The Black Sea: Oil over troubled waters

A great game unfolds between America and Russia

IN CLASSICAL times, the Black Sea was perversely known as the Euxeinos Pontos, a sea friendly to strangers, even though its notoriously turbulent waters were nothing of the kind. The hope was that if you gave the place a nice name, the invisible powers who governed its towering waves might feel placated and behave more calmly. To this day, it remains a temperamental stretch of water that can generate sudden squalls and treat outsiders in unpredictable ways, even when efforts are being made to appease its restless spirits.

In 1992, the late Turkish president, Turgut Ozal, thought he could assuage those spirits for ever and turn the sea into a zone of peace and co-operation, where ancient trade routes would thrive anew. The fruit of that post-cold war vision is the Istanbul-based organisation for Black Sea Economic Co-operation. For over a decade, its members (all the littoral states, plus near neighbours Greece, Moldova, Albania, Armenia, Azerbaijan and, as of recently, Serbia) have trundled along to meetings without ever realising Mr Ozal's vision. The fact that Armenians and Azeris were locked in armed confrontation, backed respectively by Russia and Turkey, has hardly helped.

About a month ago, and entirely unnoticed by the world, BSEC suddenly did something rather unfriendly to a stranger. It flatly turned down a request from the United States for observer status. While the brush-off was explained in arcane procedural terms, it was an open secret that Russia had blocked the application - to the embarrassment of the group's other ex-communist members. In fact, eight of them issued a separate statement saying Uncle Sam's presence would have been a welcome boost, and they regretted his exclusion. (If NATO members Greece and Turkey had any feelings on the matter, they did not air them.)

What America would have done if it had attained its lofty ambition may never be known. But to judge by the word on the think-tank circuit, there is a strong feeling in Washington that the Black Sea region is ripe for transformation into a new sort of security club, whose members co-operate to keep ports and pipelines safe from terrorists and other undesirables.

As steadily increasing amounts of energy flow into, and out of, the Black Sea, the stakes are certainly high. This week saw the formal opening, in Azerbaijan, of one of the world's most important energy conduits, a 1,770-km (1,010-mile) oil pipeline linking Baku in Azerbaijan with the Turkish port of Ceyhan via the mountains of Georgia. Gas from Azerbaijan, Iran and possibly east of the Caspian will soon be flowing along a similar route into Turkey, and thence to south-eastern Europe. The pipeline promises to bring a bonanza for Azerbaijan, and a modest boost to the hard-pressed finances of Georgia.

While America has taken the lead in lobbying for the construction of pipelines which bypass Russia, and therefore deny the Russians any chance to use energy as a political weapon, it is the European consumer who will be most affected by these emerging routes. On present trends, Europe's reliance on Russian energy will increase sharply, whatever happens; the new pipelines will ease that dependence.

But a complex pattern of interests is already emerging. A recently constructed gas pipeline has started bringing energy across the Black Sea from Russia to Turkey. That has reinforced a burgeoning economic relationship between those two historic competitors and made it harder for the Turks to side unequivocally with the Americans if the contest for influence in the Black Sea ever becomes a straight fight between America and Russia. Indeed one school of thought in Washington regards the “old NATO” partners, Turkey and Greece, as less reliable than the eagerly pro-American countries that have only recently emerged from the grip of communism, and are poor and vulnerable enough to be grateful for anything they get.

One reason for heightened American attention to the region is the sense that the future of many countries is still a wide-open question: they could follow Central Europe into the warm embrace of western institutions or they could slide back into authoritarianism or stagnation. Bruce Jackson, an influential American lobbyist for NATO's expansion, put the point dramatically in some congressional testimony in March: “The democracies of the Black Sea lie on the knife-edge of history which separates the politics of 19th-century imperialism from European modernity.”

The very fact that some parts of the region are quite advanced on the road to “European modernity” could be a divisive factor. One of the BSEC's more effective bits is its financial arm, the Black Sea Trade and Development Bank, which issues credits for export finance and cross-border projects. Its strategy director, Panayotis Gavras, says much the biggest factor driving investment in the region is proximity to the European Union; investors look eagerly at Bulgaria and Romania, which stand on the Union's threshold, and view other places far more warily.

As Britain prepares to take over the EU's rotating presidency, many people are expecting a fresh Black Sea initiative: something that would give heart to countries doing “well” in western eyes without dashing the hopes of the laggards and, if possible, without alienating Russia.

As Foreign Office mandarins ponder their options, they can take heart from some of the region's pleasant surprises. On June 6th, BSEC members will gather in Yerevan, the capital of Armenia, for a meeting of their affiliate bank. According to Turkish data, trade between Armenia and Turkey is precisely zero; the border is sealed, out of solidarity with Azerbaijan. As the delegates will observe, every shop in Yerevan brims with Turkish goods.