Trans-Caspian Visit

The two states rich in oil and gas fell into a deep economic crisis as a result of more than a twofold fall in oil prices and erroneous economic policies based on the forecast of long-term high energy prices and the construction of an oligarchic economy.

In addition to falling prices for energy resources, both countries have problems with the delivery of the desired volumes of oil and gas to the world markets. Turkmenistan, the main export of which is gas, is limited in gas supplies within 30 bcm a year due to disagreements with Russia, Iran and the refusal of the main importer - China to invest in additional infrastructure for increasing gas imports from Turkmenistan. Azerbaijan has problems with the decline in oil and gas production - to 1.5 million tons and 800 million cubic meters respectively for the first half of this year.

However at the official events in Baku, both leaders showered each other with praises of successful economic development and prosperity, demonstrating an external calm about domestic affairs.

"In recent years, under your leadership, Turkmenistan has passed a successful path of development and has won a high prestige on the international arena. The successes achieved today by your dynamically developing country cover the spheres of state building, social, economic, humanitarian and other areas. We are pleased with these successes of fraternal Turkmenistan," President Ilham Aliyev said.

"Ilham Heydar Oglu, confidently leading the country, has rightly earned respect in the region and the world," Berdimuhamedov noted.

However, it should be noted that the troubled economic situation pushes the parties towards each other. The colleagues are seriously thinking about using bilateral potentials. Turkmenistan is interested in further diversifying routes with the aim of exporting energy raw materials, and especially in the western direction, which, for geopolitical reasons, has so far been blocked. And Azerbaijan expresses a wish in transit of large volumes of Turkmen gas via its territory. In 2016, Turkmenistan delivered 1.5 bcm of gas to Azerbaijan on transit through Iran. Possibilities of land transit are small, and more expensive.

In principle, Berdymuhammedov expressed such interest in his speech in Baku, cautiously noting that it will be implemented taking into account the five-way cooperation of the Caspian countries. The road to the West for Ashgabat is opened by Russia's refusal to purchase Turkmen gas from 2016 and fruitless talks with Iran, which did not extend the agreement on the purchase of Turkmen gas this year. The circumstances are virtually pushing Berdymuhammedov into the bosom of Europe, which, trying to use the moment, has intensified trilateral negotiations with the participation of Azerbaijan and Turkmenistan on the delivery of gas to the European continent at the European Commission level since the spring of last year.

In this situation, two regional players, Russia and Iran, are unlikely to impede the implementation of the Trans-Caspian pipeline, a decision that was adopted back in 1999 at the Istanbul OSCE summit. Their actions over the past couple of years actually create the effect of squeezing Turkmenistan westward. Moscow"s position has changed as a result of lower energy prices and Europe"s gas needs. Russia is most interested in selling its own goods and regards Turkmen gas as competitive ballast. Iran, which is almost the second in the world in terms of gas reserves, is gradually increasing its own production. In addition, both important regional players who previously hampered the construction of the Trans-Caspian gas pipeline, in the circumstances of the crisis, are trying to build more productive relations with the US and the EU.

The implementation of the Trans-Caspian pipeline project is also hampered by a bilateral problem concerning the more than 20-year dispute between the parties about the belonging of a number of fields located far from the Turkmen and Azerbaijani coasts of the Caspian Sea. Although the parties thawed this issue after Berdymuhammedov came to power in 2007, they did not advance a single step towards consensus. However, we must admit that Ashgabat agreed to resolve this dispute in an international court and to take any decision of it, which is a significant step forward.

At the same time, the sides were closer than ever to the denouement of the Turkmen-Azerbaijani conflict knot in the Caspian Sea and to transforming it into a hub of pipeline and transport interchanges and joint projects, including the disputed deposits.