The post-Soviet region has begun a high stakes arms race, fueled by competition for recently discovered oilfields. Intraregional competition is intense, along with a mutual desire between Russia and Iran to keep foreigners (Europe and the United States) from interfering.

While the international community works on deterring Iranian nuclear proliferation, the materiel buildup in Central Asia has garnered minimal attention. The vast geostrategic significance of the Caspian Sea is en route to becoming a future flashpoint with a first class security dilemma, according to Foreign Policy magazine.

Oil politics are behind yet another burgeoning arms race, this time in the long overlooked Caspian Sea. Five coastal states are now competing to lay claim to the hydrocarbons it promises — and in a region where Iran and Russia have traditionally dominated, the post-Soviet states of Azerbaijan, Kazakhstan and Turkmenistan are building up military capabilities of their own.

Despite all player states officially calling for solidarity on demilitarizing the Caspian, there is an oil funded buildup of ships — and suspicion, particularly because of uncertainty about how each player will respond to a given situation.

The United States have vowed to expand their influence in the area with the aim of supporting the smaller states against Iran and Russia.

Analysis

A regional issue that has been under the radar, it will likely have a wide impact however it resolves.

Energy politics already are a major driver in Central Asian politics and the continuing revelations about Caspian Sea resources will only amplify this process.

As is often the case, the players want to minimize the military aspect while unable to trust each other enough to effectively do so. This situation combines several international dynamics: Russia and its near abroad, Iran, Muslim versus non-Muslim states, Muslim sectarian differences, oil policy and environmental concerns.

Outside players such as China and the United States will also show great interest. China especially may see this as a way to get vital resources without depending on maritime routes that can be challenged by the United States and with less interaction with the volatile core of the Middle East.

Wikistrat Bottom Lines

Opportunities

• A peaceful and organized development of this region would assist regional growth and political ties.
• If Russia can take the lead, it will boost its presence and influence in the region and even with China.

Risks

• If this is mismanaged, it could lead to serious divisions and conflicts. If outside powers push too hard to get a useful outcome, they could compel the involved states to close ranks against them.

Dependencies

• How easily can the resources be extracted? Can these states work together to further their mutual interests?

Michael Breen, Russ Glenn, Richard Ingebretsen, Jesse Parent and Joshua Propp contributed to this analysis.