US News and World Report - May 10, 1999
The big game gets bigger BY MORTIMER B. ZUCKERMAN / EDITOR-IN-CHIEF
Russia will gain wealth and influence if it controls Caspian Sea oil
Russia was never as strong as it once looked, but it is not as weak as it now seems. It is unable to challenge NATO in the west or China in the east. Its economic malaise has constrained the Kremlin's response to NATO's bombing in Serbia. But in southern Eurasia, off the political radar of the West, Russia is making much of its limited resources in a region of weaker states where it still retains influence and remains welcome. We had all better wake up to the dangers or one day the certainties on which we base our prosperity will be certainties no more.
The region of Russia's prominence - the bridge between Asia and Europe to the east of Turkey - contains a prize of such potential in the oil and gas riches of the Caspian Sea, valued at up to $4 trillion, as to be able to give Russia both wealth and strategic opportunity.
Nightmare scenarios. The competition for dominance in the Caspian will be the 21st-century version of the 19th-century covert duel between the Russian and British empires for control of Central Asia, and thus India, that Rudyard Kipling romanticized as "the great game." Call this one "the biggest game," because it has worldwide, and not just regional, consequences. Russia, providing the nuclear umbrella for a new oil consortium including Iran and Iraq, might well be able to move energy prices higher, enough to strengthen producers and menace the West, Turkey, Israel, and Saudi Arabia. In the words of Paul Michael Wihbey, in an excellent analysis for the Institute for Advanced Strategic and Political Studies, the "nightmare scenarios of the mid-1970s would reappear with a vengeance."
The key question is how the oil would reach world markets. The Caspian, a body of water twice the size of Oklahoma, is a landlocked sea embraced by Russia and a group of former Soviet republics–Azerbaijan, Georgia, Armenia, Kazakhstan, and Turkmenistan. Right now there are two pipelines pumping oil, one from Baku, Azerbaijan, via Russia to Novorossiysk on the Russian Black Sea, and another through Georgia's Black Sea port of Supsa. The choice of the route for the main export pipeline (MEP), which will be developed by the world's big oil companies and the participating states, will decide the winner of the biggest game. There are three main options:
Russia wants pipelines laid down through its territory, so that it can profit from oil and transit revenues - and influence the way this key industrial commodity is parceled out to the West. The economic and geopolitical interests of the West require that the oil companies not build pipelines across Russian territory–and also avoid a course to the south through hostile Iran. These considerations argue for a "western" route running 1,000 miles from Baku through independent Georgia to the Turkish port of Ceyhan on the Mediterranean. This is the option favored by the Clinton administration. Right now, the oil companies are expected to provide the development and financing. But the western route is costly, and Russia is stacking the deck by not too subtly emphasizing to investors the menace of the region.
Of course, if Iran were friendly, financing would be forthcoming for a pipeline across Iran to the Straits of Hormuz, from which the oil could be easily exported to the world. A friendly Iran would also enable the West to project military force to the shores of the Caspian Sea and shore up the former Soviet republics as potentially stable governments independent of Russian pressure.
Little wonder Moscow is so solicitous of its relationship with Tehran and anxious to drive any wedge it can find between Iran and the United States. That is the real purpose of Russia's willingness to engage in the dirty business of providing Iran with the know-how and personnel to build nuclear plants and ballistic missiles; it is supplying high-grade alloys to reduce the weight of Iranian Shihab missiles, as well as technology that enables Iranian missiles to carry bacterial agents and evade antimissile defenses. There are about 10,000 Russian technicians working in Iran, and Iranians are studying rocket construction at institutes in and around Moscow. Dealing with Iran is tricky for anyone, but Russia exploits the fact that for the last 20 years Iran has seen America as the great Satan and Russia as a steadfast ally. The Iranians are not allowed to forget that Russia financed the anti-shah revolution and trained its foot soldiers, as well as many of its current leaders.
Russia's other ploy in the biggest game is to put pressure on Azerbaijan, a country of 7.9 million, roughly the size of Maine, and on Georgia, in order to deter a pipeline through Georgia to Turkey. The attempt to appease Russia by offering production-sharing deals, through its oil companies, has not seemed adequate to assuage Russia's ambitions. It is playing for higher stakes.
The Russian technique being demonstrated is straight out of Al Capone: generate threats to induce the victim to ask for protection. This is why Russia has been giving military help to Armenia, Azerbaijan's neighbor and enemy. The aid includes missiles with a range sufficient to threaten Azerbaijan's oil fields, along with $2 billion in arms and T-72 tanks, supplemented by Russian troops. Azerbaijan faces an estimated 12,000-to-15,000 Russian troops in both Georgia and Armenia, along with ground and naval bases. The buildup is also a message to the West, to discourage the notion that we might try to rescue any of the beleaguered former Soviet states from a possible Russian squeeze play.
New energy cartel. The immediate Russian objective is control of the main pipelines. But Wihbey makes a convincing case that the larger objective is to join Iran with Russia's other undemocratic friends in the region, including Iraq and Syria. This new alliance would pressure Saudi Arabia to join a new energy cartel, led by Russia. Iraq and Saddam Hussein have been diplomatic and military beneficiaries of Russian intrigue. Russia is also reaching out to its former ally, Syria, as well as to the Palestinians, while Russian Prime Minister Yevgeni Primakov continues to stonewall Western and Israeli officials when confronted with intelligence on Russia's assistance for Iraq's outlawed nuclear and ballistic-missile programs.
Russia's efforts are beginning to bear fruit. Despite previous hostilities, Saddam has now welcomed Iranian Shiites to Shiite holy sites and discussions are going on about terminating the state of conflict between Iraq and Iran. Even Saudi Arabia has seemed willing to compromise with Iran. In the recent OPEC production cutbacks, Saudi Arabia gave Iran a bonus by agreeing it could "cut" from an artificially high base. Now Iran's President Mohammad Khatami and Saudi Arabia's Crown Prince Abdullah are cozying up to each other. Khatami is invited to Saudi Arabia, the first visit to the kingdom by an Iranian president in 20 years. Meanwhile, the two countries are working out a defense cooperation agreement, and Prince Sultan, the influential Saudi defense minister, will soon visit Tehran–another 20-year first.
The specter stalking Eurasia, therefore, is Iran, Iraq, Syria, and Saudi Arabia joining in a new cartel, and even in an alliance, led by Russia, sucking in the Caspian Sea littoral countries and the remaining gulf states.
What are we doing about it?
The first and most critical strategic step is clearly for the United States to ensure that multiple pipelines will be built out of the Caspian region, including at least one main export pipeline that would go through Turkey, a crucial ally. This might involve OPEC contributing to the costs of the pipeline, supplementing the funds that can be provided both by Turkey and the private oil companies.
Congress has paid only fitful attention. The administration's leadership has been as muted and confused as it was over the Balkans. And there are persuasive voices that urge us to do nothing for fear of alienating Russia, including some in the administration who are nervous about an American commitment to bolster Turkey and the Caspian states. There is anxiety that American opposition to Russia might play into the hands of the even more undemocratic and anti-Western nationalist politicians waiting for a crisis in Moscow.
These are reasonable arguments–but make no mistake about it, the risks pale by comparison with the risks we run if Russia wins the biggest game while we sit on the sidelines.