NATO, Russia, and Oil pipelines

by Steve Rosenthal

15 June 1999 16:23 UTC

(The following is from It presents detailed information

about the relationship between NATO-Russian rivalry and competition

for control of oil and pipelines in the Caspian region.)

Conflict Threatens Caucasus Pipelines June 15, 1999


Competition between Russia and NATO for influence on Russia's

periphery will undoubtedly accelerate following their confrontation in

Kosovo. Besides the Baltics and Ukraine, competition between Russia

and NATO is already fierce in the Caucasus. Increasing tension in this

already unstable region may drive oil companies operating in Central

Asia to look elsewhere for pipeline routes to move their oil. In

particular, they are likely to look south, to Iran.


Besides Kosovo, the Baltics, and Ukraine, another area of heated

contention between Russia and the West is in the Caucasus. There,

Russia is increasingly cooperating militarily with Armenia and is

believed to be cooperating politically with Abkhaz separatists, to

counterbalance NATO influence in Azerbaijan and Georgia. Complicating

matters, the wild card Chechnya is forging its own path with the aid

of Middle Eastern interests. Caught in the middle are international

oil companies, who are attempting to cash in on Central Asia's oil


The main pipelines for Central Asian oil -- the Baku-Novorossiysk

pipeline and the Baku-Supsa pipeline -- pass through the Caucasus and

are vulnerable to regional unrest. The older and larger

Baku-Novorossiysk line was ruptured by an explosion early on June 14,

apparently during an attempt by Chechen rebels to steal oil from the

route. The pipeline has been illegally tapped in the past. Flow

through the pipeline has also been halted repeatedly by the Chechen

government, on the grounds that Russia has failed to pay fees for use

of the portion of the pipeline that passes through Chechen territory.

The recently opened Baku-Supsa route, while touted as a safer route

for avoiding the Chechen instability, also quite poignantly avoids

Russia altogether -- undermining Russian influence on the region's

oil and Russian revenue from that oil. The Baku-Supsa route was opened

following military maneuvers training to defend the line by

Ukrainian, Georgian, and Azeri troops, acting as part of the regional

alliance then known as GUAM, and under the framework of NATO's

Partnership for Peace. GUAM, which also included Moldova, expanded to

include Uzbekistan during meetings in Washington DC, held

concurrently with the NATO anniversary summit in April, and

established a charter encompassing military cooperation within the

group and with NATO. GUUAM members, though part of the Commonwealth of

Independent States (CIS), have opted out of the CIS Collective

Security Treaty.

Intensifying this increasing competition between Russia and NATO in

the Caucasus, Azerbaijan claims that Russia brokered the sale of

several Chinese surface to surface missile complexes to Armenia,

which remains in a fragile truce with Azerbaijan over the contested

Nagorno-Karabakh enclave. Russia has also provided Armenia with

advanced jet fighters and surface to air missile systems. Reports have

now surfaced, denied by Yerevan, that three of the Chinese missile

systems are targeted at Georgia's Supsa oil terminal. On June 14, in

the largest incident of its kind since the two countries signed a

cease-fire five years ago, 300 Armenian troops reportedly attacked

Azeri positions in the Terter region. Baku claims three Armenian

assaults were repulsed with heavy losses.

As tension escalates in the Caucasus, NATO must again decide -- now

that it has put a toe in the pool, whether it intends to dive in. Oil

companies may not be willing or able for the situation to be

resolved. While the Baku-Supsa route was a Russia-skirting stopgap

until the expensive and controversial U.S.-backed Baku-Ceyhan

pipeline to Turkey could be built, neither route looks particularly

secure now or in the future. As long as foreign access to the oil

fields is not threatened, oil companies may now revive their interest

in previously considered alternative pipeline routes. One of these,

through western Afghanistan, has its own security concerns to contend

with. But the other, and perhaps most rational route -- south through

Iran -- is primarily blocked by U.S. political opposition. However,

U.S.-Iranian relations have been gradually improving, and we expect

to see U.S. oil companies with interests in Central Asia take another

shot at accelerating U.S.-Iranian detente.