty of Turkmenchai), Iran was not permitted to 

develop its naval forces in the Caspian Sea. This ban 

was maintained in the Soviet-Iranian treaties of 1921 

and 1940, so it was not until the 1990s that Iran was 

able to focus on the development of a Caspian fleet. 

Over the past decade, Iran has sought to make up for 

lost time and has begun to build up its naval capabilities in the Caspian. The naval base at the commercial 

port of Bandar-Anzali has been developed, while the 

infrastructure at other Caspian ports such as Nowshahr and Babolsar is reported to have undergone 

modernization.99 In 2004, Tehran launched a Sina class 

fast attack craft, launching another two in 2006 and 

2009,100 and in March 2013, it announced the launch 

of the Jamaran-2 Mowdge class frigate (the Velayat) into 

the Caspian Sea at the port of Bandar-Anzali. Iranian 

officials described the indigenously manufactured Jamaran-2 as a message of “peace and friendship,” although, inaugurating the vessel, President Mahmoud 

Ahmadinejad undermined this message by describing 

the ship as a “destroyer there to meet those who want 

to jeopardise the security of surrounding nations.”101

According to Iran’s Press-TV, production of the Jamaran-2 frigate began 2 years ago specifically with the 

“aim of protecting Iran’s 20 percent share of the Cas-
51

pian Sea.”102 This statement highlights Iran’s determination to increase its territorial claim in the Caspian, 

from the 14 percent accorded it under international 

law to the 20 percent it believes it is actually due. The 

launch of the frigate heightened concerns about Iranian intentions to support its territorial claims in the 

Caspian. At 94 meters long, the frigate is the second 

largest warship in the Caspian after Russia’s two Gepard class frigates, the Dagestan and Tatarstan. Harmer 

believes the frigate’s launch was intended to “underscore the extent of Iranian commitment to protecting 

and possibly expanding its interests in the Caspian” 

and reinforced a 2012 minelaying and minesweeping 

exercise held in Iran’s sector of the Sea, which “was . . .

part of a broader Iranian effort to secure its territorial 

claims in the Caspian.”103 He goes on to argue that, 

whatever its intentions may be, “it is a sign of Iranian 

resiliency and depth of industrial capacity that the 

Islamic Republic is able to conduct significant exercises and launch indigenously produced ships along 

multiple fronts.”104

The launch of the Jamaran-2 followed an Iranian 

threat in June 2012 to deploy Ghadir class midget submarines in the Caspian against a backdrop of worsening relations with Baku over the latter’s blossoming 

relationship with Israel. One analyst suggested the 

threatened deployment and expanded naval capabilities in the Caspian could enable Iran to deter any 

further cooperation between Azerbaijan and Israel.105

Certainly, Iran’s capabilities in the Caspian Sea are no 

longer solely defensive: they have acquired offensive 

capabilities.

Iran’s development of its naval capabilities in the 

Caspian is an important factor in the reshaping of Russian-Iranian relations, which could see the two states 
52

expanding their political cooperation into more active 

military cooperation. Putin has made mention in the 

past of forming some kind of alliance with Tehran, but 

this has been undermined by the fact that both states 

have very different expectations of their relationship. 

Nevertheless, they do share a common desire to limit 

the influence of external actors in the Caspian region, 

particularly the United States. Russia and Iran are 

seeking to strengthen their bilateral relationship, including naval cooperation, to boost maritime security 

in the Caspian Sea and ensure that their influence is 

not eroded by the appearance of actors from outside 

of the region. Speaking in November 2012, commander of the Caspian Flotilla Rear-Admiral Sergei Alekminskiy suggested that ships from the Caspian Flotilla could pay their first visit in 40 years to an Iranian 

port during 2013, stating that the Minister of Foreign 

Affairs would decide whether such a visit should go 

ahead, but that “we wish to see how the Iranian fleet is 

progressing.”106 This wish was partially fulfilled when 

two Iranian vessels docked in Astrakhan for 4 days in 

June 2013, the first time Iranian naval ships had been 

to Russia. According to Iran’s defense attaché in Moscow Colonel Soleiman Adeli, the Iranian-built ships 

were intended to “consolidate maritime relations between Tehran and Moscow, and promote peace and 

friendship” among the five littoral states: 

Iran and Russia both want Caspian Sea littoral states 

to maintain the security of the body of water without 

any interference from extra-regional powers. They regard the presence of outsiders in the sea as a source of 

tension and division.107

The two countries appear to be seeking to use their 

expanding naval capabilities to maintain the status
53

quo in the Caspian Sea region, which is to their own 

advantage, and deter other littoral states from developing effective relationships with external actors. This 

undermines the sovereignty of those states and their 

ability to pursue an autonomous foreign policy. It also 

has significant implications for states outside the region, such as the United States, who wish to deepen 

their engagement with, and influence on, the Caspian 

states. If Moscow and Tehran can get over their mutual suspicions and rivalry, they could be a powerful 

international force. Their relationship is driven by 

economic pragmatism and self-interest: Iran is a key 

economic partner for Russia, one of its largest customers for conventional weapons, as well as nuclear 

energy. Russia has also been one of Iran’s biggest supports in the United Nations, blocking sanctions and 

resolutions that would damage Iran and its ally, Syria. 

However, although Moscow is a strong supporter of 

Iran’s right to develop a peaceful nuclear program, it 

is wary of Tehran’s nuclear aspirations and certainly 

does not want to encourage the development of a nuclear power on its southern periphery. 

COMPETING OR COOPERATING? 

Russia is clearly wary of Iranian motives in the 

Caspian, but it is also keen to prevent any external 

actor gaining a foothold in the region, which is very 

unlikely given the closed nature of the Sea. Table 5 

illustrates Russian naval dominance in the region. Although there are no figures for Iran’s naval presence 

on the Caspian Sea, the fact that it has only recently 

started to develop its naval capabilities in the region 

suggests the number of Iranian vessels on the Caspian 

is minimal and currently poses little challenge to Rus-
54

sia. However, Iran is in the process of developing its 

naval forces in the Caspian, which may, in the future, 

threaten Moscow’s dominance. In his State of the Nation speech in December 2013, Putin affirmed that 

Russia will not allow any country to achieve military 

superiority over it, stating that: 

no one should entertain any illusions about achieving 

military superiority over Russia; we will never allow 

it. Russia will respond to all these challenges, both political and technological. We have all we need in order 

to do so.108

Table 5. Caspian Naval Forces.

The developments outlined in Table 5 suggest that 

the Caspian Sea is becoming increasingly militarized 

and raise the specter of a potential arms race in the region: where Russia leads, the other four littoral states 

are bound to follow. If Moscow is arming itself to defend against an array of perceived security challenges, 

then logically the other Caspian states are bound to 

be impacted by this. However, the littoral states are 

aware of the potential escalation that ongoing militarization may bring. In 1992, Iran stressed that the 

Caspian was a “sea of peace and friendship,” calling 

Population

(million) Armed Forces Navy

Azerbaijan 9.49 66,950 2,200

Iran 78.86 523,000 In Caspian?

Kazakhstan 17.52 39,000 3,000

Turkmenistan 5.05 22,000 500

Russia 142.86 845,000 20,000

(Caspian Flotilla)
55

for it to remain “nonmilitary.”109 The theme of peace 

and cooperation has been continued, and Azerbaijan’s 

President Ilham Aliyev has stated:

Azerbaijan has always favoured demilitarisation of 

the Caspian. Although we have a navy to help us protect our interests, we believe that the Caspian should 

be demilitarised, it must become a zone of peace. Cooperation, not rivalry, should prevail.110

Speaking at the 34th meeting of the Working 

Group on the Convention on the legal status of the 

Caspian Sea held in Moscow in November 2013, Russian Foreign Minister Sergei Lavrov stressed that under contemporary conditions, “it is crucially important to keep the Caspian region as a zone of peace, 

friendship and good neighbourliness.”111 He went on 

to say that Russia will continue using existing mechanisms to address “all fundamental Caspian issues 

only among ‘the five’ whose members have exclusive 

sovereign rights over the sea and its resources,” again 

highlighting Russia’s opposition to external actors 

playing any role in the negotiations.112 In his view, 

interference by external actors in Caspian issues does 

not help in their resolution. In an attempt to counter 

what it perceived to be a growing U.S. influence in the 

Caspian region (evidenced by Caspian Guard and the 

growing presence of international energy companies), 

in 2005 Lavrov proposed the creation of a common 

regional security alliance to include all five littoral 

states, the Caspian Naval Group for Operational Cooperation (KASFOR). The initiative was designed to 

counter common security challenges such as terrorism 

and potential military threats. However, the proposal 

failed to gain the support of all littoral states, some 

of whom were wary of joining a Russian-dominated 
56

security structure: although Iran was one of the first 

states to voice its support for the grouping, Azerbaijan 

refused to join, while Turkmenistan’s declared policy 

of neutrality in international affairs precluded its participation. KASFOR remains on the drawing board, 

and there is no single regional security system that 

includes all five Caspian states. In 2006, Russia proposed the establishment of a regional rapid reaction 

force in the Caspian Sea to tackle terrorism and other 

security challenges, another proposal that failed to get 

off the ground.113

There have been several other feeble attempts by 

the Caspian Five to establish multilateral cooperation 

on issues of regional security, with varying degrees of 

success. The first Summit Meeting of Caspian Heads 

of State took place in Turkmenistan in 2002. Despite 

agreeing to meet on an annual basis thereafter, the second meeting took place 5 years later in Tehran. At that 

meeting, the Caspian Five leaders adopted a 25-point 

declaration that pledged to seek to build and enhance 

mutual confidence, regional security, and stability, 

calling for: 

peaceful, just, and stable solutions to conflicts in line 

with the United Nations charter, also taking into account sovereignty, territorial integrity and the inviolability of internationally recognized borders to ensure 

security, peace and stability in the region.114

They formally agreed to deny access to third 

states who wished to use the region to launch military operations against any Caspian state, stating that 

“. . . they will not allow other countries to use their territories for acts of aggression or other military operations against any party.”115 The leaders of the Caspian 

Five have long made it clear that the presence of ex-
57

ternal forces in the Sea will not be tolerated, although 

the 2007 Summit declaration was the first time it was 

noted in a formal document. The declaration stated 

that only the littoral states were permitted to deploy 

ships and military forces in the sea, again seeking to 

limit the influence of external actors, particularly the 

United States and NATO. The declaration also provided for the development of nuclear energy for peaceful 

purposes and stated that the signatories bore “responsibility for damage inflicted on Caspian resources and 

to any Caspian state from the use of the Caspian Sea 

and development of its resources.”116 Despite being 

hailed by the Iranian president as a “turning point” 

in Caspian relations, there was no substantive change, 

and the 2007 declaration has proved to be little more 

than political rhetoric.

At the third Caspian summit held in Baku in 2010, 

a further 15-point declaration was signed, which included provision for multilateral cooperation on security issues, particularly environmental security, terrorism, organized crime, smuggling, trafficking, and 

illegal migration. One of the key points of the Agreement on Security Cooperation in the Caspian Sea was 

that the status of the Sea was to be determined only 

by the Caspian littoral countries, again highlighting 

the unwillingness of the Caspian Five to allow the involvement of any external actors. Russia and Iran are 

keen to ensure that they remain the dominant actors 

in the region and do not wish to see any third states, 

particularly the United States, establish any formal 

presence on the negotiating process over the Caspian’s legal status. This reflects Russian (and Iranian) 

intolerance of any increased U.S./NATO presence in a 

region it considers to be its “sphere of privileged interest.” Russia’s response to suggestions that the United 

States may establish a presence at the Kazakh port of 
58

Aqtau, as a means of getting its military equipment 

out of Afghanistan, highlighted its opposition to the 

presence of any external actors in the closed system 

of the Caspian Sea. An article in Nezavisimaya Gazeta

argued that if Aqtau became a base for “the Pentagon 

and its allies,” the “already fragile Caspian security 

architecture would effectively collapse.”117 In the article, Stanislav Pritchin from the Centre for the Study 

of Central Asia and the Caucasus warns that the presence of U.S. military personnel on the Caspian “will 

lead to an arms race in the region, particularly on the 

part of Russia and Iran.”118 Aleksandr Knyazev believes that both Russia and Iran have, until recently, 

“closed their eyes” to the U.S. presence in the region, 

particularly the American military support given to 

Azerbaijan and Kazakhstan in the development of 

their naval forces.119

As can be seen from the preceding paragraphs, 

there is very little security architecture in place in the 

Caspian region to actually “collapse.” There is some, 

very minimal cooperation between the Caspian Five, 

particularly on environmental issues, but, on the 

whole, the Sea remains dominated by Russia and its 

sizeable military presence. The lukewarm response to 

the KASFOR initiative has not deterred Russia from 

seeking to boost military cooperation among the littoral states and, as discussed previously, there have 

been several joint and combined military exercises 

involving the Caspian states, but this cooperation is 

negligible. The CSTO held its first joint peacekeeping exercises in Kazakhstan in October 2012: Nerushimoye-bratstvo-2012 (Unbreakable brotherhood-2012) 

involved the establishment of a collective peacekeeping force in a Central Asian CSTO member-state experiencing “a crisis situation as a result of activities 

of international extremist and terrorist organizations, 
59

as well as disputes between ethnic groups.”120 This 

reflects concern across the region about possible instability emanating from Afghanistan in the wake of 

ISAF’s withdrawal in 2014. Nevertheless, in spite of 

common concerns about instability from Afghanistan 

spilling over, unified action amongst the Caspian 

Five to mitigate any risk remains negligible, as the 

littoral states remain focused on national, rather than 

regional, solutions.

CONCLUSIONS AND RECOMMENDATIONS

Nearly 300 years old, the Caspian Flotilla has been 

undergoing an extensive upgrade, which has increased 

its capabilities significantly and signals Russian intent 

to remain the dominant power in the region: Moscow 

has firmly established its military dominance in the 

Caspian Sea, enhancing its maritime footprint and 

boosting its ability to shape the strategic environment. 

It is keen to secure its unstable “southern underbelly,” 

and the Caspian Flotilla is intended to protect Russia’s 

national interests and control a volatile region under 

threat from transnational security challenges, such as 

poaching, migration, a potential increase in drug trafficking as Afghanistan struggles to survive economically post-2014, and the movement of international 

extremist organizations. It is imperative to recognize 

Russia’s sense of vulnerability on its southern periphery, which is the source of many security challenges, 

and also Russia’s desire to remain the predominant 

power in the region, which has increased in significance since 1991 with the growing interest of external 

actors. Russia has strong historical, cultural, economic, and societal ties with the region and the “south” is 

one area where it remains the hegemon; no other state 

has yet established a presence to rival that of Russia. 
60

The Caspian Sea has been vital for the security of 

Russia and its southern periphery since the 18th century. There are significant similarities between historical 

events and contemporary circumstances in the region, 

and the drivers of international interest in the Caspian Sea have changed little: the region’s geostrategic 

significance, with Iran lying directly to the south, the 

vital importance of economic factors and maintaining 

access to natural resources, as well as lucrative trade 

routes, the competition for influence between different regional powers, and concern about the influence 

of external actors on the development of the region. 

Over the past few decades, the Caspian Sea has become pivotal for the United States (and the West), 

both in terms of its hydrocarbons, which provide an 

alternative source to Middle Eastern and Russian resources, and as an important transit route for the ISAF 

logistics operation. The decision to upgrade the Caspian Flotilla was made when Putin came to power at 

the beginning of 2000 and identified Russia’s south, 

and the Caspian region, as an area of strategic interest. 

The Russian narrative was (and remains) dominated by talk of “competition” and the need to be 

“competitive” with the West, which was perceived to 

be encroaching into an area that had previously been 

Moscow’s exclusive zone of influence. The Caspian’s 

natural resources, most notably its hydrocarbons, 

have led to the increased presence and influence of external actors, particularly from the United States and 

Europe, in a region that had been dominated by Russia for centuries. Oil and gas are the principal reasons 

for the interest of the West in the region, although the 

need to develop new transit routes in and out of Afghanistan has led to renewed interest in the region. 

Moscow has tolerated limited U.S. military support 
61

for Azerbaijan and Kazakhstan in terms of training 

and equipment support through the Caspian Guard 

initiative. However, the potential establishment of a 

transhipment base at Aqtau could exacerbate existing 

tensions in the region. Any such base developed on the 

Caspian Sea should be purely a civilian endeavor: the 

presence of U.S. military personnel and/or a U.S. military establishment in the region would be perceived as 

a provocative step by Moscow, which, as mentioned 

earlier, is determined to contain the influence of external actors. Russia is seeking to maintain the status quo 

in the Caspian Sea and ensure that its influence is not 

eroded by the appearance of actors from outside of 

the region, particularly by the U.S. and Western actors 

such as NATO. The United States should continue to 

develop its relations with states in the Caspian region, 

while acknowledging the significance of Russia’s role 

in the region, as well as the sense of vulnerability it 

feels on its southern periphery. 

The Caspian Sea is a unique area in several respects: its abundant natural resources, the lack of clear 

legal status, the growing presence and influence of 

external actors, and Russia’s relations with its neighbors. Russia does not have complete sovereignty over 

the Caspian Sea: it shares responsibility for governing the area with four other states, three of which are 

former Soviet states, making it harder for Moscow to 

influence and shape the environment to its liking. The 

region is also where Russia faces significant challenges to its national interests from transnational threats, 

such as terrorism, insurgency, poaching, and smuggling. This is reflected in the upgrade of the Caspian 

Flotilla, which has acquired a number of new vessels 

designed to operate in shallow littoral waters, rather 

than blue-water operations, and conduct low-intensity 
62

maritime security operations such as the protection of 

Russian shipping and Russian offshore hydrocarbon 

production facilities, as well as monitoring the extraction of hydrocarbons and bio-resources in disputed 

areas of the Sea. The Flotilla’s upgrade highlights the 

sense of vulnerability Russia feels in its south: stability and predictability are core concerns for Russia in 

the Caspian region and it is seeking to assert its control over the area to ensure these objectives. The new 

equipment being procured for the Flotilla is both defensive and offensive: the stealth capabilities would 

suggest an offensive posture, while the BAL coastal 

missile system is clearly defensive. The improvements 

to the Flotilla’s capabilities are also indicative of how 

well Russia is reconfiguring its armed forces to tackle 

the security challenges of the 21st century.

For the three “new” states in the Caspian, particularly Azerbaijan and Kazakhstan, hydrocarbon reserves in the Sea are vital for their economic growth 

and future development (and ultimately long-term 

survival). All three have considerable hydrocarbon reserves and hope to become major players on the world 

energy market. Furthermore, their extensive hydrocarbon reserves have stimulated a lot of international 

interest and increased the presence of external actors 

in the Caspian region. However, even if they increase 

the production of hydrocarbons, they still face several enduring obstacles: the difficulty of transporting 

products from the remote, landlocked Caspian region 

to lucrative international markets and the unclarified 

legal status of the Sea. The lack of clarity about the 

Sea’s legal status and the type of legal regime that 

should govern the maritime space represents the biggest impediment to stability in the region, creating 

uncertainty and political disagreement among states. 
63

There is a need to encourage prompt resolution of the 

protracted dispute, although Iran is unlikely to agree 

to anything until it has fully explored its sector of 

the Sea, which may (or may not) contain significant 

quantities of oil and gas. As discussed earlier, the continuing lack of consensus between the Caspian Five 

about the Sea’s legal status impacts upon maritime 

navigation, environmental protection, development 

of hydrocarbon potential, and the construction of 

new pipelines.

The Caspian littoral states have long recognized 

the need to develop infrastructure to transport their 

resources to international markets without relying 

on any one country, leading to investment in new 

pipelines such as the BTC, as well as the KCTS. But 

these projects have been fraught with geopolitical 

significance and have irritated Russia, who has been 

bypassed. This has eroded its influence over pipelines 

and export infrastructure in the Caspian Basin over 

the past decade, which has had both an economic and 

political impact: Moscow has lost out on revenue from 

transit tariffs, but has also seen its political dominance 

undermined. Nevertheless, the United States and its 

allies should continue to encourage the development 

of hydrocarbon transit infrastructure that circumvents 

Russian territory—Moscow already has far too much 

influence over oil and gas exports from the region, 

undermining the political and economic autonomy of 

states, particularly Kazakhstan and Azerbaijan. While 

these two states have so far managed to balance successfully their relations with Moscow and the West, 

their growing economic might will attract greater 

regional and international interest. They will need to 

upgrade their naval capabilities to be able to protect 

their economic interests and sea lines of communica-
64

tion in the Caspian and demonstrate intent. By contrast, Russia and Iran appear to be seeking to use their 

expanding naval capabilities to maintain the status 

quo in the Caspian Sea region, which is to their own 

advantage, and deter other littoral states from developing effective relationships with external actors. This 

desire to limit the influence and presence of external 

actors, especially the United States, and ensure their 

own dominance in the region undermines the sovereignty of the other littoral states and their ability to 

pursue an autonomous foreign policy. This desire also 

has significant implications for states outside the region, such as the United States, who wish to deepen 

their engagement with, and influence on, the Caspian 

states. Russian-Iranian relations in the Caspian Sea region will likely provide an indicator of the direction 

of broader relations between the two and should be 

monitored, since their burgeoning cooperation currently is being developed merely for mutual convenience, the establishment of a strategic partnership 

or alliance could be detrimental for U.S. influence in 

the future.

Despite bilateral cooperation, the Caspian Five 

have so far failed to establish any effective form of collective security system, and the region’s security architecture is very weak. There have been some attempts 

to establish multilateral cooperation, but little has 

been achieved other than political declarations. The 

United States should encourage the development of 

some form of regional security system in the Caspian 

Sea area, to ensure that the littoral states take responsibility for regional security without the involvement 

of external actors. A collective security arrangement 

involving all five littoral states would also hinder any 

one regional state from becoming too dominant. The 
65

development of scientific, technical, and academic 

links with the region should be fostered, particularly 

in the areas of maritime environmental protection, the 

mitigation and management of oil spills and fisheries 

management.

The Caspian region is part of Russia’s “southern 

underbelly,” a term that underscores the sense of vulnerability it feels along its southern border—an area 

that is vital for Russian national security—both in 

terms of its natural resources and as a source of an 

array of security challenges. Moscow considers the 

broader Caspian region to be a sphere of its exclusive influence and has sought to counterbalance the 

growing involvement of other actors in the region, 

which has led to rising tension between Russia and 

its southern neighbors. While it is concerned about 

nontraditional security threats, Russia is also seeking 

to remain the predominant power in the Caspian Sea 

region. The upgrade of the Flotilla’s capabilities is a 

visible signal of intent that Russia is unwilling to cede 

any further influence and intends to remain the predominant power in the Caspian Sea region.
66

BIBLIOGRAPHY

Akiner, Shirin (ed.), The Caspian: Politics, Energy and Security,

Abingdon, UK: RoutledgeCurzon, 2004.

ANS TV, Baku, 1600GMT, August 8, 2003, BBC Monitoring 

Select Middle East, August 15, 2003, p. 3.

Azernews, “Work on Caspian Sea draft convention progressing,” November 25, 2013, available from www.azernews.az/azerbaijan/61886.html.

Barabanov, Mikhail, A New Fleet for Russia—An Independent Vision,” The Journal of Slavic Military Studies, Vol. 24, No. 1, 

2011, pp. 81-87.

Binnie, Jeremy, “All at sea: Iran threatens military moves into 

the Caspian,” Jane’s Intelligence Review, September 24, 2012.

Bisenbaev, Asyilbek, Nye vmeste: Rossiya i stranyi Tsentralnoi 

Azii (Not together: Russia and the Central Asian states), Moscow,

Russia: Piter, 2011.

BP Statistical Review of World Energy, June 2013, available from 

www.bp.com.

Brilev, Sergei, “Sergei Shoigu: nasha armiya dolzhna ponyat,” 

na chto sposobna,” (“Sergei Shoigu: Our Army Needs to Understand What Is Possible”), Vesti, November 9, 2013 available from 

www.vesti.ru/doc.html?id=1152052. 

The Constitution of the Republic of Azerbaijan, adopted November 12, 1995, by popular referendum, available from en.president.

az/azerbaijan/constitution/.

“Caspian Guard,” available from www.globalsecurity.org/

military/ops/caspian-guard.htm.

Dunai, Peter, “Russia delays bulk of new armament spend 

until 2016, Jane’s Defence Weekly, October 8, 2012.
67

Emirov, RM, Prioritetyi natsional”noi bezopastnosti Rossiiskoi Federatsii na Severnom Kavkaze (The Russian Federation’s National Security Priorities in the North Caucasus), Moscow, Russia: 

Logos, 2011.

EU Energy Security and Solidarity Action Plan: Second Strategic 

Energy Review, European Commission, Directorate-General for 

Energy and Transport, Brussels, 2008, available from ec.europa.eu/

energy/strategies/2008/2008_11_ser2_en.htm.

Fish, Tim, “Russian navy to axe half its ships by 2016,” Jane’s 

Navy International, March 6, 2009.

The Foreign Policy Concept of the Russian Federation, Approved 

by Dmitry Medvedev, President of the Russian Federation on 

July 12, 2008, available from www.mid.ru/ns-osndoc.nsf/1e5f0de2

8fe77fdcc32575d900298676/869c9d2b87ad8014c32575d9002b1c38?

OpenDocument. 

The Foreign Policy Concept of the Russian Federation, Approved 

by Vladimir Putin, President of the Russian Federation on February 12, 2013, available from www.mid.ru/bdomp/ns-osndoc.nsf/1e5f

0de28fe77fdcc32575d900298676/869c9d2b87ad8014c32575d9002b1c3

8!OpenDocument. 

Gordeyev, Mariya, “China buys in giant Kazakh oilfield for 

$5 billion,” September 7, 2013.

Gyürösi, Miroslav, “Kazakhstan studies Exocet as coastal defence weapon,” Jane’s Missiles & Rockets, September 3, 2012.

Hafizoglu, Rufiz, “Azerbaijani Energy Ministry announces transit volumes of Kazakh oil for 2014,” Trend news agency, 

December 2, 2013, available from en.trend.az/capital/energy/

2217306.html.

Harmer, Christopher, “Iranian Naval and Maritime Strategy,” Middle East Security Report 12, Washington, DC: Institute for 

the Study of War, June 2013.
68

Interfax-AVN military news agency, Moscow, 0701GMT, September 25, 2012, BBC Monitoring.

Interfax-AVN military news agency, Moscow, 1339GMT, September 17, 2012, BBC Monitoring.

Interfax-AVN military news agency, Moscow, 1026GMT, October 3, 2012, BBC Monitoring.

Interfax-AVN military news agency, Moscow, 1305GMT, November 6, 2012, BBC Monitoring.

Ivlent'eva, T, “V gosudarstvennoy morskoy inspektsii. 

Brakon”yry ozloblyayutsya i vooruzhayutsya” (“State Maritime 

Inspectorate: Poachers Resentful and Arming Themselves”), 

Kaspiets, April 11, 2002, BBC Monitoring.

Ivanov, Andrei and Shulman, Aleksandr, “Will Hamas come 

to the Caucasus?” Svpressa.ru, November 19, 2012, available from

www.svpressa.ru/war21/article/60975/.

Izvestiya, March 31, 2008, online version available from www.

izvestiya.ru. 

Jacobs, Keith, “Russian Navy Quo Vadis?” Naval Forces, Vol. 

3, 2009, pp. 56-63.

Jane’s Foreign Report (online version), “Striking energy gold in 

the Caspian,” December 15, 2008.

Jane’s Islamic Affairs Analyst, “Looking to 2020: Azerbaijan’s 

military aspirations,” April 23, 2008.

Janusz, Barbara, The Caspian Sea Legal Status and Regime Problems, Briefing Paper, REP BP 05/02, London, UK: The Royal Institute of International Affairs, August 2005.

Kapitanets, IM, Voina na more: aktual’nyie problemyi razvitiya voenno-morskoi nauki (War at Sea: Pressing Problems with the 

Development of Maritime Theory) Moscow, Russia: VAGRIUS, 2001.
69

Karami, Jahangir, “The Collective Security System in the 

Caspian Sea. Opportunities, restrictions and future perspective,” 

Caspian Factor, Institute for Caspian Cooperation, May 30, 2013.

Karimi, Nasser, “Jamaran-2, Iran Destroyer, Launched In 

the Caspian Sea,” Huffington Post, March 17, 2013, available from 

www.huffingtonpost.com/2013/03/17/jamaran-2-destroyer-iran-caspian-sea_n_2895553.html. 

Kaspiyets, Astrakhan,September 28, 2012, BBC Monitoring.

Keneş, Bülent, “We must stop seeing Azerbaijan purely as a 

source of oil and natural gas,” Today’s Zaman, October 4, 2012, 

available from www.todayszaman.com/columnist/bulent-kenes-294

312-we-must-stop-seeing-azerbaijan-purely-as-a-source-of-oil-andnatural-gas.html.

Khramchikhin, Aleksandr, “‘Tsentr’priblizilsya k okrainam” 

(“‘Centre’ Closer to Regions”), Nezavisimoye Voyennoye Obozreniye, 7.10.11, available from nvo.ng.ru/maneuvers/2011-10-07/1_

center.html.

Konyrova, Kulpash, “Kazakhstan Caspian Transport System 

Project Postponed,” June 27, 2010, New Europe Online, available 

from www.neurope.eu/article/kazakhstan-caspian-transport-systemproject-postponed. 

Kucera, Joshua, “Kazakhstan unveils “first” home-grown 

patrol ship,” Jane’s Navy International, April 20, 2012.

Kucera, Josh, “Turkmenistan: Ashgabat Quietly Builds Up 

Caspian Military Might,” Eurasianet.org, July 5, 2012, available 

from www.eurasianet.org/node/65633. 

Kuzin, VP and Nikolskii, VI, Voenno-morskoi flot SSSR 1945-

1991 (The Soviet Navy 1945-1991), St Petersburg, Russia: Istorischeskoye Morskoye Obshchestvo, 1996.

Laruelle, Marlene and Peyrouse, Sebastien, “The Militarisation of the Caspian Sea: ‘Great Games’ and ‘Small Games’ over 

the Caspian Fleets,” China and Eurasia Forum Quarterly, Vol. 7, No. 

2, 2009, pp. 17-35.
70

Main, Dr. Steven J., The Bear, the Peacock, the Eagle, the Sturgeon and the Black, Black Oil: Contemporary Regional Power Politics in 

the Caspian Sea, Caucasus Series 05/67, Shrivenham, UK: Conflict 

Studies Research Centre, December 2005.

Makovskiy, AA and Radchenko, BM, Kaspiyskaya krasnoznamennaya (The Red Banner in the Caspian), Moscow, Russia: Voenizdat, 1982.

Malashenko, Aleksei, Tsentralnaya Asiya: na shto rasschityivaet 

Rossiya? (Central Asia and Russia’s Expectations), Moscow, Russia: 

Tsentr Carnegie, 2012.

Malyisheva, Dina, “Vyivod voisk mezhdunarodnoi koalitsii 

iz Afghanistana i Tsentralnaya Aziya” (“The Withdrawal of International Coalition Troops from Afghanistan and Central Asia”),

Otsenki i idei, Vol. 1, No. 2, Moscow, Russia: Institute Vostokovedeniya RAN, August 2012.

Maruev, A. Iu and Karpenko, A. O., “Voenno-politicheskie aspekty formirovaniia interesov Rossii na yuzhnom geopoliticheskom vektore” (“Military-Political Aspects of the Formation of 

Russia’s Interests in the Southern Geopolitical Vector”), Voennaya 

Mysl,” No. 11, November 2009, pp. 9-16.

Mazumdar, Mrityunjoy, “Turkmenistan acquires Its first surface combatants,” Jane’s Navy International, September 30, 2011.

McDermott, Roger, “Kazakhstan-Russia: enduring Eurasian 

defence partners,” Danish Institute for International Studies Report, Copenhagen, Denmark: Institute for International Studies, 

2012, p. 15.

Mehr News Agency, Tehran, 0510GMT, March 13, 2010, BBC 

Monitoring.

The Military Doctrine of the Republic of Kazakhstan, Presidential 

Decree, No. 161, October 11, 2001. 
71

The Military Doctrine of the Russian Federation, approved by 

decree of the President of the Russian Federation on February 5, 

2010, available from www.scrf.gov.ru/documents/33.html.

Ministerstvo oboronyi Rossiiskoi Federatsii (The Ministry 

of Defense of the Russian Federation), “Na Kaspiiskoi flotillii 

formiruyot ekipazhi dlya noveishikh malyikh raketnyikh korablei” (“Crews Assembled for Caspian Flotilla’s New Small 

Rocket Ships”), November 1, 2012, available from function.mil.ru/

news_page/country/more.htm?id=11438895@egNews.

Ministerstvo oboronyi Rossiiskoi Federatsii, “Kaspiiskaya 

flotiliya: istoriya” (“The Caspian Flotilla: A History”), available 

from structure.mil.ru/structure/forces/type/navy/kasp/history.htm. 

Ministerstvo oboronyi Rossiiskoi Federatsii, “Moryaki Kaspiiskoi flotilii ostaivayut noviy mnogotselevoi korabl” (“Caspian 

Flotilla Sailors Acquaint Themselves with New Multirole Ships”), 

August 2, 2013, available from function.mil.ru/news_page/country/

more.htm?id=11810634@egNews.

Ministerstvo oboronyi Rossiiskoi Federatsii, “Korabli Kaspiiskoi flotilii v khode ucheniya proveli vstrechnyi morskoi boi” 

(“Caspian Flotilla Ships Conduct Sea Battle during Exercises”), 

August 16, 2013, available from function.mil.ru/news_page/country/

more.htm?id=11820011@egNews. 

Morskaya doktrina Rossiiskoi Federatsii na period do 2020 goda

(Maritime Doctrine of the Russian Federation for the Period until 2020), 

approved by Vladimir Putin, President of the Russian Federation 

on July 27, 2001, available from www.scrf.gov.ru/documents/34.html.

“Russia may resume sturgeon fishing,” The Moscow Times, 

July 6, 2012, available from www.themoscowtimes.com/special/

environment/eng/russia-may-resume-sturgeon-fishing.html.

Mukhtarov, D., “Kazakh and Russian border guards join 

in fight against Caspian Sea poachers,” October 11, 2013, Trend 

News Agency, available from en.trend.az/regions/casia/kazakhstan/

2200390.html.
72

Murphy, Daniel T, “Russia’s world turned upside down,” US 

Naval Institute Proceedings, May 2012, Vol. 138, Issue 5, pp. 54-59.

National Security Strategy of the Russian Federation, approved 

by decree of the President of the Russian Federation, May 12, 

2009, available from www.scrf.gov.ru/documents/1/99.html.

Nekhai, Oleg, “Caspian Sea stocks to be restored,” Voice 

of Russia Radio, May 3, 2013, available from voiceofrussia.

com/2013_05_03/Caspian-Sea-sturgeon-stocks-to-be-restored/. 

Nezavisimaya Gazeta, August 16, 1997.

Nezavisimaya Gazeta, November 22, 2011, available from www.

ng.ru/economics/2011-11-22/1_kaspiy.html.

Oldberg, Ingmar, The Russian Navy facing the 21st century: 

proceedings of a conference in Stockholm, December 2, 1996, Stockholm, Sweden: Swedish Defense Research Establishment, Defense Research Establishment, 1997.

Orujova, Nigar, “First sturgeon farm to open in Azerbaijan,” 

Azernews, November 7, 2013, available from www.azernews.az/

azerbaijan/61392.html.

Orujova, Nigar, “Azerbaijan to build warships in 2014,” 

Azernews, November 12, 2013, available from www.azernews.az/

azerbaijan/61533.html.

Panfilova, Viktoriya, “Na Kaspii sozdayetsya voenno-morskaya baza SShA” (“USA to Establish Naval Base on Caspian”), April 29, 2013, available from www.ng.ru/cis/2013-04-29/6_

kaspiy.html.

Pannier, Bruce, “Caspian dispute casts shadow over Nabucco,” Asia Times Online, July 30, 2009, available from www.atimes.

com/atimes/Central_Asia/KG30Ag01.html.

Patsuria, Nino, “Kazakh oil secures BTC volumes,” Georgia 

News, November 7, 2013.
73

Pivovar, EI, Rossiisko-azerbaidzhanskie otnosheniya: konets XXnachalo XXI veka (Russian-Azerbaijani Relations from the End of the 

20th to the Beginning of the 21st Centuries), Moscow, Russia: Kremlin Multimedia, 2012.

Press TV, “Iran launches indigenous Jamaran 2 destroyer in 

Caspian Sea,” March 17, 2013, available from www.presstv.com/

detail/2013/03/17/294010/iran-launches-jamaran-2-destroyer/.

Press TV, “Iranian naval group docked in Astrakhan carries message of peace, envoy says,” June 28, 2013, available from 

www.presstv.com/detail/2013/06/28/311292/iran-naval-group-carriesmessage-of-peace/. 

Putin, Vladimir, Speech by the President of the Russian Federation, “Komandno-shtabnyie ucheniye ‘Kavkaz-2012’” (“Command Post Exercise ‘Kavkaz-2012’”), 17.9.11, available from 

kremlin.ru/transcripts/16492.

Putin, Vladimir, “Presidential Address to the Federal Assembly,” December 12, 2013, available from eng.kremlin.ru/news/6402.

Radio Free Europe Radio Liberty, “Turkmenistan Plans Caspian Naval Base,” August 31, 2009, available from www.rferl.org/

content/Turkmenistan_Plans_Caspian_Naval_Base/1811441.html.

Radio Free Europe Radio Liberty, “Kazakh Border Guards 

Kill Suspected Russian Poacher,” November 26, 2013, available 

from 2013.

Reuters news agency, “Kazakh head reshuffles oil officials after 

Kashagan delays,” July 3, 2013.

RIA Novosti, “Caspian states adopt declaration on repelling aggressors,” October 16, 2007, available from en.rian.ru/

world/20071016/84185487.html.

RIA Novosti, “Putin kicks off oil project on Caspian Sea” April 

28, 2010.

RIA Novosti, “New Russian Missile Boat Starts Caspian Trials,” August 6, 2013, available from rusnavy.com/news/newsofday/

index.php?ELEMENT_ID=17033.
74

Rossiskaya Gazeta, Moscow, Russia, 0850GMT, August 30, 

2012, BBC Monitoring.

Rusnavy.com, “New Super-Frigate to Protect Caspian 

Sea,” June 8, 2012, available from rusnavy.com/news/navy/index.

php?ELEMENT_ID=15315.

Russia Today, “Iran claims $50bln oil field found in Caspian 

Sea,” July 16, 2012, available from rt.com/business/iran-claimsvast-oil-field-found-in-caspian-sea-302/.

Sadykov, Murat, “Russia Concerned About Caspian Ecosystem, When Expedient,” Eurasianet.org, November 26, 2013, available from www.eurasianet.org/node/67800.

Saivetz, Carol R., “Putin’s Caspian Policy,” Policy Brief, Caspian Studies Program, October 2000, Cambridge, MA: John F. 

Kennedy School of Government, Belfer Center for Science and 

International Affairs, available from belfercenter.hks.harvard.edu/

publication/3101/putins_caspian_policy.html.

Shakleina, T. A., Rossiya i SShA v mirovoi politike (Russia and the 

USA in Global Politics), Moscow, Russia: Aspekt Press, 2012.

Tehran Times, “Iran’s oil deposits in Caspian Sea worth over 

$50bn,” July 9, 2012, available from tehrantimes.com/economy-andbusiness/99479-irans-oil-deposits-in-caspian-sea-worth-over-50b.

Tringham, Kate, “Almaz launches third Buyan-class gunboat,” Jane’s Navy International, May 2, 2012.

“Turkmenistan: Naval Forces,” available from www.

globalsecurity.org/military/world/centralasia/turkmen-navy.htm. 

Today.az, “EU satisfied with auspicious conditions for TransCaspian Gas Pipeline conclusion,” November 20, 2013, available 

from www.today.az/news/business/128353.html.

Uc Noqta, Baku, June 19, 2003, Select Central Asian and Transcaucasus, BBC Monitoring, June 19, 2003, p. 21.
75

U.S. Department of State, Office of the Coordinator for 

Counterterrorism, “Chapter 2. Country Reports: Europe and 

Eurasia Overview,” Country Reports on Terrorism 2011, Washington, DC: U.S. Department of State, July 31, 2012, available from 

www.state.gov/j/ct/rls/crt/2011/195543.htm.

U.S. Energy Information Administration, “Kazakhstan 

Country Analysis Brief,” Washington, DC: U.S. Energy Information Administration, available from www.eia.gov/countries/cab.

cfm?fips=KZ.

U.S. Energy Information Administration, “Turkmenistan 

Country Analysis Brief,” Washington, DC: U.S. Energy Information Administration, available from www.eia.gov/countries/cab.

cfm?fips=TX. 

Ustinov, Evgenii, “Bioterrorizm: mesto deystviy – Kaspiy” 

(“Bioterrorism in Action in the Caspian), Krasnaya Zvezda, June 

25, 2004. 

Voyennyy Vestnik Yuga Rossii (Military Bulletin of Southern 

Russia), Rostov-na-Donu, September 29, 2012, BBC Monitoring.

Zhil’tsov, SS, Zoni, IS, and Ushkov, AM, Geopolitika 

kaspiiskogo regiona (The Geopolitics of the Caspian Region), Moscow, 

Russia: mezhdunarodnayie otnosheniya, 2003.

Zvezda TV, Moscow, 1800GMT, October 24, 2012, BBC 

Monitoring.

INTERVIEWS

Interviews and informal conversations were conducted with 

representatives of the following institutions in Moscow, Russia, 

and Astana and Almaty (Kazakhstan).

Russia.

The Centre for Regional Problems, USA and Canada Institute 

(ISKRAN), Moscow.

The Carnegie Centre, Moscow.

The Department of Central Asia and Kazakhstan, CIS 

Institute, Moscow.
76

Kazakhstan.

The Ministry of Defense Astana.

The Centre for Military and Strategic Research, Astana.

The Kazakhstan Institute for Strategic Studies, Almaty.

ENDNOTES

1. Ministerstvo oboronyi Rossiiskoi Federatsii, “Kaspiiskaya 

flotiliya: istoriya’,” (“The Caspian Flotilla: A History”), November 1, 2012, available from structure.mil.ru/structure/forces/type/

navy/kasp/history.htm.

2. See A. Iu Maruev and A. O. Karpenko, “Voennopoliticheskie aspekty formirovaniia interesov Rossii na yuzhnom geopoliticheskom vektore” (“Military-Political Aspects of 

the Formation of Russia’s Interests in the Southern Geopolitical 

Vector”), Voennaya Mysl’, No. 11, November 2009, p. 9.

3. S. S. Zhil’tsov, I. S. Zoni, and A. M. Ushkov, Geopolitika 

kaspiiskogo regiona (The Geopolitics of the Caspian Region), Moscow, 

Russia: mezhdunarodnayie otnosheniya, 2003, p. 110.

4. Russian successes, such as the subsea Blue Stream gas pipeline, are considered to be the result of the “failure of American 

pipeline strategy in the Caucasus and Central Asia as a whole,” 

Ibid., p. 131. 

5. See www.portaktau.kz/eng/AktauPort/today/.

6. Viktoriya Panfilova, “Na Kaspii sozdayetsya voennomorskaya baza SShA” (“USA to Establish Naval Base on Caspian”), April 29, 2013, available from www.ng.ru/cis/2013-04-29/6_

kaspiy.html.

7. A. A. Makovskiy and B. M. Radchenko, Kaspiyskaya krasno-znamennaya (The Red Banner in the Caspian), Moscow, Russia: 

Voenizdat, 1982, p. 3.

8. Ibid. 
77

9. Ibid., pp. 5-6.

10. The Ottoman Empire dominated the western side of the 

contemporary South Caucasus from the 16th century until the 

early-20th century; until the beginning of the 19th century, many 

areas of the Caucasus were part of the Persian Empire.

11. Morskaya doktrina Rossiiskoi Federatsii na period do 2020 goda

(Maritime Doctrine of the Russian Federation for the Period until 2020) 

approved by Vladimir Putin, President of the Russian Federation, 

on July 27, 2001, p. 7, available from www.scrf.gov.ru/documents/

34.html.

12. Ibid., pp. 9-10.

13. Figures taken from BP Statistical Review of World Energy, 

June 2013, available from www.bp.com. Reserves-to-production 

(R/P) ratio – “if the reserves remaining at the end of any year are 

divided by the production in that year, the result is the length of 

time that those remaining reserves would last if production were 

to continue at that rate,” BP Statistical Review of World Energy, p. 6.

14. For further details, see “Kazakhstan Country Analysis 

Brief,” Washington, DC: U.S. Energy Information Administration, available from www.eia.gov/countries/cab.cfm?fips=KZ. 

15. See www.tengizchevroil.com/.

16. See www.kpo.kz/kpobv-home.html?&L=0.

17. “Kazakh head reshuffles oil officials after Kashagan delays,” Reuters news agency, July 3, 2013, available from www.

reuters.com/article/2013/07/03/oil-kazakhstan-minister-idUSL5N0F90RC20130703.

18. “Mariya Gordeyev, “China buys in giant Kazakh oilfield 

for $5 billion,” September 7, 2013, available from www.reuters.com/

article/2013/09/07/us-oil-kashagan-china-idUSBRE98606620130907.

19. Ibid. According to Kazakh president Nursultan Nazarbayev, a total of 22 agreements worth U.S.$30 billion were 
78

signed during Xi’s visit, including one to build an oil refinery in 

Kazakhstan. 

20. For further details, see BP Caspian, available from www.

bp.com/en_az/caspian.html.

21. Ibid.

22. For further details see BP Caspian, available from www.

bp.com/sectiongenericarticle.do?categoryId=9048303&content

Id=7015092. 

23. The audit, conducted by a UK consultancy firm Gaffney, 

Cline & Associates, put the best-case volume of gas at South Yolotan-Osman at six trillion cubic meters (Tcm), but said there could 

be as much as 14 Tcm. “Striking energy gold in the Caspian,” 

Jane’s Foreign Report (online version), December 15, 2008.

24. For further details, see “Turkmenistan Country Analysis 

Brief,” Washington, DC: U.S. Energy Information Administration, available from www.eia.gov/countries/cab.cfm?fips=TX.

25. See RIA Novosti, “Putin kicks off oil project on Caspian

Sea,” April 28, 2010, available from en.rian.ru/russia/

20100428/158790351.html.

26. “Iran’s oil deposits in Caspian Sea worth over $50bn,” 

Tehran Times, July 9, 2012, available from tehrantimes.com/economyand-business/99479-irans-oil-deposits-in-caspian-sea-worth-over-50b.

27. “Iran claims $50bln oil field found in Caspian Sea,” 

Russia Today, July 16, 2012, available from rt.com/business/iranclaims-vast-oil-field-found-in-caspian-sea-302/.

28. Quoted in Nezavisimaya Gazeta, August 16, 1997.

29. The first cargo of oil transported through the pipeline was 

exported from Ceyhan in June 2006.

30. Turkmenistan has exported some crude through the BTC. 

According to a report published in December 2013, to date, about 

8.6 million tons of Turkmen oil has been transported through 
79

the pipeline. Rufiz Hafizoglu, “Azerbaijani Energy Ministry announces transit volumes of Kazakh oil for 2014,” Trend News 

Agency, December 2, 2013, available from en.trend.az/capital/energy/

2217306.html.

31. Nino Patsuria, “Kazakh oil secures BTC volumes,” Georgia News, November 7, 2013, available from www.georgianews.ge/

business/25236-kazakh-oil-secures-btc-volumes.html.

32. See www.kmg.kz. 

33. Kulpash Konyrova, “Kazakhstan Caspian Transport System Project Postponed,” June 27, 2010, New Europe Online, available from www.neurope.eu/article/kazakhstan-caspian-transportsystem-project-postponed.

34. Rufiz Hafizoglu, “Azerbaijani Energy Ministry announces transit volumes of Kazakh oil for 2014,” Trend news agency, 

December 2, 2013, available from en.trend.az/capital/energy/

2217306.html.

35. Zhil’tsov et al., p. 110.

36. Ibid., p. 131. 

37. Izvestiya, 31.3.08, online version available from www.izvestiya.ru. International oil prices jumped over U.S.$1.70 per barrel because of fears of supply disruption due to the military conflict in South Ossetia. Brent crude was trading at U.S.$115.10 in 

London on August 11, 2008, up from U.S.$113.33 on August 8, 

while Nymex crude rose U.S.$1.16 to U.S.$116.36.

38. EU Energy Security and Solidarity Action Plan: Second Strategic Energy Review, European Commission, Brussels, Belgium: Directorate-General for Energy and Transport, 2008, available from 

ec.europa.eu/energy/strategies/2008/2008_11_ser2_en.htm. 

39. “EU satisfied with auspicious conditions for Trans-Caspian Gas Pipeline conclusion,” November 20, 2013, Today.az, available from www.today.az/news/business/128353.html.
80

40. Murat Sadykov, “Russia Concerned About Caspian Ecosystem, When Expedient,” Eurasianet.org, November 26, 2013, available from www.eurasianet.org/node/67800.

41. Quoted in Nezavisimaya Gazeta, November 22, 2011, available from www.ng.ru/economics/2011-11-22/1_kaspiy.html. 

42. Evgenii Ustinov, “Bioterrorizm: mesto deystviya – Kaspiy,” 

Krasnaya Zvezda (“Bioterrorism in Action in the Caspian”), June 

25, 2004, available from old.redstar.ru/2004/06/25_06/3_02.html. 

43. Including the huso and starred sturgeon. See Oleg Nekhai, 

“Caspian Sea stocks to be restored,” Voice of Russia Radio, May 

3, 2013, available from voiceofrussia.com/2013_05_03/Caspian-Seasturgeon-stocks-to-be-restored/; and Nigar Orujova, “First sturgeon 

farm to open in Azerbaijan,” Azernews, November 7, 2013, available from www.azernews.az/azerbaijan/61392.html.

44. Ibid.

45. “Russia may resume sturgeon fishing,” July 6, 2012, The 

Moscow Times, available from www.themoscowtimes.com/special/

environment/eng/russia-may-resume-sturgeon-fishing.html.

46. D. Mukhtarov, “Kazakh and Russian border guards join 

in fight against Caspian Sea poachers,” October 11, 2013, Trend 

News Agency, available from en.trend.az/regions/casia/kazakhstan/

2200390.html. 

47. “Kazakh Border Guards Kill Suspected Russian Poacher,” 

Radio Free Europe Radio Liberty, November 26, 2013, available from 

www.rferl.org/content/kazakhstan-poaching-russia/25180778.html.

48. T. Ivlent’eva, “V gosudarstvennoy morskoy inspektsii. 

Brakon’yry ozloblyayutsya i vooruzhayutsya” (“State Maritime 

Inspectorate: Poachers Resentful and Arming Themselves”),

Kaspiets, April 11, 2002; “Putin sets out vision for development of 

Caspian oil fields,” BBC Monitoring, April 25, 2002 quoted in Dr. 

Steven J. Main, The Bear, the Peacock, the Eagle, the Sturgeon and the 

Black, Black Oil: Contemporary Regional Power Politics in the Caspian 

Sea, Caucasus Series 05/67, Shrivenham, UK: Conflict Studies Research Centre, December 2005.
81

49. Quoted in EI Pivovar, Rossiisko-azerbaidzhanskie otnosheniya: konets XX-nachalo XXI veka (Russian-Azerbaijani Relations from 

the End of the 20th to the Beginning of the 21st Centuries), Moscow, 

Russia: Kremlin Multimedia, 2012, p. 131.

50. Bruce Pannier, “Caspian dispute casts shadow over Nabucco,” Asia Times Online, July 30, 2009, available from www.

atimes.com/atimes/Central_Asia/KG30Ag01.html.

51.The Constitution of the Republic of Azerbaijan, adopted November 12, 1995, by popular referendum, Article 11, para. 2, available from en.president.az/azerbaijan/constitution/. 

52. Maruev and Karpenko, p. 9.

53. Russia’s National Security Strategy to 2020, paras. 11 

and 12, 2009.

54. Ibid., para. 42.

55. Sergei Brilev, “Sergei Shoigu: nasha armiya dolzhna ponyat,” na chto sposobna,” (“Sergei Shoigu: Our Army Needs to 

Understand What Is Possible”), Vesti, November 9, 2013, available from www.vesti.ru/doc.html?id=1152052.

56. Andrei Ivanov and Aleksandr Shulman, “Khamas pridyot 

na Kavkaz?” (“Hamas in the Caucasus?”), Svpressa.ru, November 

19, 2012, available from www.svpressa.ru/war21/article/60975/.

57. Quoted in Saivetz, “Putin’s Caspian Policy.”

58. Maruev and Karpenko, p. 9.

59. Kaspiiskaya flotiliya: istoriya. 

60. Mevluk Katik, “Militarisation of the Caspian Sea,” Shirin 

Akiner, ed., The Caspian: Politics, Energy and Security, Abingdon, 

UK: RoutledgeCurzon, 2004, p. 300.

61. Tim Fish, “Russian navy to axe half its ships by 2016,” 

Jane’s Navy International, June 3, 2009.
82

62. Figures quoted in Daniel T. Murphy, “Russia’s World 

Turned Upside Down,” U.S. Naval Institute Proceedings, May 2012, 

Vol. 138, Issue 5, pp. 54-59. This is a significant amount, relying on 

continuing high oil and gas prices.

63. Peter Dunai, “Russia delays bulk of new armament spend 

until 2016,” Jane’s Defence Weekly, October 8, 2012.

64. “New Super-Frigate to Protect Caspian Sea,” June 8, 2012, 

available from rusnavy.com/news/navy/index.php?ELEMENT_ID=

15315.

65. Report on Zvezda TV, controlled by the Russian Ministry 

of Defense, BBC Monitoring, Zvezda TV, Moscow, 1800GMT,

 October 24, 2012. 

66. Kate Tringham, “Almaz launches third Buyan-class gunboat,” Jane’s Navy International, May 2, 2012.

67. BBC Monitoring, Rossiskaya Gazeta website, Moscow, 

0850GMT, October 30, 2012. 

68. Ministerstvo oboronyi Rossiiskoi Federatsii, “Na Kaspiiskoi flotillii formiruyot ekipazhi dlya noveishikh malyikh raketnyikh korablei” (‘Crews Assembled for Caspian Flotilla’s New 

Small Rocket Ships”), November 1, 2012, available from function.

mil.ru/news_page/country/more.htm?id=11438895@egNews.

69. Ministerstvo oboronyi Rossiiskoi Federatsii, “Moryaki 

Kaspiiskoi flotilii ostaivayut noviy mnogotselevoi korabl” (“Caspian Flotilla Sailors Acquaint Themselves with New Multirole 

Ships”), August 2, 2013, pp. 13-34, available from function.mil.ru/

news_page/country/more.htm?id=11438895@egNews.

70. BBC Monitoring, Interfax-AVN military news agency, 

Moscow, 1305GMT, November 6, 2012.

71. BBC Monitoring, Voyennyy Vestnik Yuga Rossii (Military 

Bulletin of Southern Russia), Rostov-na-Donu, September 29, 2012.

72. “New Russian Missile Boat Starts Caspian Trials,” RIA Novosti, August 6, 2013, available from rusnavy.com/news/newsofday/

index.php?ELEMENT_ID=17033.
83

73. BBC Monitoring, Kaspiyets, Astrakhan, September 28, 2012.

74. BBC Monitoring, Interfax-AVN military news agency, 

Moscow, 0701GMT, September 25, 2012.

75. BBC Monitoring, Interfax-AVN military news agency, 

Moscow, 1339GMT, September 17, 2012.

76. Speech by the President of the Russian Federation Vladimir Putin, “Komandno-shtabnyie ucheniye ‘Kavkaz-2012’” 

(“Command Post Exercise ‘Kavkaz-2012’”), September 17, 2011, 

available from kremlin.ru/transcripts/16492.

77. Russian Ministry of Defence website, “Korabli Kaspiiskoi 

flotilii v khode ucheniya proveli vstrechnyi morskoi boi” (“Caspian Flotilla Ships Conduct Sea Battle during Exercises”), August 

16, 2013, (12:02), available from function.mil.ru/news_page/country/

more.htm?id=11820011@egNews.

78. Mikhail Barabanov, “A New Fleet for Russia-An Independent Vision,” The Journal of Slavic Military Studies, Vol. 24, No. 1, 

2011, p. 84.

79. Aleksandr Khramchikhin, “‘Tsentr’ priblizilsya k 

okrainam” (“’Centre’ Closer to Regions”), Nezavisimoye Voyennoye Obozreniye, July 10, 2011.

80. Ibid.

81. Military Doctrine of the Republic of Kazakhstan, President 

Decree, No. 161, October 11, 2001, available from www.mod.gov.

kz/mod-en/index.php/2009-06-26-02-25-27.

82. Quoted in Roger McDermott, “Kazakhstan-Russia: enduring Eurasian defence partners,” Danish Institute for International 

Studies Report, 15, Copenhagen, Denmark: Danish Institute for International Studies, 2012, p. 24.

83. Joshua Kucera, “Kazakhstan unveils ‘first’ home-grown 

patrol ship,” Jane’s Navy International, April 20, 2012.
84

84. Ibid.

85. Miroslav Gyürösi, “Kazakhstan studies Exocet as coastal 

defence weapon,” Jane’s Missiles & Rockets, September 3, 2012.

86. Nigar Orujova, “Azerbaijan to build warships in 2014,” 

Azernews, November 12, 2013, available from www.azernews.az/

azerbaijan/61533.html.

87. For further details, see “Caspian Guard,” available from 

www.globalsecurity.org/military/ops/caspian-guard.htm.

88. The 2003 Goplat exercises involved 18 U.S. servicemen 

and 45 Azeris, together with two Mi-8 helicopters and two coastguard boats, seeking to protect oil and gas platforms. See BBC 

Monitoring Select Central Asia and Transcaucasus, June 19, 2003, 

p. 21; Uc Noqta, Baku, June 19, 2003, p. 3. 

89. Spokesman Ezzatollah Jalali said the involvement of other 

countries posed a threat not only to Iran, but to the region as a 

whole. Azerbaijan responded by stating that the exercises were 

not directed against any country and that, as an independent 

sovereign country, it had the right to pursue its own policy. BBC 

Monitoring Select Middle East, August 15, 2003, p. 3; ANS TV, 

Baku, 1600GMT, August 14, 2003.

90. Jeremy Binnie, “All at sea: Iran threatens military moves 

into the Caspian,” Jane’s Intelligence Review, September 24, 2012.

91. Office of the Coordinator for Counterterrorism, “Chapter 

2. Country Reports: Europe and Eurasia Overview,” Washington, DC: Country Reports on Terrorism 2011, U.S. Department of 

State, July 31, 2012, available from www.state.gov/j/ct/rls/crt/2011/

195543.htm. 

92. “Looking to 2020: Azerbaijan’s military aspirations,” Jane’s 

Islamic Affairs Analyst, April 23, 2008.

93. Bülent Keneş, “We must stop seeing Azerbaijan purely as 

a source of oil and natural gas,” October 4, 2012. 
85

94. “Turkmenistan: Naval Forces,” available from www.

globalsecurity.org/military/world/centralasia/turkmen-navy.htm.

95. Josh Kucera, “Turkmenistan: Ashgabat Quietly Builds Up 

Caspian Military Might,” Eurasianet.org, July 5, 2012, available 

from www.eurasianet.org/node/65633.

96. Mrityunjoy Mazumdar, “Turkmenistan acquires its first 

surface combatants,” Jane’s Navy International, September 30, 2011.

97. “Turkmenistan Plans Caspian Naval Base,” Radio Free Europe Radio Liberty, August 31, 2009, available from www.rferl.org/

content/Turkmenistan_Plans_Caspian_Naval_Base/1811441.html.

98. Ibid.

99. Marlene Laruelle and Sebastien Peyrouse, “The Militarisation of the Caspian Sea: ‘Great Games’ and ‘Small Games’ over the 

Caspian Fleets,” China and Eurasia Forum Quarterly, Vol. 7, No. 2, 

2009, p. 25.

100. Binnie.

101. Nasser Karimi, “Jamaran-2, Iran Destroyer, Launched 

In The Caspian Sea,” Huffington Post, March 17, 2013, available 

from www.huffingtonpost.com/2013/03/17/jamaran-2-destroyer-irancaspian-sea_n_2895553.html.

102. “Iran launches indigenous Jamaran 2 destroyer in Caspian Sea,” March 17, 2013, available from www.presstv.com/

detail/2013/03/17/294010/iran-launches-jamaran-2-destroyer/.

103. Christopher Harmer, “Iranian Naval and Maritime Strategy,” Middle East Security Report 12, Washington, DC: Institute for 

the Study of War, June 2013, p. 16.

104. Ibid.

105. Binnie. 

106. BBC Monitoring, Interfax-AVN military news agency, 

Moscow, Russia, 1305GMT, November 6, 2012.
86

107. “Iranian naval group docked in Astrakhan carries message of peace, envoy says,” PressTV, June 28, 2013, available from 

www.presstv.com/detail/2013/06/28/311292/iran-naval-group-carriesmessage-of-peace/. The Iranian port call to Astrakhan followed the 

docking of a Russian naval group (which included the Admiral 

Panteleyev, an anti-submarine destroyer, and two logistic battleships, the Peresvet and the Admiral Nevelskoi, with a combined 

crew of 712) at the southern Iranian port of Bandar Abbas in 

April 2013.

108. Vladimir Putin, “Presidential Address to the Federal 

Assembly,” December 12, 2013, available from eng.kremlin.ru/

news/6402.

109. Jahangir Karami, “The Collective Security System in the 

Caspian Sea. Opportunities, Restrictions and Future Perspective,” 

Caspian Factor, London, UK: Institute for Caspian Cooperation, 

May 30, 2013. 

110. Quoted in Pivovar, p. 137.

111. “Work on Caspian Sea Draft Convention Progressing,” 

Azernews, November 25, 2013, available from www.azernews.az/

azerbaijan/61886.html.

112. Ibid.

113. Karami.

114. “Caspian states adopt declaration on repelling aggressors,” RIA Novosti, October 16, 2007, available from en.rian.ru/

world/20071016/84185487.html.

115. Ibid.

116. Ibid.

117. Panfilova.

118. Ibid.
87

119. Ibid.

120. The CSTO collective peacekeeping force was established 

in 2007 and entered into force in 2009 with a total of 4,000 personnel. BBC Monitoring, Interfax-AVN military news agency, Moscow, Russia, 1026GMT, October 3, 2012.
U.S. ARMY WAR COLLEGE

Major General William E. Rapp

Commandant

*****

STRATEGIC STUDIES INSTITUTE

and

U.S. ARMY WAR COLLEGE PRESS

Director

Professor Douglas C. Lovelace, Jr.

Director of Research

Dr. Steven K. Metz

Author

Dr. Tracey German

Editor for Production

Dr. James G. Pierce

Publications Assistant

Ms. Rita A. Rummel

*****

Composition

Mrs. Jennifer E. Nevil