Sputnik| Anastasia Dmitrieva: The Convention on the Legal Status of the Caspian Sea will facilitate Tehran�s energy cooperation with Ashgabat and Astana and help export Iranian oil and gas products after the reinstatement of US sanctions, experts told Sputnik.




The status of�the oil-and-gas-rich Caspian Sea was regulated by�agreements reached between�Iran and the Soviet Union until�the dissolution of�the latter, followed by�the emergence of�newly independent states surrounding the body of�water, namely Azerbaijan, Kazakhstan, Russia and Turkmenistan, who had managed to�reach the agreement after�over 20 years of�diplomatic efforts.

The recently signed convention closed the door to�this uncertainty by�dividing the seabed and subsoil between�the five littoral states on�the basis of�international law, while the major surface of�the sea will be shared. The document regulates such issues as�fishing and pipeline construction, establishes rules for�maritime navigation in�the sea, and bans any activities threatening the sea's biological resources.

Caspian Deal Opens Opportunities for�New Energy Projects

The signing of�the Convention on�the Legal Status of�the Caspian Sea opens up�great prospects for�cooperation in�the fuel and energy sector, according to�the experts.
"The Convention on�the Caspian Sea signed on�12 August 2018, in�Aktau, Kazakhstan [�] opens major economic possibilities. Most important, an estimated 68 billion barrels of�oil and 535 trillion cubic feet of�natural gas in�proved and probable reserves may be available for�extraction by�the five countries. In addition to�easing domestic energy costs for�those nations, commercial exploitation presents the possibility of�the region becoming a pivotal player in�global supply if the signatories act cooperatively for�mutual benefit," Dr. Jamsheed K. Choksy, the chair of�Department of�Central Eurasian Studies at�Indiana University, told Sputnik.


In particular, the Caspian Convention may give a new impetus for�building the Trans-Caspian pipeline, which will help transport the region�s gas through�Azerbaijan to�new markets in�Europe, bypassing Iran and Russia.
"The agreement may lead to�more cooperation between�Iran and Turkmenistan, and Iran and Kazakhstan. They are both land-locked countries and wish to�export their oil and gas. There has been much talk about�Trans-Caspian pipeline," Muhammad Sahimi, the NIOC Chair in�petroleum engineering at�the University of�Southern California, told Sputnik.


In November, the signatories are set to�gather in�Azerbaijan to�hold the first meeting of�a working group on�implementation of�the convention, which in�the long run will integrate the whole region, according to�another expert.
"The Convention will help to�improve the relations between�all of�the states and help to�integrate the region. It�s something that benefits all from�all sides of�the Caspian. I hope that cooperation will help to�improve the environment as�well, while also enhancing energy cooperation," Mohammad Marandi, a professor at�the University of�Tehran, told Sputnik.


The convention on�the Caspian Sea was hard to�agree due to�the fact that its legal status as�either a sea or a lake was to�be determined; the two bodies of�water are regulated by�different provisions of�international law.

Iran�s Exports Fall in�the Face of�US Sanctions

The signing of�the Caspian convention comes at�a time when Iranian oil exports are about�to be seriously undermined due to�US sanctions, the first set of�which was implemented on�August 6. As the result, Iran�s oil production fell by�56,300 barrels per day to�3.73 million barrels per day in�July. The US sanctions are expected to�extend to�the Iranian energy sector and cover the purchase of�petroleum and petrochemical products from�Iran.
"Some of�the importing countries cut back their imports from�Iran, and it takes time to�replace them. By swapping oil and natural gas with�its neighbors to�the north that are signatories to�the Caspian Sea agreement, Iran will effectively be exporting its oil even in�the face of�US sanctions," Sahimi said.


One of�the solutions for�Tehran to�restore its exports would be to�connect to�the proposed Trans-Caspian pipeline, which will be "political benefit for�Iran by�making it part of�a pipeline that Europe needs," the NIOC chair in�petroleum engineering added.
"This is a purely political line because the more economic route is through�Iran. The main obstacle to�a route through�Iran has been the United States," Sahimi argued.


However, it remains unclear how Azerbaijan, Kazakhstan, and Turkmenistan plan to�swap oil and gas with�Iran under�threat to�be sanctioned by�the United States. US President Donald Trump previously warned that the United States would cut trade ties with "anyone doing business with�Iran."
"[The three states] definitely cannot afford to�circumvent the American demand-and covert trade between�Iranian companies and organizations in�those three Caspian states and from�there to�the west or the east will not make a fundamental difference to�any economic sectors," Choksy warned.


The professor explained that in�order for�the Caspian regional grouping to�help partially offset the impact of�US sanctions and set up�trading routes to�Europe and Asia, Tehran would still need to�negotiate with�Washington, a step they repeatedly refused.
"[Iranian President Hassan] Rouhani administration in�Tehran will have only a short timeline to�demonstrate the Convention is a positive step for�the Islamic Republic, and the US administration is likely to�act to�block any gains to�Iran from�the Convention. For the Convention on�the Caspian Sea to�achieve its full potential and benefit the five signatory nations and the world, Iran needs to�settle its disputes with�the US," Choksy concluded.


The United States is set to�introduce secondary sanctions against�countries that will continue to�import oil from�Iran after�Washington reintroduces sanctions on�Tehran on�November 4, according to�the US Department of�State.