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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Iran Deploys New Warship in Caspian Sea

Now that Iran has made the high-profile deployment of a guided missile destroyer in the Caspian Sea, its neighbors should all be “happy” at the major advancement in regional security.

On 17 March, Iran deployed the domestically built Jamaran-2 guided missile destroyer in the port city of Bandar Anzali in Caspian waters, with President Mahmoud Ahmadinejad overseeing the ceremony in a widely publicized event.

"Without a doubt all neighboring countries are happy with Iranian Navy’s achievements because they consider these advancements as a step towards their own security in the region,” Ahmadinejad said.

This is Iran’s first heavy military deployment in the oil-rich Caspian Sea. Iran’s Caspian neighbors--Azerbaijan, Kazakhstan, Russia and Turkmenistan--are not likely so thrilled to see a 1,400-ton destroyer, complete with helicopter landing pad, surface-to surface and surface-to-air missiles and anti-aircraft batteries in waters that adjoin disputed Caspian oil and gas riches. 

Iran alone is suggesting that the five countries divide up the Caspian Sea equally. But the four others are pursuing mutual pacts for resource-sharing on their own, and this has diminished Iran’s take to about 12%.

The timing is also important, as there have been recent discoveries of oil in these disputed waters, but things have been heating up for a couple of years already.

In 2011, a consortium led by ConocoPhillips (NYSE: COP) hit oil while drilling in Caspian Sea waters offshore Kazakhstan, estimating about 2 billion barrels of recoverable oil.

In June 2012, Iran announced its first oil discovery in the Caspian Sea in more than 100 years, saying it may hold the equivalent of 7% of the country’s known reserves.

Since the breakup of the Soviet Union, the maritime borders of the Caspian Sea have been in dispute. Iran wants to see each of the five countries get one-fifth of the area. The other four countries aren’t keen on this because it gives Iran a much larger chunck of the Caspian than is warranted by its coastline length (Iran has the smallest Caspian coastline). But the disputes are certainly not all about Iran.

Here’s where it gets really tricky: Three major fields—Kapaz/Serdar, Azeri/Hazar and Chirag/Osman—are situated almost exactly halfway between Azerbaijan and Turkmenistan, and this is where the situation is most tense at present.

From this perspective, Iran’s audacious warships sends a different kind of message: one of threat over the Caspian Sea resources, rather than one of an answer to regional security.

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There is also another message here that has nothing to do with Caspian oil and gas resources and everything to do with Iran’s military capabilities. The message is that Iran’s nuclear program—which presently does not include nuclear weapons—is a red herring. Iran has made major gains towards building an entirely self-sufficient military and the new Caspian-deployed warship is a testimony to that indigenous prowess. Conventional Iran is the real and present threat to Western interests.

By. Charles Kennedy of Oilprice.com


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