A New Spring for Caspian Transit and Trade

View Full Memo

Excerpt

For the first time in three decades, the establishment of formidable TransCaspian infrastructure has become viable. Shortly following the collapse of the USSR, the United States, the EU and most states of Central Asia and the Caucasus sought to establish Trans-Caspian trade and transport routes, initially focusing particularly on energy, and envisioned these routes as an essential strategic component of linking the region to the West and strengthening the political and economic independence of the countries of the region. Despite close to thirty years of policy efforts, these forces did not succeed in establishing infrastructure that would link both sides of the Caspian Sea in a manner that makes this a corridor for considerable transport of goods or energy. This, however, may be changing. Events in 2022 and 2023 have accelerated efforts of the states in the region to establish viable infrastructure links across the Caspian Sea.

Trans-Caspian interconnection is being pushed by both positive and negative drivers. First, the states of the region, especially Kazakhstan, realize the clear geopolitical and energy security need for the diversification of its export routes. Russia has demonstrated that it is willing to disrupt Kazakhstani oil exports to promote its geopolitical goals, and general Black Sea insecurity renders the export of energy from the region through Black Sea ports much less reliable and more expensive. Similarly, the Taliban takeover in Afghanistan and closure of trade routes across Russia, Belarus and Ukraine has greatly increased the importance of the Trans-Caspian option for goods transport. On the positive side of the ledger, strategic cooperation between the states of Central Asia and the Caucasus has grown significantly, enabling the consolidation of foreign policies that focus on strengthening their independence and direct links to the outside world. The rise of Turkish strategic cooperation with the states of the region has further strengthened the impetus for the Trans-Caspian.

The Development of the Trans-Caspian Vision

Immediately upon the dissolution of the Soviet Union, many in the region and beyond grasped the prospect of new trading routes being opened across the Eurasian continent. This led to two separate but intertwined visions emerging. One was the vision of export routes for the hydrocarbon resources of Central Asia and the Caucasus to world markets. The other was the vision of a new trading route between Europe and Asia, in which Central Asia and the Caucasus served mainly as a transit corridor – but one that could nevertheless be lucrative for regional states, as it would lower the implicit “tax” visited on them by their landlocked geography and enable them to access markets both to the east and west.

Svante E. Cornell is Director of the Central Asia-Caucasus Institute & Silk Road Studies Program Joint Center. Brenda Shaffer is an international energy and foreign policy specialist, focusing on the Caspian region, European energy security, ethnic politics in Iran, and Eastern Mediterranean energy. She is Faculty member at the U.S. Naval Postgraduate School and a Senior Advisor for Energy at the Foundation for Defense of Democracies (FDD).