With Russia focussing its energies on Ukraine and finding its geopolitical stature diminished by widespread international condemnation, there are hints of significant activity and possible realignments taking place on its periphery.

Most obvious of these are the decisions of Finland and Sweden to request NATO Membership following what the Swedish government has called a “fundamentally changed security environment.” However, in the Caspian Region, the situation is particularly interesting.

Azerbaijan & Armenia

There has been a particular flurry of activity in the Caucasus of late. On May 18, the President of Lithuania, Gitanas Nauseda, visited Baku. The headline statement from Azerbaijani President, Ilham Aliyev, underlined his encouraging dream of making the South Caucasus a “region of peace, cooperation and interaction.”  Lithuanian press releases concentrated more on encouraging closer cooperation of Azerbaijan with the EU (European Union) as well as bilaterally with Lithuania. The core idea, given the need to diversify energy resources and end dependence on Russia, is that Vilnius needs Baku’s oil and gas while Azerbaijan can gain from Lithuanian expertise in the development of renewable energy sources. Azerbaijan’s professed desire to become a “regional renewable energy hub” stems not only from ecological considerations but also from the realization that becoming a well-developed “green growth space” would also allow more of the nation’s petroleum to be exported.

Azerbaijani President Ilham Aliyev, President of European Council, Charles Michel, and Armenian Prime Minister Nikol Pashinyan walk together into a trilateral meeting in Brussels, May 22, 2022. Image: president.az

Meanwhile, vis-à-vis the Karabakh negotiations, Russia is getting annoyed at being side-lined by the EU, which appears to be taking an increasingly prominent role in encouraging momentum towards the kind of peace and cooperation of which Mr. Aliyev spoke. That was particularly noteworthy this weekend as a trilateral meeting brought the heads of state of Armenia and Azerbaijan together in Brussels with the European Council President, Charles Michel, as host.

The leaders announced on May 23 that they had agreed to set up border commissions aimed at eventual delimitation – a crucial step en-route to a lasting peace settlement. An EU communiqué suggested that there had been other important breakthroughs in transport connectivity. Notably, principles governing the transit route to Nakhchivan and border administration modalities were agreed upon, with the deputy prime ministers to thrash out details in coming days. Charles Michel described this as “tangible progress” and reassured both sides that the “EU is ready to step up its support” to help create sustainable peace. Soon after the meeting, the Armenian Minister of Foreign Affairs updated his Russian counterpart by phone about the latest negotiations. After all, Russia might be distracted, but Moscow remains an incredibly significant player in the region.

Georgia

That’s very much the case for Georgia, where two breakaway regions (Abkhazia and South Ossetia) remain essentially under Russian occupation. While Moscow’s forces are currently bogged down in Ukraine, longer-term Tbilisi will be nervous that, as a world pariah, the Kremlin might have ever fewer qualms to intervene in as its geopolitical situation is already at rock bottom. Currently, it’s reported that South Ossetian troops are fighting in Ukraine, helping the Russian army with what seems to be a manpower shortage. The possibility that South Ossetia might vote to join Russia in a July referendum would be a severe blow to Tbilisi. The country must also be smarting at the remarkable fast track into NATO being offered to Sweden and Finland, a stark contrast with Georgia’s longstanding but unfulfilled pleas for membership since 2008.

Servicemen of the Russian military base in the Republic of South Ossetia take part in a parade to mark the end of the 2nd World War. May 9, 2018.

Central Asia

In Central Asia, reverberations from the Ukraine situation are a little more muted but no less interesting. None of the five ex-Soviet states voted with Moscow at the UN meetings of March 2 and March 24 – all either abstaining or simply not voting at all. Moreover, Kazakhstan and Kyrgyzstan, like Armenia, refused to accept rouble-denominated customs duties from Russia, suggesting that Putin’s plans to integrate the region towards a tighter economic bloc are unravelling somewhat.

Intriguingly Kazakhstan refused to send troops to help Russia in Ukraine, despite the fact that back in January, Moscow had marshalled CSTO (Collective Security Treaty Organization) assistance to put down serious anti-government protests in the country. Plus, although Kazakh companies are not formally bound to enforce sanctions, at least one major iron ore enriching business has chosen to stop supplying its Russian customers.

Less powerful Kyrgyzstan has been treading a more cautious path. This week Bishkek announced that it would prosecute one of its nationals for having served in a support role with defenders in Ukraine (against the Russian invaders) using a law against soldiering abroad instituted initially to prevent nationals from fighting with radical Islamic groups. Analysts see the move as a nod towards Moscow. Several other Kyrgyz-born individuals have fought with Russia in the same conflict – albeit most known cases being those who had taken up Russian nationality beforehand.  

Iran

Oil prices have risen from around U$75 per barrel in January to over $110 in mid-May. Natural gas prices have more than doubled in the same period. That’s a windfall for producing states, including Azerbaijan, Turkmenistan, Kazakhstan and Iran. For Tehran, the effect could be doubly promising as suddenly the West has a new arch-nemesis in Russia and needs a source of rapidly available oil and gas – something that Iran could tap fairly quickly were sanctions to be lifted. That would help the Iranian economy while bringing down uncomfortably high oil prices to the benefit of fuel-poor Western nations. This situation has focused minds once again at trying to find a way to restore the JCPOA nuclear agreement from which the US unilaterally withdrew in 2018. Even sections of the normally implacably anti-Iranian Israeli press appear to be finally softening to the idea of such a deal. Geopolitically, however, the Iranian government is in a somewhat awkward position. The regime has been relatively close with Moscow in previous years, while Tehran and Kyiv were, to a degree, still at loggerheads over the tragic 2020 downing of a Ukrainian airliner. Tehran’s muted reaction to the Russian invasion jars with widespread public sympathy for Ukraine amongst ordinary Iranians – and with the Islamic Republic’s frequent claim to support oppressed underdogs elsewhere, most notably in Palestine and Yemen.

Throughout the Caspian Region, a great deal remains to be decided. If Western analysts’ reports are correct that Russia’s invasion indicates unexpectedly poor airpower and a lack of military robustness, then Russia’s neighbours might feel that, at last, they have greater freedom of geopolitical movement than was previously the case. But for now, nothing is certain.

SHARE: