Turkey-Azerbaijan: Not Only Energy Affair – Analysis

By Kerim Has*

Despite the complexity of regional dynamics, Turkey and Azerbaijan have succeeded to intensely improve their relations throughout the last quarter of century. Following the collapse of the Soviet Union, one of the regions Turkey discovered after a long period of time was the Caucasus, alongside the Central Asia with its close historical, ethnic, cultural, linguistic and religious ties. Azerbaijan’s geopolitical and strategic location thereupon allowed and paved the way for Turkey to reach beyond the Caspian Sea and increase its long-time backward relations with the countries in the region in various spheres, including energy, commerce, and transportation. Notwithstanding the fact that Turkey and Russia heretofore have sided with different parties between Azerbaijan and Armenia over the Nagorno-Karabakh dispute, Ankara and Baku both could have found ways to overcome their territorial limitations (Turkey borders Azerbaijan only through its exclave, Nakhchivan), and at the same time to advance the relations with Moscow.

However, Turkey and Russia’s recent tense relations mostly derived from asymmetric interests in the regional conflicts from the Middle East to the Black Sea with a sustained understanding of an historical background of rivalry, and specifically emerged this time with downing of a Russian bomber by a Turkish jet on 24^th November 2015 over the Turkey-Syria border, and likely to escalate more taking the diverging and increasingly opposing positions to each other in the Syrian crisis into account, seem to have spillover effects also on the South Caucasus and particularly on Turkish-Azerbaijani ties.

Politically Azerbaijan has always been the closest to Turkey country and administration among the post-Soviet republics. During the first years after the Cold War, the bilateral relations were formulated under the popular motto “one nation, two states”, which mainly reverberated the enthusiasm in Turkish foreign policy at that time, rather than reflecting a wise and comprehensive strategy for upgrading the relations beyond the realities. Ankara established diplomatic ties with Baku faster than any other country in early January of 1992, following the recognition of Azerbaijan’s independence, just the day after the signing of the Belavezha Accords on December 8, 1991.

Throughout the 1990s Turkey has endeavored to integrate Azerbaijan into the Transatlantic and European political, security, and economic institutions. As a newly independent state, Azerbaijan also needed to constitute such ties with the remaining part of the world beyond the post-Soviet territory. As most of the other former Soviet republics, Baku took a seat in Organization of Islamic Cooperation (OIC) in 1991, became a member of Organization for Security and Cooperation in Europe (OSCE) in 1992, signed the Partnership for Peace Framework Document with NATO in 1994, and was included in the TACIS program with the TRACECA and INOGATE projects of the European Union. Out of these, Baku also joined the Turkey-backed regional initiatives, Organization of the Black Sea Economic Cooperation (BSEC) and Economic Cooperation Organization (ECO) in 1992.

In all of these integration processes, Turkey encouraged Azerbaijan while it was emerging as a relatively new and sufficiently powerful ‘political subject’ in international relations. By becoming a part of these international political and economic communities, on one hand, Azerbaijan has adapted to the new conditions and its geopolitical environment in an easier way; on the other hand, aimed to get support from leading global and regional organizations and actors on its dispute over Nagorno-Karabakh with Armenia. Turkish authorities have always interpreted Armenia’s occupation of Azerbaijan territory, including Nagorno-Karabakh and seven other districts, not just through the prism of a foreign policy issue, but rather like a domestic problem, which found highly enough support from Turkish people as a consolidating factor. In a similar vein, Turkey not only tried to extend its regional influence by defending Baku’s position and standing up for its brother country in international diplomatic platforms, but also promoted and circulated widespread in the political lexicon its newly-defined interests in a broader territory from the South Caucasus to the Central Asia under Turkic-solidarity.

Ankara’s ambitious efforts to strengthen these relations with these post-Soviet regions were embodied with the summits of Turkic-speaking countries in 1992, which more or less worked efficiently till the mid-1990s. Azerbaijan played a key role during these summits and gave Turkey room to much maneuver in its foreign policy activities at that time. However, later on it became clear that none of these former Soviet republics needs a new ‘big brother’ to replace USSR/Russia. Non-binding provisions of the summits reflected that these newly independent states much more interested in equal cooperation and partnership with Ankara, other than running after unrealistic goals such as a creation of a union of Turkic-speaking countries with a kind of a political body under Turkey’s leadership. By facing this fact sooner rather than later, since the mid-90s Turkey has begun to follow a more pragmatic and realistic policy regarding the Caucasus and Central Asia, concentrating on concrete projects, primarily in energy and trading.

One of the main components of relations between Turkey and Azerbaijan appeared in the energy sphere in 1994 by signing a contract about the Western-backed Baku-Tbilisi-Ceyhan project, the first bypassing Russia oil pipeline in post-Soviet territory after the Cold War. It was the first ‘game changer’ move, not only in links between Azerbaijan and European countries, but also in Moscow’s energy relations with the West actually. And exactly because of this reason, the project had to wait for a long time to be realized, and the oil pipeline began to operate just in 2006. Especially after this moment, Turkey-Georgia-Azerbaijan trilateral relations has gained a strategic character and also become vital for many Western partners. In the course of time, Turkmenistan and Kazakhstan also started to pump oil to the pipeline, which gave an opportunity for diversification of oil export routes for these countries positioning Turkey in a more central role in their foreign and energy policies. Having mainly a transit country role for Azeri oil, Turkey imports almost 10 percent of its total oil consumption from Kazakhstan by now. On the other hand, Azerbaijan has accelerated its investments in Turkey’s oil sector in recent years. Having acquired control of Petkim Holding, the leading petrochemical firm in Turkey, in 2008, Azeri state energy giant SOCAR is planning to invest $10 billion more in Turkish petrochemical market till 2023. After the construction of Star refinery in 2018, SOCAR will also be able to refine Azeri, Russian and Iraqi oil at the plant in Turkey. Evolving of the energy relations between Turkey and Azerbaijan into a cooperation of long-term investments forces both to pay more strategic importance to the bilateral ties.

The energy sphere is the driving force of the trilateral strategic cooperation between Turkey, Georgia, and Azerbaijan, which also has implications for Europe. In that context, Azerbaijan’s gas reserves in Caspian Sea have also had a critical role for both Turkey and the European countries. With the operation of Baku-Tbilisi-Erzurum natural gas pipeline in late 2006, the strategic energy balance in the South Caucasus has substantially begun to change. Western-backed pipeline broke the hegemony of Russian energy power projections in the region. Azerbaijan is already supplying 12 percent (6 billion cubic meters) of Turkey’s total gas imports, and emerges as the third main gas supplier for Turkish market now, after Russia (%55) and Iran (%18).

Importing 99 percent of its gas needs from abroad, Turkey needs to diversify its gas supply routes for both possible political and economic reasons. Monopoly in energy relations creates obstacles in front of pricing. And also the political risks make the energy relations vulnerable, and Turkish-Russian partnership is not an exception. For that reason, strengthening the energy links with Azerbaijan through new projects such as TANAP was evaluated as a “necessity” from Ankara’s perspective even before the recent aircraft crisis with Moscow. However, after the aircraft crisis, Turkish authorities began to see the TANAP project not through a prism of various different “preferences” but as a “must” for energy diversification strategies, and agreed with Baku on speeding up and finalizing the project in early 2018.

TANAP project with its further TAP foot from Greece to Italy paves the way to Turkey and Azerbaijan to diversify their export-import routes while also mitigating Europe’s dependency on Russian gas. After the operation of TANAP and further infrastructure expansion of the pipeline, Turkey’s dependency on Russian gas can decline to the level of 40 percent by 2026. Even if the other possible suppliers such as Israel, Cyprus, Iraqi Kurdistan, and Qatar are going to be included into the “gas game” in the region in the following years, Russia’s energy leverage over Turkey can be bounded in a significant extent.

Azerbaijan, Georgia and Turkey are also interested in enhancing their transportation routes. Planned to be open in 2016, Baku-Tbilisi-Kars railway project will directly connect three countries and supply energy transfer by rail also. Furthermore, it will serve to increase the trade between Central Asian countries and Turkey, offering a more advantageous route than via Russia or Iran in economic terms.

It’s a fact that Turkey’s relations with Russia always had direct implications on Ankara’s links with the post-Soviet republics. When Ankara had better relations with Moscow, it could get access to the South Caucasus and Central Asia in an easier and more effective way. One of the main reasons of failing of the Turkic-solidarity project in 1990s was the continuing role of Russia in these countries. Just after the mid-2000s, when Ankara improved its relations with Moscow, Turkey’s ties with these countries began to be updated and became stronger. Summits with Turkic-speaking countries were renewed and later transformed into The Cooperation Council of Turkic Speaking States (Turkic Council) in 2009 with less politically ambitious goals. Apart from Turkey and Azerbaijan, Kazakhstan and Kyrgyzstan have a seat in Turkic Council, which both formally and informally differs from the first attempts of Ankara in the beginning of 1990s. Even though Uzbekistan cautiously approaches to the Council and Turkmenistan still prefers bilateral axis to the multilateral format of relations, in any case, the Council gives an opportunity for Turkey to promote its energy and economic links with these countries.

As in the case of the creation of the Turkic Council, Turkey could have institutionalized its ties with post-Soviet republics followed by a positive momentum in relations with Moscow during the 2000s. After establishing a High Level Cooperation Council with Russia in 2010 functioning like a joint cabinet of ministers of both countries, Turkey realized similar mechanisms with Azerbaijan (2010), Kyrgyzstan (2011), and Kazakhstan (2012). These mechanisms facilitate to boost the political ties and economic activities between the countries. Turkish and Azeri leaders signed 30 agreements just during the meetings of the first three years after activating the High Level Strategic Cooperation Council.

Today, these Turkish-Azerbaijani relations are passing through a new test with the deterioration of relations between Ankara and Moscow after 24^th November 2015. The aircraft crisis seems to affect the position of Turkey not only in the South Caucasus, but in Central Asia as well. Azerbaijan, Kazakhstan and Kyrgyzstan do not want to be forced to prefer one or another partner between Turkey and Russia. Staying in between two allies is harder for them than for any other country. Especially, Russia’s increasing military presence and activities in Armenia in recent months and opening new credits on buying Russian military equipment by Erevan wonder Azerbaijan more, and pushes Baku to keep close military and economic ties with its northern, geographically natural and strategic neighbor. A peaceful resolution of the Nagorno-Karabakh conflict seems to be delayed due to this military up-building in the South Caucasus and diminishing political trust between not only direct parties of the dispute but also possible and necessary mediators, Russia and Turkey. On the other hand, Baku demonstrates solidarity and shares Ankara’s concerns on its energy needs and tries to overcome this tension with a possible mediation in Turkey-Russia crisis. Time will show soon whether the “realpolitik” made a comeback again in Turkish-Russian relations, beginning not only in the Middle East politics, but also in the South Caucasus because of the region’s close neighborhood to both actors.

Note: This piece first appeared on the web site of the Russian International Affairs Council (RIAC) on 9 March 2016.