Cjss second Issue: cjss second Issue qxd

umes of natural gas and the location to pose any major threat to Russia’s sup-
ply dominance in Europe.  In the spring of 2007, Moscow spent a considerable
amount of money to buy out Iran’s potential access to the European gas mar-
ket through Armenia (Shaffer, 2009).
If Russia can be seen as the current leader in the competition for influ-
ence in the South Caucasus, Iran can be considered an outsider for now. Iran’s
policy in the Caucasus is based primarily on its own security and economic
considerations. Domestic inputs and constraints—primarily the presence of
a significant Azerbaijani minority in Iran—and its interests and confronta-
tions beyond the region, including that with the United States, also influence
Iran’s policies toward the region. However, the major Iranian concern in the
region is not economic but strategic and its main objective is to expand its in-
fluence, for historic, economic and political reasons. In recent years, Iran also
sees the role in energy security issues in the region and stands a good chance
of being a future contributor to existing and planned pipelines through the
Caucasus.
As for Turkey, Istanbul would prefer to see the European Union-backed
Nabucco pipeline built
1
, since it would transit Turkish territory and thus pro-
vide both a new source of gas for the country and a new source of revenue.
But Turkish participation in Nabucco also comes at a price. From Europe, the
Turkish government seeks guarantees of eventual Turkish membership in
the European Union. From Azerbaijan, the Turkish government wants a DAF
(Delivery At Frontier) agreement, meaning Azerbaijani gas becomes Turkish
gas as soon as it enters Turkish territory (from which Turkey will sell it on to
Europe).
Conclusion
Once considered a “crossroads of civilization,” the South Caucasus has
emerged as a crossroads of energy-export routes — spurring renewed com-
petition in the region. The August war radically transformed the geopolitical
pattern in the South Caucasus in several ways. First, Georgia lost its previous
central role in the region, which may endanger many investment programs
(including energy) previously linked to that country. Second, due to the break
in relations between Georgia and Russia, Moscow lost part of its influence on
the whole region, with the European Union and Turkey striving to fill that
gap. Third, the five-day war showed everybody how fragile south Caucasus
stability is and how dangerous an armed conflict may be in this region.
As the competition continues, only one thing is certain — there is no for-
mula for energy-export routes through the Caucasus that can satisfy all the in-
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terested parties inside and outside the region. The West’s failure to intervene
credibly in Georgia reduces the prospects of strong Western action to
strengthen and broaden the east-west energy transportation corridor across
the South Caucasus. 
Although Russia may seem to be a common enemy, the policies Moscow
follows often make sharp different South Caucasian states. And Russian pol-
icymakers frequently choose to play one against another.  The recent visit of
US President Obama to Turkey was far more significant than the President’s
speech would suggest. For Washington Turkey today has become a geopolit-
ical “pivot state” which is in the position to tilt the Eurasian power equation
towards Washington or significantly away from it depending on how Turkey
develops its ties with Moscow and its role regarding key energy pipelines.  
Its clear, that if Ankara decides to collaborate more closely with Russia,
Georgia’s position is precarious. As a result Azerbaijan’s natural gas pipeline
route to Europe, the so-called Nabucco Pipeline, could be blocked as well. If
it cooperates with the United States and manages to reach a stable treaty with
Armenia under US auspices, the Russian position in the Caucasus is weakened
and an alternative route for natural gas to Europe opens up, decreasing Russ-
ian leverage against Europe
2
. 
Moreover, for the Turkey and South Caucasian countries (remaining
members of the Commonwealth of Independent States (C.I. S) the choices are
stark - continue relations with Georgia after the August war as before, thereby
tacitly approving Tbilisi’s confrontational posture vis-a-vis Moscow and risk-
ing Russia’s wrath, or pay heed to Medvedev’s “privileged interests” in the
Caucasus
3
. While little is clear in this respect yet, last year’s military clash has
given former Soviet states significant food for thought about what happens to
former Soviet republics that ignore Moscow’s concerns and stray too far west-
wards.
The global economic recession, decline of European demand and the lack
of available investment are among the key factors making westbound
pipelines from Eurasia largely a pipedream. Add to that the increasing geopo-
litical “pull” of China, an increase in Russian clout in its so-called “near
abroad” after the Georgian war and the possibility of a future Iranian route -
if rapprochement with the US succeeds - and these uncertainties make the
future pipeline policy in South Caucasus a forecaster’s nightmare
4
. 
In addition if the combined effect of the financial crisis and the August
war is likely to weaken the political support for investments in South Cauca-
sus aimed at freeing the Caspian resources from the Russian control, it is even
more likely to undermine the economic viability of these investments that
has already been questioned because of the insecurity of the supply of gas
5
.
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