Exactly a year ago, when Charles Michel from the European Union was heavily courting Armenia the present writer noted in an article entitled EU Expansionism in the South Caucasus:

“It seems that the EU, blocked in Ukraine after it provoked the disintegration of the Ukrainian state (in 2014), is now hell bent on expanding into the Southern Caucasus… It seems determined to probe and aggravate Russia there and undo the delicate situation, and Russian brokered armistice, that has existed since the Karabakh war. Its number one target is Armenia. Its secondary target is Georgia… Azerbaijan it pays lip service to, but it is clear that it is lined up as an “authoritarian state” in the EU sights. It is also Turkish – so persona non grata to the European Christian club. So we can see what the EU is aiming to do in providing Armenia and Pashinyan with the money to get out of his responsibilities (under the Trilateral Agreement that concluded the Karabakh War) and cause problems for the Russians in the cause of “democracy”.”

We should recall that after this was written its view was confirmed as accurate in December 2021 when the US Department of State organised a global “Summit for Democracy”. It was held under the slogan of the US President, Joseph Biden: “Democracy doesn’t happen by accident. We have to defend it, fight for it, strengthen it, renew it.” And of course every US war is fought for the cause of democracy, even though democracy has little to do with it.

Among the 150 or so states invited to the US-sponsored “Summit for Democracy” were Armenia, Georgia and Ukraine. Among the minority of states who were not invited were Hungary, Turkiye and Azerbaijan.

The World has changed fundamentally over the course of the year. The 8 year civil war in the east of Ukraine has become a bigger, wider war, and it seems, as a result of the blowback to Europe from the economic sanctions imposed on Russia, Azerbaijan has now become the main focus of Western attention in the Southern Caucasus, rather than Armenia. How war concentrates minds!

Azerbaijan’s Key Role

A very interesting article by the Indian geopolitics writer M.K. Bhadrakumar appeared in Oriental Review on 20 July 2022. It is entitled Ukraine’s Great Game Resurfaces in Transcaucasia. The article backs up much of what the present writer described in the aforementioned piece last year and brings the situation up to date.

M.K. Bhadrakumar identifies the Russian capture of the Black Sea coast of Ukraine, which has prevented British and US designs on the area coming to fruition, as a very important geopolitical event:

“The capture of Kherson in early March practically spelt doom for the NATO’s design to extend its military presence in the Black Sea basin. Today, the game is practically over for the US and NATO,  once Russia took control of the entire basin of the Sea of Azov. Russia now de facto controls the access of the Dniepr to and from the Black Sea. And the Dniepr happens to be the main river way for Ukraine’s transportation links to the world market.”

This development has had repercussions for Western strategy with regard to the South Caucasus:

“Washington has belatedly understood that Russia has outwitted the western alliance and gained the upper hand in the great game in the eastern Black Sea region. So, the Western strategy towards the Caucasus and Central Asia is being reworked. The NATO Secretary-General Jens Stoltenberg scheduled a meeting in Brussels today with the foreign minister of Azerbaijan Jeyhun Bayramov.

Importantly, Bayramov also attended a meeting of the EU-Azerbaijan Cooperation Council today in Brussels. The EU foreign policy chief Josep Borrell later said at a joint news conference with Bayramov that “Azerbaijan is an important partner for the European Union and our cooperation is intensifying.” Meanwhile, yesterday, the European Commission President Ursula von der Leyen visited Baku to sign a memorandum of understanding with Azerbaijan on energy cooperation.

All this is taking place against the backdrop of Charles Michel, the president of the European Council, spearheading efforts to mediate between arch rivals Azerbaijan and Armenia. As part of the EU’s diplomatic efforts, Michel hosted in April a meeting in Brussels between Azerbaijan’s President Aliyev and Armenia’s Prime Minister Nikol Pashinyan where the two sides expressed willingness to secure a peace agreement. Last week, the CIA Director William Burns paid an unpublicised visit to Yerevan in this connection. Evidently, Washington and Brussels are jointly strategising a game plan to replace Russia and Turkey, which have hitherto taken the lead roles in Transcaucasia.

There should be no doubt that Moscow is watching closely the synchronised US-EU-NATO moves in the Caucasus targeting Azerbaijan with a view to undermine Russia’s consolidation in the Black Sea and the Caspian Sea regions, which poses a formidable hurdle to the advancement of the NATO strategies toward Central Asia and Xinjiang. This is a high-stakes game.

It will be recalled that on February 22, just two days prior to the launch of the special military operation in Ukraine, Putin hosted the president of Azerbaijan Ilham Aliyev in the Kremlin. They signed “a wide-ranging agreement,” the details of which were not divulged. The document is titled the Declaration on Allied Interaction.

Clearly, oil-rich Azerbaijan, which is not only a littoral state of the Caspian Sea but a gateway to both Central Asia and Russia’s Volga region, is destined to play a key role in the great game in the period ahead.”

This is the political agenda that may lie behind the EU’s overtures to Baku but for now, to borrow a famous Irish slogan, Europe’s Difficulty is Azerbaijan’s Opportunity.

The Russia/Azerbaijan Declaration on Allied Interaction (February 2022)

As M.K. Bhadrakumar noted, the Azerbaijan President signed a Declaration on Allied Interaction with President Putin in late February 2022, on the eve of the Russian Special Military Operation in Ukraine. An article entitled How the Conflict Over Ukraine Affects Security in the South Caucasus by Nargiz Gafarova in the excellent Baku Dialogues (Summer 2022), throws some light on the Declaration on Allied Interaction between Moscow and Baku:

“This document aims at deepening diplomatic, political, and military cooperation between the two states. Widely viewed as a way to balance the impact of the Shusha Declaration, it has garnered further attention in light of the escalation of the conflict in Ukraine and Russia’s recognition of Ukraine’s breakaway territories, notwithstanding the fact that its timing was largely coincidental since negotiations on its language had gone on for a year or so. Still, the relevance of Article 1 of this document is not to be discounted in light of the events taking place outside the South Caucasus.”

The Shusha Declaration is a wide ranging co-operation agreement between Azerbaijan and Turkiye including mutual defence guarantees signed in June 2021. President Aliyev of Azerbaijan referred to it as “an alliance”.

Certainly, as Nargiz Gafarova notes, for Azerbaijan the Declaration on Allied Interaction with Russia is a balancing counter-weight to the Shusha Declaration with Turkiye. However, the more Turkiye is drawn into the web of Eurasian relationships that are being established and which will become functional over the coming years the more the Shusha Declaration will become another layer of such relations rather than a counter-weight.

Although the Declaration on Allied Interaction may have been in preparation for some time a reading of Article 1 leads the present writer to conclude that the timing was far from coincidental. It was actually imperative for both parties in light of what was about to happen.

Here is Article 1:

“The Russian Federation and the Republic of Azerbaijan build their relations on the basis of allied interaction, mutual respect for independence, state sovereignty, territorial integrity and inviolability of the state borders of the two countries, as well as adherence to the principles of non‑interference in each other’s internal affairs, equality and mutual benefit, peaceful settlement of disputes and non‑use of force or threat of force.”

This was an important concession won by Azerbaijan from Moscow at a time when the Kremlin was going out of its way to ensure its own security in light of the great transformation what it was about to embark upon would produce. That is why Putin took great care to go around his allies and good neighbours to ensure their needs were taken care of prior to the Russian military intervention in Ukraine.

By launching the military operation in Ukraine the Kremlin knew that Russia would be assailed by a massive response from the West that would entail a long-planned military, political and economic assault on Russia aimed at regime-change. The Russian military intervention and the Western response to it, therefore, would transform the geopolitical situation in the world. A new iron curtain would fall and a new great game would begin. Russia would be forced by the West’s reaction to fully embrace the Eurasian project which had been talked about for a long time, but which the preferred Western-orientation of Russia had obstructed over the years. With Europe being marshalled by Washington in its economic war against Russia the economic linkages that bound Russia to Europe, in the mutual interest, would begin to be severed. Russia would have to turned eastward due to the loss of its main energy market and the withdrawal of Western business. The 30 year Russian attempt to establish capitalist economic and political relations with Europe, after the collapse of the Soviet system, would come to an end. Russia would be reorientating economically and politically toward Central and Southern Asia and China in the future.

For Baku the Declaration on Allied Interaction pre-empted the possibility of the Kremlin recognising Armenian separatist territorial claims to the former Nagorno Karabakh Autonomous Oblast. Given the presence of Russian peacekeepers in the rump of the former NKAO, within Azerbaijan’s sovereign territory, this obviously represented a danger for Baku, particularly since the separatists, unable to achieve union with Armenia, may be tempted to bid for permanent “Russian protection” to prevent their de facto re-incorporation into the state of Azerbaijan in 2025, when the Russian peacekeeping mission can be terminated under the Trilateral Agreement of 2020.

There can be little doubt that Russia will use its peacekeepers in Karabakh as a bargaining chip in negotiations with Baku during 2024, to exact some concessions from Azerbaijan in return for withdrawal, but the Declaration on Allied Interaction indicates that Moscow will presumably not override sovereignty or territorial integrity.

This was a shrew move by the Aliyev government, not fully appreciated by the anti-Russian element in the country. The fact that Azerbaijan has had a problematic relationship with Russia for two centuries did not negate the need to take account of the substance of Russia that existed, in the national interest. The substance of Russia and what it was capable of was soon there for all to see in Ukraine for anyone who doubted its will to power.

In December 2020, Turkiye’s President Erdoğan announced the 3+3 initiative at a joint press conference with President Aliyev of Azerbaijan. The 3+3 format for regional co-operation is an initiative that built on an idea that originated in Iran during the Karabakh war. The proposed grouping for political collaboration and regional development would cover the three countries of the South Caucasus (Armenia, Azerbaijan, and Georgia) plus the three most important countries neighbouring this region (Russia, Turkey, and Iran). 

Pax Caucasia and 3+3

Vasif Huseynov has written in Baku Dialogues, in a piece entitled Prospects for Pax Caucasia? The 3+3 Regional Cooperation Initiative, about the important early manifestations of this regional co-operation which have occurred since the liberation of occupied Karabakh War unblocked the impediments to regional development:

“The resolution of the conflict over Karabakh and the commitment contained in the tripartite statement to (re)establish transport and communication links in the region is a notable chance to set in motion a virtuous circle of economic, political, and societal developments. The envisioned transportation projects, in particular the Zangezur corridor, constitutes the core of the 3+3 initiative. The Zangezur corridor will not only connect mainland Azerbaijan with its Nakhchivan exclave through the southern part of Armenia but also will provide a transportation link between other members of the 3+3 group. Armenia will gain ease of access to Iran and Russia through the territories of Azerbaijan, thanks to this corridor. The corridor will also provide a stable overland communication between two major regional powers: Turkey and Russia. By connecting the 3+3 members through infrastructure, the Zangezur corridor will open up an opportunity for their political rapprochement and the deepening of economic cooperation. 

In a recent deal with Iran on 11 March 2022, Azerbaijan obtained an alternative route to the Zangezur corridor, which in turn markedly strengthened Azerbaijan’s negotiating position with Armenia. The memorandum of understanding signed by the two states in Baku mapped out a plan to establish new transport and electricity connections to link the western part of mainland Azerbaijan with its Nakhchivan exclave via Iran’s northwestern region. In a way similar to the Zangezur Corridor (approximately 43 km), the trans‑Iranian route (55 km) is also supposed to include both railway and motorway links in addition to communication and electricity connections. This new route is planned to be constructed in proximity to the Iranian‑Armenian state border and will generally mirror the Zangezur corridor…

The new agreement between Iran and Azerbaijan that provides a direct alternative to the Zangezur corridor is of huge importance… Nevertheless, it does not mean that Azerbaijan has abandoned its plans to build a transportation passage through southern Armenia. The bottom line is that both the Zangezur corridor and the trans-Iranian corridor will provide a practical basis for substantive talks on the establishment of a regional co-operation platform.”

In terms of the wider implications of the 3+3 initiative Huseynov writes:

“The opportunities for the realization of the Pax Caucasia initiative and the benefits it promises for the future of the region can be manifold. This would create a security situation in the South Caucasus that has never existed before in the history of the region. The external powers, which have traditionally competed for influence in the region, used to manipulate conflicts taking place between the region’s countries, playing them off against each other. The Second Karabakh War and the subsequent emergence of the 3+3 initiative, which would bring these powers together in an all‑inclusive regional mechanism for the first time ever, would open a new chapter in the history of the South Caucasus.”

In March 2022 Russian Deputy Prime Minister Alexei Overchuk stated at the “Current state and prospects of Russian-Azerbaijani relations in the context of integrated processes” conference in Baku, that active work was now underway to unblock transport communications in the South Caucasus.

Russia Briefing (14/3/2022) noted:

“Russia needs to open up new supply chain routes in the wake of the massive wave of sanctions that has enveloped much of its European potential and start to improve transport and logistics to the East. That includes routes from Russia and the Caucasus, no easy feat in that the significant Caucasus mountain ranges divide the two regions. Russia needs to develop better access especially through to Baku, Azerbaijan’s major Caspian Sea Port. That gives Russia better trade access through to Armenia, its Eurasian Economic Union (EAEU) trade partner, the Caucasus markets of Azerbaijan and Georgia, as well as west to Turkey and beyond to EU markets in Bulgaria and Romania. West from Baku, goods can be connected through to Kazakhstan and onto China, while south they can head via the INSTC to Iran, the Middle East, East Africa, and onto India and South Asia. It is important therefore that the South Caucasus bottleneck be solved.

“We are moving along the path of economic integration. Today we see that the region is turning into a Macro Region, a single cooperation in the production and delivery of goods is being established. Today we are working to create a space for working citizens and the transportation of goods” … Overchuk said.“

Economic Corridor Development

Pepe Escobar, a thoughtful observer of geopolitical trends, has also drawn attention to the increasing importance of economic corridors in the South Caucasus/Caspian region. He argues that the most crucial recent geo-economic development is the US/UK/EU-provoked collapse of trade/supply lines along the borders between Russia and the EU which have highlighted the economic sense of the International North-South Transportation Corridor (INTSC). The Russia-Iran-India corridor, planned 2 decades ago, links northwest Russia to the Persian Gulf via the Caspian Sea and Iran.

This is very important in ending Iran’s commercial isolation and connecting it up to Russia, via Azerbaijan. At present, the construction of the Rasht–Astara railway is 70% complete, and the Tehran government has approved the construction of the Rasht-Caspian port railway as a separate rail route section for combined cargo transportation to Russia and the Caspian Sea countries, including Azerbaijan, Kazakhstan, Russia and Turkmenistan. The involvement of Russian construction assistance financed by Iranian oil will bring the completion of the route forward to mid-2023. Currently, 160 km of track has been laid, and a joint Iranian/Azerbaijani financed waterfront project has been built in Astara by Iran Railways, connecting the rail route from Astara in Iran to the similarly named Astara in Azerbaijan, where the track goes onto Russia.

The Rasht-Atara and Rasht-Caspian rail routes are an integral part of Iran’s International North-South Transportation Corridor which links Caspian maritime trade directly via rail to Iran’s Persian Gulf ports, giving access to Middle East, East African, India and South Asian supply chains. The route is already operational but only through road before the completion of the rail sections. Getting these operational is a key logistics issue, especially due to the changing geopolitical situation and interruption of supply chains between Europe and Asia. However, the political and economic benefits could be immense.

The transportation time between St. Petersburg and Indian ports is 25 days. This corridor, using a combination of land and sea transportation, carries an enormous geopolitical significance for two BRICs members and a prospective member of the “new G8” because it opens a key alternative route to the established alternative from Asia to Europe via the Suez canal which is both faster and cheaper.

It is something like the Berlin-Baghdad Railway for the 21st Century.

In his article In Eurasia, the War of Economic Corridors is in full swing and under the heading “Caspian is key” Escobar writes:

“The genesis of the current acceleration lies in Russian President Vladimir Putin’s recent visit to Ashgabat, Turkmenistan’s capital, for the 6^th Caspian Summit. This event not only brought the evolving Russia-Iran strategic partnership to a deeper level, but crucially, all five Caspian Sea littoral states agreed that no NATO warships or bases will be allowed on site. That essentially configures the Caspian as a virtual Russian lake, and in a minor sense, Iranian – without compromising the interests of the three “stans,” Azerbaijan, Kazakhstan and Turkmenistan. For all practical purposes, Moscow has tightened its grip on Central Asia a notch... Stronger trade and financial links with Iran now proceed in tandem with binding the three “stans” to the Russian matrix…

Caspian littoral state Azerbaijan… presents a complex case: an oil and gas producer eyed by the European Union (EU) to become an alternative energy supplier to Russia – although this is not happening anytime soon…

Compared to the other “stans,” Azerbaijan is a relatively minor producer (despite oil accounting for 86 percent of its total exports) and basically a transit nation. Baku’s super-wealth aspirations center on the Southern Gas Corridor, which includes no less than three pipelines: Baku-Tblisi-Erzurum (BTE); the Turkish-driven Trans-Anatolian Natural Gas Pipeline (TANAP); and the Trans-Adriatic (TAP). The problem with this acronym festival – BTE, TANAP, TAP – is that they all need massive foreign investment to increase capacity, which the EU sorely lacks because every single euro is committed by unelected Brussels Eurocrats to “support” the black hole that is Ukraine. The same financial woes apply to a possible Trans-Caspian Pipeline which would further link to both TANAP and TAP... The bottom line is that Russia remains in full control of the Eurasia pipeline chessboard. Gazprom executives know all too well that a fast increase of energy exports to the EU is out of the question. They also factor the Tehran Convention – that helps prevent and control pollution and maintain the environmental integrity of the Caspian Sea, signed by all five littoral members.”

The Trans-Caspian International Transportation Route (TITR), which has a future projected capacity of 10 million metric tons has gained in importance since the Ukraine war. This corridor aims to link the Caucasus and Central Asia with both Europe and China. It is the West-East route between Azerbaijan and Uzbekistan across the Caspian that will meet the North-South Transportation Corridor at Baku. A declaration on deepening strategic partnership and expanding comprehensive co-operation was signed by the governments of Azerbaijan and Uzbekistan in late June 2022. Turkiye has already been engaging with Tashkent, with the Expanded Military Cooperation Agreement signed in late March 29 in Tashkent by the Turkish and Azerbaijani Defense Ministers.

Pan-Turkic co-operation and integration is therefore proceeding within the general Eurasian development. There should be no surprise about that. The Turkic states, many of them landlocked, stand to gain immensely from economic development brought about by the great inland commercial trade networks of the new silk roads, far from the disrupting influences of the Atlanticist maritime powers. Their transnational character make them perfect for regional integration.

The necessary infrastructural investment required to transform the potentially significant Trans-Caspian route is more likely to be borne by China than by Europe given the bleak economic outlook that faces the EU and its engine room Germany, given the loss of low cost energy and the pledge to divert resources to rebuild what’s left of the Ukrainian state. What is happening as a result of the Ukraine war is an intensification of Eurasian economic development which will tie in states like Azerbaijan, Georgia, Armenia and Turkiye to great economic infrastructure projects upon which future prosperity is built. These great projects are largely outside the sphere of influence of the West, and the US and Europe has detached itself from this development because of its sanctions regime on Russia. Early in the war in Ukraine the question that was being asked in the South Caucasus was what kind of Russia would exist after the conflict? How much would it be weakened perhaps? But this question has been superseded by the geopolitical tectonic shifts that are occurring as a result of the war and sanctions regime. The embrace of the East and the rejection by the West, aside from energy supply, may be the most important development of the war. It seems that the brief two century European hegemony in the world, extended by the rise of the US, is coming to an end. The future is Asia and Eurasia.

The EU and Azerbaijan

It appears, however, that the South Caucasus, and Azerbaijan in particular, is coming increasingly within the sights of both the European Union and United States and we are seeing the opening stages of geopolitical conflict in the new Great Game.

With reference to the escalating conflict in Ukraine Nargiz Gafarova has written in Baku Dialogues:

“… two silver linings to the escalation of the conflict over Ukraine in the context of the South Caucasus seem to be visible. First, the European Union has further increased its presence and engagement in the region. The EU seems more open to political and economic rapprochement with the region, as reflected in its facilitation to the process of normalization between Armenia and Azerbaijan as well as its willingness to take (admittedly) tentative steps in advancing Georgia’s membership prospects. Second, the restoration of a nuclear deal with Iran, which would include the lifting of at least some of the sanctions imposed on the country, would be greeted positively by its Tehran’s northern neighbors. Iran’s rapprochement with the West would dramatically reduce one of the biggest threats to regional stability; it would also enable Iran to become an important energy diversification partner for the region and the West.” 

In the light of Eurasian economic developments already noted this an over-optimistic reading of things. As recent events have demonstrated, at both the Ashgabat Caspian and Tehran Summits, Russia has been carefully rearranging the landscape in alliance with China, Iran and even NATO member, and ally of Azerbaijan, Turkey, at the expense of the West. The three most significant BRICS states – Russia, India, and China are slowly co-ordinating their strategies across Western Asia, with Iran involved in all of these moves. The four most important energy-producing nations – Russia, Iran, Saudi Arabia and Venezuela – are acting to break free of the Western capitalist system in favour of the construction of an alternative economic bloc within a multi-polar world.

There would be something rather pathetic about the US going cap-in-hand to Venezuela and Iran to bail the West out of the difficulty it has got into through its economic war on Russia. Both these states have been subject to rigorous and damaging US sanctions and were openly considered to be Washington’s enemies. Biden, therefore, could not bring himself to beg for their help or to make the necessary concessions to bring them onboard an anti-Moscow coalition. In fact, Biden chose to go to what he recently described as “a pariah state” in preference to knocking on the door of Iran.

The Iranians were probably open to a renewed nuclear deal with the US after Trump’s fall and Biden’s coming to power. But after experiencing Washington’s ripping up of the previous treaty and the Biden administration’s prevarication, with negotiations seemingly going nowhere, Tehran has had enough. It had become common knowledge that the US had become agreement-incapable, perhaps due to the volatilities of its democracy. Who knows who makes the big decisions in Washington? Probably not President Biden so how can the US be relied upon, in the same way that Russia and China can be relied up, where the source of decision-making is clear. With the division of the world arising from the West’s economic war the Iranians have chosen Russia as a more reliable future partner within a Eurasian economic development taking in India and China that will overcome the Western sanctions imposed upon them. No need for negotiations with the treaty breakers again.

President Biden has failed miserably in his diplomatic missions to garner support against Russia, even with the US’s former allies like Saudi Arabia and the UAE, and these failures stand in stark contrast to the successes of Putin in re-arranging the geopolitical chessboard across Eurasia. The non-European world seems to be taking the Ukraine conflict as an opportunity to break out from US hegemony and establish a multi-polar world. When the US launched its “devastating sanctions” against Russia, it expected most of the world to be intimidated into line. However, most of the world suddenly concluded that it did not wish to be on the receiving end of similar devastating arbitrary sanctions, including loss of national reserves, and defied the American power which showed signs of decline.

In her Memorandum of Understanding statement in Baku, Ursula von der Leyen noted that because Russian gas supplies were “no longer reliable”,

“The European Union has therefore decided to diversify away from Russia and to turn towards more reliable, trustworthy partners. And I am glad to count Azerbaijan among them. You are indeed a crucial energy partner for us and you have always been reliable. You were a crucial partner not only for our security of supply, but also in our efforts to become climate neutral. The Memorandum of Understanding that we have just signed makes our energy partnership even stronger.”

The Memorandum of Understanding promised Baku the investing of EUR 60 million of EU funds in Azerbaijan until 2024, with the Economic and Investment Plan having “the potential to mobilise up to EUR 2 billion in additional investments.” Von der Leyen also promised that the EU would be the “leading donor in de-mining” of Karabakh and announced a new EUR 4.25 million package for this purpose.

Who could blame Azerbaijan for taking advantage of this sudden benevolence from the EU after so many years of being treated as second class in relation to Armenia?

The EU’s interest in Azerbaijan as energy supplier

Pepe Escobar’s view that Azerbaijan could not be “an alternative energy supplier to Russia… anytime soon” is backed up by the estimation that while at present around half of the 500 billion cubic metres of Europe’s gas needs are supplied by Russia, Azerbaijan could at most only replace about 4 per cent of its requirements.

Gubad Ibadoghlu, a Senior Visiting Fellow at the London School of Economics asks “how feasible is it for the EU to use imports from Azerbaijan as an alternative to Russian gas?” in an article entitled Could Azerbaijan help the EU reduce its dependence on Russian gas? for the LSE website. He answers the question as follows:

“Last year, Azerbaijan supplied 8.15 billion cubic meters of gas to European markets via the TAP pipeline… The order from Europe to Azerbaijan for 2022 is 9 billion cubic metres, and for 2023, it is 11 billion cubic metres. Europe wants the Southern Gas Corridor to be expanded. If the expansion works begin soon, the pipeline’s capacity will reach 31 billion cubic metres in 2025, which is the maximum design capacity.

However, in order to increase exports to Europe, Azerbaijan must launch at least the second project in the Absheron field. In the future, it is expected to sell 5-6 billion cubic metres of gas to the European markets within this project. However, it will take at least four years to increase production in the Absheron field. This means that if the deeper installation of the platform begins in 2023, construction will take until 2027. At the same time, in 2027, along with the Absheron field, gas volumes may be increased in the Karabakh and Kapaz oil and gas fields, as well as in the Umid field. Thus, in around five or six years, Azerbaijan can increase gas exports to Europe by 5-7 billion cubic metres.

As things stand, Azerbaijan will be unable to help Europe meaningfully reduce its dependence on Russian gas in the near future. There are at least two reasons for this. The first is the limited annual capacity of the TAP pipeline, which delivers Azerbaijani gas to Europe. At present, the capacity of the TAP pipeline allows for the transportation of 10-11 billion cubic metres of gas. The capacity of the TAP pipeline can be expanded to 20 billion cubic metres. In addition, the Southern Gas Corridor project requires additional investment and time. This project needs to be developed and its annual capacity can be increased first to 24 billion cubic metres and then to 31 billion cubic metres. At the same time, European gas buyers must make legal and commercial commitments to Azerbaijani gas producers. These changes will take time.

Second, even if the capacity of the TAP pipeline is increased in the short term, Azerbaijan will not be able to increase gas exports to Europe in the coming years. As noted, in order to achieve this, along with Azeri-Chirag-Guneshli and Shah Deniz, gas production from the Absheron, Karabakh, Kapaz, and Umid oil and gas fields must be increased.

In the short term, Azerbaijan simply does not have the opportunity to provide an alternative to Russian gas for the EU. In fact, even if there was enough gas, it would technically be impossible to deliver it to Europe. At best, in five years, Azerbaijan will be able to transport 20 billion cubic metres of gas to Europe within the second phase of the Southern Gas Corridor. Therefore, among the alternatives for Europe to decrease its dependence on Russian gas, Azerbaijan’s capabilities seem weak compared to the United States, Qatar, Algeria, and even Iran.”

President Aliyev has been playing down the notion of Azerbaijan rescuing Europe from its predicament by replacing Russian energy and has, more accurately, described it as helping Europeans out in time of need. That is an important distinction because it is realised in Baku that whilst Azerbaijan may gain a more even-handed approach from the Europeans in the future, and better relations, there will not be an overturning of the current power relations in the region.

So what is the EU’s game in relation to the South Caucasus and Azerbaijan? Is it just benevolent soft power that Baku can avail of? Or is it a “synchronised US-EU-NATO move in the Caucasus targeting Azerbaijan with a view to undermine Russia’s consolidation in the Black Sea and Caspian Sea regions” as M.K. Bhadrakumar argues. In other words, a kind of probing political advance that occurred in Ukraine during 2013-14 that caused the disintegration of Kiev’s balancing between Russia and Europe and the road to war and fragmentation of the Ukrainian state?

Only time will tell.

However, what is clear is that both the EU and US are onlookers peering into the window at the transformative geopolitical developments in the Eurasian heartland that have been accelerated by Western action against Russia.

The US and Azerbaijan

The US also has began to take a renewed interest in Baku and the Azerbaijan/Armenia peace process with Secretary of State Anthony Blinken recently discussing current issues with President Aliyev. 

The US State Department’s Integrated Country Strategy, released in April 2022, indicates the renewed importance Washington views Azerbaijan as having in achieving its strategic interests in the South Caucasus:

“The intensive fighting in the fall of 2020 in and around Nagorno-Karabakh fundamentally altered the geopolitical order in the South Caucasus, elevating the importance of our bilateral relationship with Azerbaijan in achieving U.S. strategic interests in the region…

Azerbaijan’s shared border with Iran and Russia, close relationship with Turkey, and extensive energy links make it an important player in South Caucasus and European regional security… We will also prioritize increased NATO interoperability for Azerbaijan to strengthen our joint capacity to contribute to international security efforts… Azerbaijan’s geographic location also gives it great strategic importance as an energy producer and transit hub. The United States has long recognized the importance of Azerbaijani gas exports through the Southern Gas Corridor to ensure European energy security and reduce dependence on Russian gas…

U.S. Embassy Baku will strengthen its internal operations to reflect U.S. policy goals and interests and ensure we have the operational platforms in place to engage in robust bilateral diplomacy.”

The United States is, of course, an important balancer for Baku. At the very least it is insurance against being pushed around by two powerful states to the North and South – Russia and Iran – both with historically antagonistic relations with Azerbaijan. And since Azerbaijan is now in alliance with NATO member, Turkiye, both Russia and Iran have to think twice before they do anything to the displeasure of Baku. Moscow and Tehran also know that the present government in Baku is the one most likely to have good relations with them both. Any more West-leaning alternative would be worse for both Russia and Iran and could destabilise the region.

The down-side of the US interest for Azerbaijan is the US insistence that the OSCE Minsk Group still has a role in the future of Karabakh. This is despite the fact that President Aliyev has made it clear that the Karabakh issue has been settled in the only way it could after 28 years of fruitless diplomacy and the failure of the Minsk Group to fulfil its mandate. According to Aliyev the Minsk Group is “defunct” and “has now left the stage.” Sergei Lavrov has also made it clear that he considers the Minsk Group no longer active or useful.

This flogging of the dead horse of Minsk seems very like mischievous meddling by the US in an issue which was settled on the battlefield and through a peace brought about by diplomacy involving Russia and Turkiye, that achieved a managed end to the war. It is in the interests of Yerevan, which attempts to employ both Washington and Moscow as obstructors of the peace process and therefore very unpopular in Azerbaijan and, consequently unlikely to increase Western leverage in Baku.

The new found US interest in the well-being of Azerbaijan contrasts strongly with the pro-Armenian resolutions the US Congress passed during the Karabakh liberation war and the statement of the then candidate for the US Presidency, Joe Biden. Biden issued a strong pro-Armenian statement on his campaign website stating:

“a large-scale humanitarian disaster is looming for the people of Nagorno-Karabakh, who have already suffered too much and need to have their security protected. After a month of fighting, it is long past time for President Trump to directly engage the leaders of Armenia, Azerbaijan, and Turkey to push for immediate de-escalation and stop the advance of Azerbaijani troops into Nagorno-Karabakh.”

The Armenian separatists were to have their “security protected” by the US when the Russian-oriented separatists in Donbas were to be bombarded indiscriminately by US supplied long-range artillery!

The South Caucasus Balance Sheet

Svante Cornell writing in Baku Dialogues (The Centrality of Karabakh in Caucasus Geopolitics) has noted that of the three South Caucasus states:

“Azerbaijan has been a leader in the region in building sovereignty and true independence. It has relied on its own resources and rejected dependence on any outside power while forging friendly relations with all outside powers that respect Azerbaijan’s independence. This has been possible for two reasons: Azerbaijan’s economic strength, and its stable leadership.” 

Georgia, after separating from the crumbling Soviet Union, had tried to build its sovereignty and independence in a similar way to Azerbaijan, under presidents Eduard Shevardnadze and Mikheil Saakashvili. They had some success in building a functional independent state. However, NATO courted Georgia as a member at the same time as Ukraine and Saakashvili made the fatal mistake of reciprocating and underestimating Russia’s stated firm opposition to this. Georgia lost the 2008 war with Russia that resulted from this miscalculation. It was punished by a loss of territory and could have been punished more by Putin if he had had a mind to do so. Saakashvili fell from power in 2012 and the Georgian government has since pursued an accommodationist policy with Russia, which has increased Georgia’s economic dependence on Moscow again, while Europe expresses criticism of Georgian accommodation with the Kremlin. As a result Georgia has been shut out by the EU whilst welcoming Ukraine. This is causing growing resentment in Georgia.

Cornell says the following of Armenia:

“Armenia is in an even worse position than Georgia, with a society remaining in shock following its defeat in the Second Karabakh War. Armenia now has no choice but to rethink its entire national idea since independence, which had been based on the imperative of securing long‑term control over the territories it had conquered in the First Karabakh War.

This objective had informed all of Armenia’s major decisions since independence—above all, its ever‑deepening dependence on Russia for security. At this point, Armenia needs to accept the need to work together with its neighbors rather than somehow resecuring control over Karabakh. If Armenia does this, it will realize that it no longer needs to depend on foreign powers—whether they be Russia, the European Union, Iran, or anyone else. The reason for Armenia’s dependence on Russia was always purely related to Karabakh. There is no longer a rationale for this policy; Armenia is now left only with the downside of dependence, without the upside of territorial control.

A debate in Armenia has existed for a long time between those advocating for territorial expansion at all costs, and those proposing a more sustainable approach. The latter have not yet come out on top—and they are not likely to do so tomorrow. Still, there is no question that the Second Karabakh War, as tragic as it was for Armenia, accelerated the process of shifting from an expansionist policy to a more conciliatory one—if only because it showed the unsustainability of an approach focused on the expansion of irredentist territorial control.“

That is a fair summary of Armenia’s position at the crossroads that the present writer has written about many times in the past.

If we briefly step outside the South Caucasus, to the other side of the Black Sea, we see Ukraine having made the same miscalculation as Georgia did in 2008. The difference, however, is that Ukraine represents a much more substantial instrument for the West with its larger population and its ability to take on Russia, once supplied with substantial military training, armaments and economic subvention that were never provided to Georgia. (Note: there is a question mark over Ukraine’s population. It is usually said to be 44 million but there is now a strong suspicion that the Ukrainian population has declined from 52 million in 1991 to only 30 million on the eve of the Special Military Operation in February 2022. As Kiev has not held a census for over two decades this adds to the suspicion of large population decline).

The much greater threat Ukraine represents to Russia and the West’s much greater willingness to back it militarily to the hilt in war against Moscow means that the destruction of Ukraine is likely to be qualitatively greater than what happened to Georgia. Five months after the Russian Special Military Operation Ukraine has lost about 20% of its territory, around 3 thousand towns and villages, half of its gross national product, and a third of its coal production. It has completely lost access to the Sea of Azov, and traffic through the Black Sea ports has been suspended due to the conflict and mining of the water access routes. The number of refugees has probably reached 7 million. And this will invariably get worse the longer Ukraine keeps fighting and is supported by Washington.

Azerbaijan’s successful balancing policy has also enabled it to come up with a functional position toward the Ukraine conflict. All the South Caucasus states have adopted a wait and see policy, careful about a change in the global power might affect them. Because of their respective situations Armenia has adopted a policy that has attempted to place some distance between it and Russia while Georgia has adopted a policy that maintains a careful distance from the West. Both of these policies are likely to dissatisfy domestically and internationally.

Azerbaijan’s functional balanced policy has involved protecting its national interests by maintaining a good neighbourly policy toward Russia, during a period of the utmost danger for Moscow. At the same time Baku has provided humanitarian assistance for the Ukrainians affected by the consequences of the war and has declared its support for the principle of Ukrainian territorial integrity.

Azerbaijan is the stand-out successful state of the region. As Svante Cornell notes “Azerbaijan’s economic strength, and its stable leadership” are the things that have marked out the country as a successful state over its Caucasus neighbours and the tragic Ukraine.

But that is only part of the story. Economic strength can easily be squandered, as we have seen in the case of Russia in the 1990s and Ukraine, since independence. And stable leadership must be backed up with good statecraft if it is to be effective, mindful of the regional interests that lie around it. The ability to empathise with the interests of those which one formerly had problematic relations with, whilst maintaining a strong independent state, is vital to successful statesmanship.

One important thing needs to be said about stable leadership, which Azerbaijan has had since Heydar Aliyev rescued the country from the disasters of the early 1990s. Every single one of Georgia, Armenia and Ukraine – along with many other states have suffered Western-prompted Colour Revolutions, instigated by US and other Western NGOs and intelligence agencies in one form or another. Only Azerbaijan has been spared these destabilisations. Azerbaijan’s enemies would dearly love something of this kind to occur to revive their revanchist designs which at present lie dormant, with little hope of revival.

The very thing that has made Azerbaijan the most successful independent state in the region is what has made it now the centre of geopolitical attention with significant opportunities for the future as the “Caspian keystone” of Eurasian development.