As Soviet-era strongmen fade, Caspian unrest grows

Russian President Vladimir Putin endorsed Aliyev's candidacy and welcomed his election last week. The United States has refrained from strong statements about reports of electoral irregularities.

"Everyone just wants stability in the region," says Sergei Kazyennov of the Institute of National Security and Strategic Research in Moscow. "The US is tied down with Iraq. The region is too fragile, and it would be a bad idea to make waves there."

No one is sure how much oil there is in the Caspian basin, now uneasily divided among four post-Soviet states - Russia, Azerbaijan, Turkmenistan, and Kazakhstan - and Iran. Bloated estimates in the 1990s fueled enthusiasm that the region could become a "second Persian Gulf."

But Azerbaijan, where onshore reserves have been tapped since the 19th century, appears to have far less than hoped. Experts now say the entire Caspian basin holds a maximum of 30 billion barrels of crude, comparable to Libya or Nigeria. Still, as the US seeks to diversify its energy sources, Caspian oil may acquire strategic value.

"There is a much more sober view of what this region can produce, and there are many unsettled problems to contend with," says Valery Nesterov of Troika Dialogue, a Moscow brokerage house. "But still, the Caspian will be a very important place in 10 years' time."

One positive development is that Russia appears to have abandoned its hostility to the presence of Western interests. Moscow opposed the Baku-Ceyhan pipeline, fearing that it might eclipse its own, which runs from Baku through Chechnya to the Black Sea. During the 1990s, some experts said that Russia might be stirring up separatist insurrections in Georgia and backing Armenia against Azerbaijan, in order to deter Western oil companies.

"In the past decade, Russia perceived the Baku-Ceyhan pipeline as a real and dangerous threat," says Alexander Iskanderyan, head of the independent Institute for Caucasian Studies in Armenia. "But ... relations between Russia and Azerbaijan have improved, and growing American influence has become a general tendency throughout the former USSR."

Some experts warn that bad times could return if the outside world doesn't act to ensure smoother political transitions in Azerbaijan and Georgia.

"There are signs of potential instability in the region," says Mr. Nesterov. "That's why it's very important that Russia and the US learn to work out their geopolitical differences and let their competition express itself mainly through the marketplace. There is no good alternative."

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