Atlantic Council

The international diplomacy aimed at thwarting Iran’s nuclear program has produced no concrete results. Iran’s leaders, in particular President Ahmadinejad, are set on going nuclear, and doing it soon. It is no surprise that U.S. Secretary of State Hillary Clinton was recently shuttling in the Middle East trying to reassure U.S. allies of the quality and stability of the American security guarantees.

However, there is at least one other relevant dimension of the Iranian nuclear problem, much less talked about: the Caspian.  The security implications of Iran’s nuclear program are huge for the Caspian region, and so are the consequences of a possible military strike or comprehensive sanctions against Iran.

The first question is the security of countries like Azerbaijan and Turkmenistan, which are both mega energy producers but not part of any security club. Russia, also a littoral state, is a regional super power with its own nuclear deterrent. It is unlikely that a nuclear Iran could directly, or strategically challenge Russia’s security.

A nuclear Iran, however, could exert significant pressure on Azerbaijan and Turkmenistan, in particular on their energy policy and strategic alignment. The lesson from the August 2008 war in Georgia is crystal clear – NATO umbrella does extend past the Black Sea and Partnership for Peace status is not a defense guarantee. It is a message that the leadership in Iran has picked up. There are also no significant bilateral agreements and security guarantees in place as in the case of the Gulf countries.

Azerbaijan’s natural gas is the backbone of the major Nabucco project aimed at supplying Europe with close to 10 billion cubic meters of Caspian gas. The country is also a major transit point for Kazakhstan’s oil pumped through BTC to the Turkish port of Ceyhan, and a European connection to Turkmen gas. Turkmenistan has an even bigger gas deposit, and is seen as a strategic gas partners in both Europe and China.  The Chinese already built a pipeline that supplies their southwestern province with Turkmen gas.

The Caspian is also relevant for facilitating direct China-Europe economic cooperation and trade. It is home to the old Silk Road, which for centuries served as the main artery of trade between the east and west. Today, this region again presents an opportunity for robust east-west cooperation on regional projects, as well as for integrating the production and commerce channels from Europe through Turkey, the South Caucasus and Central Asia, with China and India.  The size of this project – connecting China and Europe via the Caspian is worth billions of dollars in potential new contracts, jobs and production output.

However, none of these projects can be fully realized unless there are sufficient security mechanisms in place to deal with the Iranian nuclear threat. Investors will stay away from the region if the threat of instability is too high.

The risks of a nuclear Iran are not just direct, but also indirect – like nuclear proliferation in the Caspian region. Nuclear terrorism can link up with the region’s already notorious smuggling networks, exposing not only the Caspian, but also increasing the threat of nuclear terrorism in Europe.

The solutions are few, but the good thing is that they are obvious. Azerbaijan and Turkmenistan need to be integrated into a broader security umbrella in order to provide an effective deterrent against the Iranian nuclear threat or against the spillover from an international military intervention in Iran. One option is to issue both countries NATO security guarantees, which is probably the more bureaucratic and less sure way of going about extending western security benefits to the two Caspian countries. The other option is series of bilateral security arrangements between the U.S. and Europe and Azerbaijan and Turkmenistan. A bilateral security arrangement with China could also play a positive role.

It would be ideal if Europe could be the sole security guarantor for Azerbaijan under the Eastern Partnership umbrella, but the reality is that such a security arrangement is not worth much on the market. Europe’s reputation is tainted by its lack of capacity to take decisive actions when it comes to military interventions. A U.S. security guarantee is the more credible one, and still a necessary add-on to any European-Azeri or European-Turkmen security arrangement.

Borut Grgic, a nonresident senior fellow at the Atlantic Council, is the founder and chairman of the Institute for Strategic Studies in Brussels.