After the disintegration of the Soviet Union, Caspian energy has always been a focus of the geopolitical game of great powers. For a long time, the primary strategic interest of the United States in the Caspian region has been to break Russia’s traditional monopoly and promote the reorganization of the geopolitical landscape by directly connecting the region to the world economic system. To this end, the United States and the European Union have vigorously promoted the diversification of European oil and gas pipeline construction in order to weaken the traditional influence of Russia and Iran in the Caspian Sea region. After the Russian-Ukrainian conflict broke out, the United States led the West to launch severe sanctions against Russia, one of the most important aspects of which was the embargo in the energy sector. As the conflict between Russia and Ukraine has entered a stalemate, the game between the United States, Europe and Russia has further intensified, which directly affects the future trend of Caspian energy politics.
Europe pays more attention to Caspian energy
The Caspian region has always been regarded by Europe as an important source of energy supply diversification. The EU supports the construction of a natural gas pipeline project that bypasses Russia and crosses the Caspian Sea, opening up the supply route from the Caspian Sea to Europe. The “Southern Natural Gas Corridor” is an important cooperation project promoted by the EU, Turkey, Azerbaijan and other countries for many years. It aims to import natural gas from the Shahdeniz gas field in the Caspian Sea of Azerbaijan to Europe via Georgia, Turkey and other countries. The Trans-Adriatic Gas Pipeline Project (TAP), the Trans-Anatolia Pipeline Project (TANAP) and the Turkey-Greece-Italy Pipeline Project (ITGI) are important components of the EU’s “Southern Gas Corridor”. After the official opening of the Trans-Anatolia Pipeline in 2018, it can transport 6 billion cubic meters of gas to Turkey and about 10 billion cubic meters of gas to Europe every year. The Trans-Anatolian Pipeline and the Trans-Adriatic Pipeline are connected at the Turkish-Greek border. The Trans-Adriatic Pipeline project, which began commercial operations in 2020, reaches Italy from Greece via Albania and the Adriatic Sea, with an initial plan to supply 10 billion cubic meters of Azerbaijani gas to Europe annually.
After the Russia-Ukraine conflict, Europe accelerated the expansion of the transmission capacity of these two pipelines, as well as the construction of the Turkey-Greece-Italy pipeline project. The trans-Anatolian and Trans-Adriatic pipelines will increase the volume of gas to 31 billion cubic meters per year in the near future. The Trans-Adriatic Pipeline’s managing director, Luca Hipati, said the pipeline is ready to expand capacity ahead of schedule if needed to meet market demand. After the Turkey-Greece-Italy pipeline project is completed, it will have an annual capacity to transport 10 billion cubic meters of natural gas. Russian Ambassador to Azerbaijan Boshanikov once stated that Russia is willing to connect natural gas to the Trans-Anatolia pipeline, but the conflict between Russia and Ukraine has made this possibility to naught, and Azerbaijan is more important in the field of energy supply. highlight. Azerbaijan is enhancing its strategic position in the Caucasus and the Caspian Sea region through various policy measures, and building the image of a reliable energy supplier and transit country.
Russia’s traditional influence remains strong
However, Russia’s traditional influence in the Caspian region is difficult to be squeezed out in the short term. The EU’s accelerated construction of the pipeline from the Caspian Sea to Europe will further intensify its conflict with Russia, prompting Russia to increase its control over the direction and scale of energy exports from Kazakhstan, Turkmenistan and other countries.
Russia maintains a relative monopoly in Kazakhstan’s oil pipelines. The oil pipeline of the Caspian Oil Pipeline Group connects the Tengiz oil field in Kazakhstan and the black sea shipping port in Russia. The Kashagan and Karachaganak oil fields in Kazakhstan also send oil through the Caspian Sea pipeline. In the Caspian Oil Pipeline Group, Russia owns 24% of the shares and is the largest shareholder, while energy giants Chevron and Exxon Mobil own 15% and 7% respectively, and the other 7.5% is owned by Rosneft and Shell. Owned by a joint venture formed by oil companies. The ban on Russian oil imports issued by the Biden administration does not include Kazakh oil shipped through the Caspian pipeline, which transports about 1.2 million barrels a day of Russian and Kazakh oil, accounting for about 1.2% of global crude oil demand. In April 2022, Russian Deputy Energy Minister Sorokin announced that the Caspian oil pipeline may be interrupted for two months due to storm damage. If this statement is true, it will reduce the oil flow of the Russian-Kari Sea oil pipeline, which may be as high as 1 million barrels per day. The Caspian Pipeline Group said in a statement that Western sanctions had made repairs to storm-damaged facilities more difficult. It is not ruled out that Russia’s maintenance at this time is an intentional move to aggravate the tight oil supply in Europe and retaliate against European sanctions.
In June 2012, Azerbaijan and Turkey signed a contract to build the Trans-Anatolia Gas Pipeline Project. The 1,700-kilometer-long pipeline, which opened in 2018, can deliver about 10 billion cubic meters of gas to Europe each year.
The Russia-Ukraine conflict complicates the game over the trans-Caspian natural gas pipeline. The Trans-Caspian gas pipeline project is designed to bypass Russia and Iran and transport gas from Turkmenistan and Kazakhstan to Turkey, Georgia and the European Union via Azerbaijan. The EU sees the pipeline as a natural eastward extension of the “Southern Gas Corridor”, seeking gas from Turkmenistan. Azerbaijan is ready to receive gas from Turkmenistan to support the Trans-Caspian gas pipeline, and Georgia has also announced its support for the connection of the Trans-Caspian pipeline to the “White Stream” pipeline. The United States actively promotes the export of natural gas from Turkmenistan to the West. In 2019, Trump signed the European Energy Security and Diversity Act, which provides for funding by the U.S. International Development Finance Corporation (DFC), the Trade Development Agency (TDA), and the Anti-Russian Impact Fund (CRIF). The U.S. International Development Finance Corporation will provide technology development, debt and equity financing for the Trans-Caspian Gas Pipeline. However, Russia and Iran oppose the construction of the trans-Caspian natural gas pipeline on the grounds that it affects the ecological environment. Russia is especially wary of the natural gas exports from Kazakhstan and Turkmenistan to Europe. In the context of the conflict between Russia and Ukraine, Russia and Iraq are bound to intensify their efforts to obstruct the construction of the trans-Caspian natural gas pipeline.
Caspian countries to increase energy exports to China
After the conflict between Russia and Ukraine, the focus of Kazakhstan and Turkmenistan’s foreign energy cooperation will be to increase energy exports to China. At present, China has become the third largest importer of oil in Kazakhstan and the largest importer of natural gas in Turkmenistan. The Central Asia Natural Gas Pipeline is China’s first cross-border energy channel of natural gas introduced by land. The pipeline starts from the border of Turkmenistan and Uzbekistan in the west, passes through central Uzbekistan and southern Kazakhstan, enters through the Horgos port in Xinjiang, China, and then connects to the west. Connected to the East Gas Pipeline. Since its operation in 2009, the A/B/C lines of the China-Central Asia Natural Gas Pipeline have been successively completed and ventilated. Line D of the Central Asia Natural Gas Pipeline is a concrete manifestation and effective practice of building the “Silk Road Economic Belt”. If the fourth pipeline is opened in the future, the scale of natural gas transmission from Central Asia to China will increase from 55 billion cubic meters to 80 billion cubic meters per year.
The conflict between Russia and Ukraine has led Europe to step up its search for alternative energy sources, which will intensify the geopolitical game of energy in the Caspian Sea to a certain extent. However, in the long run, the shale revolution and world energy transition have greatly weakened the role of traditional fossil energy producers in the world energy landscape. status. At the same time, in order to curb the rising momentum of global oil prices, the United States and Europe have released a strong signal of nuclear negotiations, intending to release more Iranian crude oil into the international market. Subject to Russia’s actual geopolitical influence in the Caspian Sea region, and considering the huge potential and realistic possibility of natural gas development in the Eastern Mediterranean, the position of Caspian Energy in the international energy pattern will be further weakened, and expanding export markets will be the main way out for Caspian energy producers. .