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On August 12, five nations resolved a twenty-seven-year-old dispute over how to divide up the oil and gas reserves contained in the Caspian Sea. The treaty, signed in the Caspian coastal city of Aktau, Kazakhstan, ends a spat over whether the Caspian is a sea or a lake, and clarifies the maritime boundaries of the surrounding countries.

Under the agreement, the Caspian, which is landlocked and, therefore, technically a lake, now has “special status.” This issue, of how to designate the Caspian, was an important one. Whether a body of water is called a “lake” or “sea” has consequences for control of its water and soil. In a lake, each neighboring country has control only over the water and soil along its coastline for 15 nautical miles (17.3 miles). The rest of the water and the soil is communally owned with other neighboring, coastal countries, and the raw materials must be distributed fairly. A sea is divided according to the law of the sea, which means that the length of the coastline determines the distribution of the entire seabed (see maps below).

Defining the Caspian Sea: A Sea or a Lake? (Image source: Heritage Foundation research)

Defining the Caspian Sea: A Sea or a Lake? (Image source: Heritage Foundation research)

Under the rubric of this special legal status, each country that borders the Caspian is now authorized to lay offshore pipelines with consent needed only from the affected neighboring states, rather than from all Caspian Sea nations. Negotiators from the five countries also agreed to build a pipeline between Turkmenistan and Azerbaijan so that more oil and gas can be transported from Central Asia to Turkey and Europe.

According to U.S. Geological Survey data, the territorial dispute has prevented the exploration of at least 19.6 billion barrels of crude oil, 243 trillion cubic feet of natural gas, and 9.3 billion barrels of natural gas liquids. Azerbaijan, Iran, Kazakhstan, the Russian Federation, and Turkmenistan had tried to define the Caspian Sea’s legal status, ever since the collapse of the Soviet Union in 1991. Before that date, Iran and the Soviet Union shared the Caspian’s resources between themselves.

Although a regional agreement, there is an international geopolitical spin to this initiative. The treaty prevents non-Caspian countries from deploying military forces on the body of water. This is clearly a jab at the United States, which sends supplies to its troops in Afghanistan through the Caspian.

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