U.S. and Iranian Strategic Competition: Turkey and the South Caucasus

The Burke Chair in Strategy at the CSIS has released a comprehensive report detailing the US-Iranian strategic competition in Turkey and the South Caucasus. This report describes the economic and political relationships, Iranian and US influence, energy resources, and competition in four states, Turkey, Armenia, Azerbaijan, and Georgia. The report includes updated figures and maps displaying US and Iranian trade to these countries, energy locations, and oil and gas pipelines.

The new report is entitled, “US and Iranian Strategic Competition: Turkey and the South Caucasus” and is available at the CSIS website at: http://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/130206_turk_casp_chap9.pdf.

It discusses the current challenges to the US in its competition with Iran in relation to these states. As such, Turkey is the main arena of competition between Iran and the US in this region. While in the past the US was concerned that Turkey had moved away from the West, the Civil War in Syria and Iranian support for President Bashar al-Assad has reinforced Turkey’s connections to NATO and the US.  Turkey also represents one of Iran’s few economic outlets as both a trading partner and as a way to reduce its international isolation.

Turkey has been careful to avoid provoking Iran by taking a decisive stand on its nuclear program, but does differ sharply from Iran over its support of Assad in Syria, nor does it want to see Iran increase its role in Iraq, and recognizes the potential threat a nuclear Iran would pose to the region. Turkey agrees with the US that an Iranian nuclear weapon would be detrimental to the security of the region but does not believe that military strikes or continued sanctions will prove helpful for resolving the issue.

The southern Caucasus states - Armenia, Azerbaijan, and Georgia - represent one of the newest fronts in US-Iranian competition and remain a relatively minor point of contention within the broader US-Iranian strategic competition. The US has three primary geopolitical objectives in the Caucasus: security and stability, democratization, and economic access, to both the region’s underutilized natural resources and the nascent infrastructure corridor for transporting Central Asian products west.

Armenia is the South Caucasus state with the deepest ties to Iran. Armenia is a weak state with an unsettled banking sector, unmet energy needs, and commerce based on gray- and black-market trade. Armenia has occasionally facilitated Iran’s entry into global markets, despite Yerevan’s protests and occasional efforts to the contrary. Iran recognizes Armenia as a critical country for its own needs and as a geographically isolated state that can benefit from growing ties to Iran.

Azerbaijan fears that political Shiism will undermine its legitimacy and underpin a viable opposition and regularly charges Tehran with backing preachers and religious extremists in Azerbaijan, claiming Tehran aims to overthrow the Aliyev regime. Iran, in turn, sees Azerbaijan’s ethnic focus as an attempt to foment secession among Iran’s ethnic minorities, and views Azerbaijan as aggressive in bringing in outside powers and claiming mineral rights in the Caspian.

The Republic of Georgia plays a smaller role in US-Iranian competition. It faces its own territorial disputes over separatist regions, focusing national politics and attention on Abkhazia and South Ossetia, and reducing its role in international disputes unrelated to these territories. Georgia now sees itself caught between increasing US pressure on Iran and the commercial and strategic possibilities in an improved relationship with Iran. It is unclear what direction Prime Minister Ivanishvili will seek for Georgia, but it is unlikely either side will put much attention into this aspect of the relationship.

Table of Contents

EXECUTIVE SUMMARY    II

Turkey    II

Turkey’s Relations with the US and NATO    II

Turkey and European Energy Security    III

Turkey’s Relations with Iran    III

Differences in the US and Turkish Approach to the Iranian Nuclear Program    V

Implications for US Policy    V

The South Caucasus    VI

Implications for US Policy    X

TURKEY    1

Turkish Relations with the US    2

US-Turkish Military Cooperation    3

NATO-Turkish Military Cooperation    4

Issues in US-Turkish and NATO-Turkish Military Relations    5

Turkey’s Role in Natural Gas and Oil Transportation and European Energy Security    14

Oil    14

Natural Gas    14

Turkey’s Relations With Iran    28

Turkish-Iranian Political Relations and Military Cooperation    28

Turkish-Iranian Economic Relations    29

Recent Issues in Turkish-Iranian Relations and the Civil War in Syria    32

Differences in the US and Turkish Approach to the Iranian Nuclear Program    39

Turkish vs. US Views of Iran’s Nuclear Threat    40

Turkey’s Focus on Regional Economic Integration vs. the US Focus on Sanctions    41

Turkish Efforts to Mediate a Solution to Iran’s Nuclear Program    42

Implications for US Policy    43

SOUTH CAUCASUS    46

Inter-State Dynamics    46

Status Quo    47

US Interests in the South Caucasus    51

Iran’s Activities in the Caucasus    52

ARMENIA    53

US-Armenian Relations    54

Basis of Relations    56

Points of Dispute    58

US Concern over Armenian-Iran Relations    58

Iranian-Armenian Relations    64

Energy    65

Banking    66

Policy Implications    69

AZERBAIJAN    70

US-Azerbaijani Relations    70

Azerbaijan’s Territorial Objectives and Energy    71

Pipeline Politics    72

Points of Dispute    72

US Concern over Azerbaijan-Iran Relations    74

Azerbaijani-Iranian Relations    79

Ethnic Tensions    79

Trade Ties    80

Azerbaijan-Israel Relations and Religious Disputes    81

Energy Divisions in the Caspian    83

The Military Problem in the Caspian    85

Policy Implications    89

GEORGIA    90

US-Georgia Relations    90

Basis of Relations    91

Points of Dispute    91

US Concern over Georgia-Iran Relations    92

Georgian-Iranian Relations    95

Policy    98

Implications for US Policy    99


This report is part of a comprehensive survey of US and Iranian competition, it is currently being updated, and the revised versions will appear shortly. The current version does, however, provide an analysis that is current in most respects.

Comments and suggestions would be most helpful. They should be sent to Anthony H. Cordesman at acordesman@gmail.com.

This report is part of a series of chapters in an electronic book on US and Iranian competition. Other chapters include:

I. Introduction

II. Types and Levels of Competition - This chapter looks at the various arenas in which Iran and the US compete for influence.

III. US and Iranian Strategic Competition: The Conventional and Asymmetric Dimensions - This chapter looks at Iran’s military forces in detail and the balance of forces in the Gulf region.

IV. US and Iranian Strategic Competition: The Missile and Nuclear Dimensions - This chapter looks at Iran’s missile and nuclear forces.

V. U.S. and Iranian Strategic Competition: The Sanctions game: Energy, Arms Control, and Regime Change - This chapter examines the impact of sanctions on the Iranian regime, Iran’s energy sector, and the prospects for regime change in Tehran.

VI. US and Iranian Strategic Competition in the Gulf States and the Arabian Peninsula - This chapter examines the competition between the US and Iran and how it affects Yemen, Saudi Arabia, Bahrain, Kuwait, the UAE, Oman, and Qatar.

VII. Iraq After US Withdrawal: US Policy and the Iraqi Search for Security and Stability - This chapter examines in detail the role Iran has played in Iraq since 2003 and how the US has tried to counter it.

VIII. US and Iranian Strategic Competition: The Proxy Cold War in the Levant, Egypt and Jordan - This chapter examines US and Iranian interests in Israel, Jordan, Lebanon, the Palestinian territories, Egypt, and Syria.  The military balance is also analyzed.

X. Competition in Afghanistan, Central Asia, and Pakistan- This chapter examines the important role Iran plays in the ongoing conflict in Afghanistan and how the US and Iranian rivalry affects Afghanistan, Pakistan, and Central Asia.

XI. US and Iranian Strategic Competition: The Impact of China and Russia - This chapter examines the complex and evolving relationships between China, Russia, Iran, and the US.

XII. US and Iranian Strategic Competition: Competition Involving the EU, EU3, and non-EU European States - This chapter looks at the role the EU, and in particular the EU3, has played as the US’s closest allies in its competition with Iran.

XIII. US and Iranian Strategic Competition: Peripheral Competition Involving Latin America and Africa - This chapter examines the extent and importance of the competition between the US and Iran in the rest of the world.

XIV. Policy Implications