Of increased potential importance for Western energy companies, the agreement establishes rules for the construction of large cross-border projects such as a trans-Caspian gas pipeline. This means that there are, at least officially, no political obstacles to this long-debated project and that its implementation depends solely on economic and security factors. That is why differences of opinion on how to divide some of its huge oil and gas deposits have been numerous – and fierce. Warships have sometimes been used to deter contractors hired by rival countries. The August Caspian summit was the latest step in 22 years of discussions and wrangling over the state of the sea, but it is by no means a comprehensive agreement reached. In particular, possession of the southern part of the seabed (and what it contains) is still pending. Iran with its smallest coasts is still holding its moment. Russia, Kazakhstan and Azerbaijan have concluded bilateral agreements based on median lines. Due to their use by the three nations, median lines seem to be the most likely method of delineating areas in future agreements. However, Iran insists on a single multilateral agreement between the five nations (with a goal of a fifth). Azerbaijan disagrees with Iran over some of the oil fields in the sea.

From time to time, Iranian patrol boats fired on ships sent by Azerbaijan to explore the disputed region. There are similar tensions between Azerbaijan and Turkmenistan (the latter claims that the former has injected more oil than had been agreed from a field recognized as common by both sides). Another important factor is that the boundaries of the seabed have yet to be negotiated (although they are now the subject of bilateral agreements, not multilateral agreements as before). It is significant that Kazakh President Nursultan Nazarbayev said on Sunday that the recent agreement allowed for the setting of national quotas for fishing. Following the summit, there are a few issues that still need to be worked out over the next few years. The most promising trend is the dialogue between Iran and Azerbaijan. Countries are in the process of activating cooperation in the energy sector. Iranian President Hassan Rouhani`s official visit to Baku in March resulted in a provisional agreement on the joint exploitation of oil and gas fields. New joint energy projects in the region are to be expected, but due to geological difficulties, they cannot be developed without Western technologies. Thus, US sanctions have become a serious obstacle to deepening Azerbaijani-Iranian cooperation. According to unofficial reports, SOCAR, Azerbaijan`s state-owned oil company, has informally suspended the implementation of its agreements with Iran.

The presidents of the five Caspian Sea coastal countries – Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan – agreed in August on the legal status of the sea after 22 years of negotiations. . . .