The Iranian Studies Unit (ISU) of the Arab Center for Research and Policy Studies hosted Mahmood Monshipouri, Chair and Professor of International Relations at San Francisco State University, on 20 June 2021 who presented a lecture on “The Evolving Dynamics of Pipeline Politics in South Caucasus.” Mehran Kamrava, Director of the ISU and Professor of Government at Georgetown University in Qatar, served as the moderator.

Monshipouri began by underlining the South Caucasus’ geopolitical and geographic significance due to its location between the Black and Caspian Seas. The South Caucasus region compromises of Armenia, Azerbaijan, and Georgia, and is a crossing point between the Middle East, Europe, and Asia. According to Monshipouri, “it is a region of competition and conflict of interests between Russia, Turkey, Iran, the EU, and the US.”

The Soviet legacy has left this region with a weak economy, endless conflicts, and no democratic credibility. Azerbaijan is the only oil and gas-rich country in the region, while Armenia and Georgia are reliant on Russia, Iran and Azerbaijan for oil and gas. Azerbaijan has become a very important player in the region, causing Russia to worry over its effect on the Russian oil and gas industry. Monshipouri observed that competition in the region leads to lack of cooperation among the countries in the region.

He also highlighted the role of Turkey in the regional geopolitics. “Turkey is the land connector for the transfer of oil and gas to Europe.” As stated by Monshipouri, 72 percent of oil and 73 percent of gas from the region to Europe goes through Turkey. As an energy hub, Turkey has become a key EU energy supplier and possesses one of the largest energy markets in Europe.

On Iran’s strategy in the South Caucasus, Monshipouri remarked that it has always been driven by geopolitical, rather than ideological, considerations. Iran has maintained a neutral stance regarding the tensions and confrontations between Azerbaijan and Armenia. He used the term “positive neutrality,” coined by political scientist Keyhan Barzegar, to emphasize Iran’s efforts to mitigate regional crises and its interest in regional stability.

“Iran engages in a ‘outside game’ in which it expresses support for Azerbaijan, another Shia Muslim majority country, while also engaging in a ‘inside game’ in which it expresses sympathy for Armenia.” Two major factors have shaped Iran’s foreign policy in the region: US isolation of Iran through sanctions, and Iran’s adoption of a Russo-centric policy. “Iranians have not been extremely proactive, but rather have reacted slowly to advancements unless their national security is at risk,” Monshipouri argued.

Monshipouri then discussed Iran’s pipelines, stating that the country has proposed many, but the majority have failed to materialize, including: The Nabucco Gas Pipeline, Iran-Armenia-Georgia Gas Pipeline, and Iran-Iraq-Syria Friendship Pipeline. Iran also proposed the Iran-Pakistan Peace Pipeline, but it seems to be inactive as no action has been taken. The failure of the proposals, according to Monshipouri, is due to US sanctions against Iran.

One of the Iranian pipelines currently under construction is the Goreh-Jask Crude Oil Pipeline. This particular pipeline will have the capacity to transfer up to one million barrels of crude oil a day from Goreh in the Bushehr port city in the Persian Gulf to a new oil terminal at Jask in the Sea of Oman. The pipeline will allow Iran to bypass the Strait of Hormuz for its oil exports. It will also provide a shorter route for LNG carries, and enable Iran to compete with Qatar.

Monshipouri expressed uncertainty about Russia’s role in the region, stating that he is unsure if it is a dominant player. Russia, however, is Georgia and Armenia's primary energy supplier. It is not pleased with Iran’s attempts to participate in the energy sectors of Armenia and Georgia. Russia has expressed interest in establishing a north-south corridor with Iran, which would connect it to the Persian Gulf region via Iran. It seeks to balance the growing influence of Turkey in the region and ending the US intervention in the Caucasus.

Turkey meanwhile has entered the South Caucasus power equation by supporting Azerbaijan in the war against Armenia. With the defeat of Armenia and Azerbaijan’s control on Nagorno-Karabakh, there is a possibly that there would be a direct corridor of connection between Azerbaijan, Nakhchivan, and Turkey called the Zangezur Corridor. Recently the two countries signed the Shusha Declaration and discussed the possibility of establishing a direct and new land connection with Azerbaijan, Caspian Sea, and Central Asian Republics. This would likely reduce Turkey’s reliance on Iranian and Russian gas and oil, while also bringing it closer to its goal of becoming a regional energy hub.

The second Nagorno-Karabakh war in 2020 between Armenia and Azerbaijan presented Iran with a new challenge, primarily a shift in the regional power balance. Before the ceasefire agreement, Iran provided the only overland connection between Azerbaijan and its Nakhchivan exclave. Azerbaijan, however, will have direct connection with Nakhchivan as a result of its victory in the war. The Shusha Declaration, as stated above, will also connect Turkey with Azerbaijan without needing both to pass through Iran. As a result, Turkey will be the primary beneficiary of gaining access to Nakhchivan, and thus Azerbaijan. According to Monshipouri, Iran will suffer a significant loss due to loss of transit income, and the move also indicates that Iranian direct control over Armenia appears to be in jeopardy.

Monshipouri discussed two perspectives when addressing the question, “Is the Great Game over?” The first argues that it is over, and Iran is entering the Eurasia Economic Union (EAEU) alongside Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. Others have argued that it is an old game, and the new Great Game is the “One Belt One Road Initiative” by China. Scholars who support this perspective believe that Iran and Russia are likely to collaborate on alternative transportation routes, such as the north-south corridor. The main issue, according to Monshipouri, is that many countries in East and West Asia, as well as Southeast Asia, are hesitant to work with Iran due to sanctions. The second perspective is that the Great Game has intensified more than in the past. “Turkey, in the South Caucasus, is playing it with conviction, purpose, and strategic patience, and Russia is exploiting it by remaining relevant if not the most dominant player.” Iran, however, is inconsistent and reacting to it.

He concluded his talk by stating that Iran’s hand in the South Caucasus region contains few winning cards. Russian and Iranian interests are more likely to clash than overlap. Russia has also defined its economic and trade interests to be more aligned with those of Turkey than with those of Iran. He predicted that the Zangezur Corridor project will obstruct Iran’s transit routes. Finally, Monshipouri emphasized the significance of the recent JCPOA talks in Vienna, saying that “resolving problems with the West will unlock Iran’s maximum economic potential and political opportunities in the South Caucasus region.”