The legal dispute around the status of the Caspian Sea: an international law and economic perspective

January 2024

Valentina Chabert

Ph.D. Fellow in International Law at Sapienza University of Rome

From Russian-Iranian management to the bilateral agreements of the early 1990s, the Caspian water basin has been the subject of a twenty-year dispute regarding the characterization of its legal status as a ‘lake’ or ‘sea’. If since the dissolution of the Soviet Union there have been conflicting visions regarding the division of the respective Exclusive Economic Zones and the exploitation of the rich hydrocarbon deposits of the seabed, the signature of the Convention on the Legal Status of the Caspian Sea in 2018 has put an end to a unidirectional regulatory trend, resolving – albeit only partially – the problem of the delimitation of areas of exclusive sovereignty.

However, numerous legal and economic issues between the riparian States still remain open. Moved by often incompatible interests and aspirations, the competition between coastal states mainly affects the implementation of new energy routes for the transport of Central Asian gas to Europe through the Caucasus, which is potentially capable of compromising Russian dominance in the energy field (Canali and Musesetti 2022).

The origins of the dispute: Russia-Iran competition for the Caspian Sea

Inserted in a vast depression 28 meters below the level of the oceans, with 5970 kilometers of coastline and a maximum depth of 1030 meters, the Caspian Sea is characterized by being the largest internal water basin without emissaries, as well as the third oil field after the Persian Gulf and Siberia and harboring the second largest natural gas reserves in the world, with approximately 3275 trillion cubic meters.

Although the Caspian Sea is subject to a progressive regression due to the crypto-depression of the seabed, the centuries-old geo-economic importance of the area (which has traditionally been subjected to the sphere of influence of the Slavic world, the Persian civilization and the Turkish space) has been the protagonist of the tensions that in the last twenty years have opposed the five coastal states of Russia, Kazakhstan, Turkmenistan, Iran and Azerbaijan.

On the basis of strategic interests, these countries compete for the marine space and the natural resources present in it. In fact, in the aftermath of the dissolution of the Soviet Union, the potential exploitation of offshore oil and gas fields as a driver of the economic development of the newly independent republics of Azerbaijan, Kazakhstan and Turkmenistan has led to the emergence of the question of the definition of legal status of the Caspian Sea.

Traditionally, it is regulated by treaties resulting from a lively bilateral relationship between Iran and the Soviet Union, which has been reinvigorated since the 1920s. The relation dates back to 1732, the year of the signature of the Treaty of Resht between the Russian and Safavid empires, which established the passage of the cities of Derbent, Baku and Makhachkala under Russian territorial hegemony and regulated, at the same time, the freedom of navigation and trade in the Caspian basin and along the Araq and Kura rivers, allowing the passage of Persian merchant ships.

However, decades of cooperation between the two powers were followed by periods of heated military confrontation, which also saw the involvement of Great Britain, France and Germany in support of Tehran. While on the one hand Western support worsened relations with the Russian Empire, on the other hand the success of the Tsarist offensives allowed Moscow to occupy the entire northern Azerbaijan in 1828.

In the same year, the Russian conquest was accompanied by the signature of the Treaty of Turkmenchay, which granted the country the exclusive right to station military fleets on the Caspian Sea. Although the Persians retained the right to commercial navigation, from the first twenty years of the 18th century the Caspian Sea was completely subordinated to Russian jurisdiction, which maintained monopoly rights until the October Revolution (Encyclopaedia Irancia 2024).
The determination of the newly formed Soviet Union to prevent navigation within the Caspian basin to the naval forces of foreign states therefore led to the signature, in 1921, of a Treaty of Friendship with Persia, the implementation of which would have allowed the protection of the Caspian Sea from possible external threats. By abolishing the agreements signed between the two countries in previous centuries, the Treaty of Friendship established respect for mutual maritime borders and the sharing of fishing concessions – until then for the exclusive benefit of the Russian Empire – with the Persian counterpart (Sychev and Volkhov 2024).

Nonetheless, the delimitation of the waters was postponed to a later time, thus leaving the issue unresolved. In this regard, a first mention of a hypothetical legal status of the Caspian Sea was included in a subsequent agreement on the regulation of exploration and scientific research activities in the areas adjacent to the coasts dating back to 1940, by virtue of which the Soviet and Iranian authorities gave start of joint drilling and extraction of hydrocarbons in the open sea. If de jure the sovereignty of the Caspian was reserved to both powers, the de facto situation showed an imbalance in favor of the Soviet Union, which, the year following the signing of the aforementioned agreement, invaded northern Iran with objective of preventing a possible alignment of the Shah with the Axis powers involved in the Second World War.

The dispute over the status of the Caspian Sea and the competition between coastal states emerged again in 1991, when the independent republics of Kazakhstan, Turkmenistan and Azerbaijan claimed the right to exploit Caspian resources and the definition of a shared regime that reflected their strategic ambitions of sovereign countries. A regime which remained uncertain after more than twenty years of stalled negotiations, and which only a weak compromise reached in 2018 has attempted to unblock.

In addition to a marked dispute over gas and oil deposits, the management of water, fisheries and the revenues deriving from the salt industry have in fact accentuated the tensions between the former Soviet Republics and the powers traditionally responsible for the management of the Caspian. In this regard, the management of salt resources in the Garabogazköl bay area has given rise to a dispute between the Russian Federation and Turkmenistan, which due to the enormous environmental damage caused by the drying up of the Caspian waters and the accumulations of salt transported by wind on its territory were forced to reopen, in 1992, a dam built a decade earlier by the Soviet authorities, so as to allow the bay to fill with water again.

Sea or lake? The legal implications of the Caspian status

At the basis of the regional dispute relating to the subdivision of the Caspian Sea and the consequent maritime delimitation of the respective Exclusive Economic Zones (EEZ) there is the difficulty of attributing the legal connotation of sea or lake to the basin, with consequent legal implications deriving from the application of different regulatory criteria under public and customary international law.

In fact, if the Caspian were classified as a ‘lake’, pursuant to the rules of customary international law governing the management of border lakes it would be necessary to stipulate binding agreements between the coastal States both for the use of the waters and for the exploitation of the resources present therein. In the opposite case in which the definition of ‘sea’ was adopted, the application of the United Nations Convention on the Law of the Sea (UNCLOS) adopted in Montego Bay in 1982 would impose the definition for each State that has a coast of a territorial sea within the 12 nautical miles, of an Exclusive Economic Zone of proportional width to the extension of its coast and, in a compliant manner, of a continental shelf. Furthermore, on the basis of the existence of a customary rule recognized by the ruling of the International Court of Justice in 1969 on the North Sea Continental Shelf case between Denmark, Germany and the Netherlands, the boundaries of the respective EEZs would be set in consideration of an identified median line starting from the coastal states themselves.

Establishing whether the Caspian should be given the status of ‘lake’ or ‘sea’ reflects almost exclusively on the rights to exploit offshore gas and oil reserves. In the first case, in fact, the division of the Caspian basin into five sectors between the coastal states and the equitable division of the resources would result in equal control of a share equivalent to 20%. On the contrary, defining the Caspian as ‘sea’ would entail the attribution of the share due to each State in accordance with the length of its coastline, thus penalizing the Countries that have a less extensive coastline (this is the case, for example, of Iran, whose share would be reduced to 13%). Within this context, the five States involved in the dispute have adopted clearly different positions regarding the attribution of one rather than the other legal status to the Caspian basin (Karbuz 2016).

The Russian approach remained centered upon two fundamental principles: the Caspian Sea is a unique inland body of water; from an international point of view, it cannot be considered a sea, as regardless of the presence of salt water and the dimensions almost comparable to those of the Black Sea, there are no natural connections with other seas and oceans. The United Nations Convention on the Law of the Sea is therefore not applicable as it is limitedly addressed to marine spaces, while it will be up to the individual coastal states to develop appropriate rules that reflect common approaches to the question of the delimitation of the Caspian, whose waters and subsoil remain the common property of the countries bordering it. Furthermore, the Russian Federation has long compromised the division of Exclusive Economic Zones between states, since it would place the construction of underwater pipelines and extraction plants outside Russian monitoring, with the risk that Russian energy companies could suffer from competition from projects for the transfer of gas and oil at reduced prices from Central Asia to Europe (Ezihev 2011).

The Iranian vision is of a similar approach, which since the early 1990s has supported the preservation of the uniqueness of the Caspian Sea and the possible possibility of creating an oil company common to all the countries along the coast. In Tehran’s vision, in fact, the observation of a coherent line and the maintenance of the treaties stipulated in previous centuries with the Russian Empire first and then the Soviet Union are placed as priorities until the development of a new regulatory status, which in any case should favor the division of the Caspian into equivalent areas, with equal rights for all coastal States. This approach would in fact benefit the country, which as highlighted would see its area drastically reduced if the sea status was adopted with reference to the Caspian basin.
For Iran, this would be incompatible with its aspirations and interests, and similarly a continuous postponement of the resolution of the dispute would threaten interference from foreign states interested in an important role in the region. Consequently, Tehran, opposed to the establishment of areas of exclusive national competence, and put forward the so-called ‘condominium’ solution, according to which the resources of the basin should be shared between the five States, in order to allow their exploitation and profit generation (Tofigh and Abedian 2016).

The divergent positions of Kazakhstan, Turkmenistan and Azerbaijan

Contrary to the Russian and Iranian approaches, Kazakhstan, Turkmenistan and Azerbaijan have adopted opposing positions in order to resolve disputes arising from a failure to define the legal status of the Caspian. The economic aims and the possibility of taking maximum advantage from the exploitation of hydrocarbon deposits have pushed the three newly formed post-Soviet republics to encourage the recognition of the Caspian as a ‘sea’, setting aside the meaning of ‘lake’ which is now obsolete and incapable of reflect the factual situation in the area.

In the vision of Astana, Ashgabat and Baku, the status of ‘sea’ would allow the application of international maritime law to the waters of the Caspian, as well as the exploitation of the resources present on the seabed and the claim of an EEZ up to three hundred nautical miles from their own coasts. However, even in this case new opportunities for conflict between the States would remain on the negotiating table: the small size of the Caspian and the lack of possibility for each power to outline such a vast EEZ is in fact reflected in the overlap of the special zones claimed by the individual countries, as in the case of Russia and Kazakhstan, which compete for a strip of sea rich in gas in the northern part of the Caspian, and Azerbaijan, Iran and Turkmenistan, in conflict for the southern area rich in salt and, above all, oil.

The Republic of Azerbaijan raised for the first time the issue of the international legal status of the Caspian Sea on the occasion of the Special Conference held in Tehran in September-October 1992, which was supposed to see the light of an international organization responsible for resolving related disputes to the reservoir. For Baku, the Caspian was to be considered a ‘closed sea’, and – pursuant to the UNCLOS Convention – susceptible to exploitation by coastal states, entitled to a series of sovereign rights over their Economic Zone, including the subsoil, the continental shelf and territorial waters. This orientation was undoubtedly favored by the presence of huge oil reserves in off-shore fields off the coast of the Caspian Sea, exploration of which began following the signature, in 1994, of what was defined as ‘the contract of the century’ with numerous Western oil companies, which still play a very important role in the Azerbaijani extractive sector today.
In particular, for Azerbaijan the development of new oil exploration and production projects in the Caspian and the dense network of oil and gas pipelines that transport the energy sources extracted directly to Europe take on a central role, in view of the consolidation of the country as an area of transit for supplies coming from the Central Asian side of the basin. For this reason, Baku did not recognize the legitimacy of the treaties concluded in 1921 and 1940 by Iran and the Soviet

Union, instead proceeding with the exploitation of offshore resources unilaterally and in agreement with international energy multinationals.
For its part, Kazakhstan expressed its vision on the status of the Caspian in the context of a draft Convention submitted to the coastal partners in July 1994. Even from Astana’s perspective, the Caspian is characterized as a ‘closed sea’, whose subsoil and the seabed is susceptible to exploitation by the States bordering it. However, particular emphasis was placed from the beginning on the need to proceed with the delimitation of the areas of competence of each country, while supporting the possibility of developing resources and territorial waters independent of the sectoral division of the sea. Nonetheless, Kazakhstan ended up accepting the Azerbaijani approach, joining with Baku in order to attract Western foreign investors interested in the development of the Caspian shelf.
At the same time, however, Astana has pursued a strategy of diversification of gas and oil supplies with the aim of reducing political and economic dependence on Russia for the export of raw materials. In particular, Kazakhstan launched the Atasu-Alashankou oil pipeline to China and joined the Baku-Tbilisi-Ceyhan (BTC) project since 2006, through which Caspian oil reaches the Mediterranean. In any case, among the priority aspects the right to free transit through the Caspian Sea and access to other seas and oceans remain open, as they are considered fundamental from a strategic perspective.

Interposed between the orientations of Moscow, Tehran, Baku and Astana, Turkmenistan originally considered the Caspian an internal lake without the possibility of applying the law of the sea. Characterized by an almost adamant intractability, Ashgabat has positioned itself as a neutral power on several occasions, deeming it premature to conclude agreements on the Caspian Sea without first having clarified the issue of the disputed oil fields. In this regard, Turkmenistan agreed to sign a joint declaration according to which only littoral states were holders of sovereign rights over the water basin and its resources, also referring to the urgency of a basic international agreement for the regulation of the activities of parts in the Caspian.

In the impossibility of reaching a multilateral agreement between the five coastal states, therefore, a continuous and prolonged search for compromises between the different national aspirations led to the temporary resolution of the Caspian dispute on a bilateral basis. Numerous agreements were thus concluded, and a Memorandum between Azerbaijan, Russia and Kazakhstan between 1998 and 2003 was signed. The Memorandum allowed a first definition of the division of the waters and resources of the northern Caspian, but it left the configuration of the southern area open (Parhomchik 2016).

The 2018 agreement: the Convention on the Legal Status of the Caspian Sea

The signature of the Convention on the Legal Status of the Caspian Sea during a summit held on August 12, 2018 in the city of Aktau, Kazakhstan put an end to the stalemate in negotiations and the resort to signing bilateral agreements. The Convention is the result of an alignment of the strategic and economic needs of the five signatory states which – despite not having reached a definitive landing point – have achieved the delimitation of the territorial waters and the respective exclusive fishing zones, while establishing the status of common maritime space for the remaining areas. Despite this, numerous doubts still remain with regard to the division and exploitation rights of the seabed, which inevitably reflect on the possibility of starting exploration and extraction activities for the hydrocarbons present in the deposits, as well as on the implementation of the application protocols of the Convention itself (Convention on the Legal Status of the Caspian Sea, 12 August 2018).

Pursuant to art. 3 of the Convention, the dimensions of the Caspian basin are set on the basis of a measurement introduced in the mid-1990s by the Ministry of Defense of the Russian Federation. Furthermore, within the Caspian geographical space, it is the coastal States that exercise exclusive sovereignty, with the consequent commitment to guarantee that their territory is not opened to the navigation of vessels flying foreign flags from those of the signatory countries. This commitment also extends to military activities, recognizing the possibility of access to the basin for member countries only.

In this regard, the Russian Federation played a key role in the negotiation process, driven by the desire to further consolidate its influence in the security issues of Eurasia. In fact, if on the one hand Russia is required to guarantee the transit through the river system of canalization from the Soviet era which allows the connection of the Russian waters of the Caspian to the Black Sea, on the other hand the country has achieved the maintenance of its naval dominance also on the Caspian. Specifically, the inclusion within the text of the Convention of a clause that excluded the presence of military forces external to the coastal states contributed to strengthening Moscow’s leading military position and its projection in extra-regional contexts, such as already occurred in the Syrian conflict. In fact, it was the Caspian Flotilla that launched a missile attack directed against the cities of Aleppo, Idlib and Raqqa from Caspian waters, over 1500 kilometers away from the targets. Among the points of greatest difficulty, the negotiations were prolonged regarding the delimitation of territorial waters (The Diplomat 2018).

However, it was agreed that the latter will extend for 15 nautical miles from the coast, followed by a respective exclusive fishing zone set at 10 nautical miles. Although the delimitation of the seabed remains uncertain, the States are committed to establishing fruitful cooperation with a view to environmental protection of the marine environment of the Caspian basin. Lastly, Article 14 regulates a series of safety measures and scientific research related to the delicate issue of hydrocarbon deposits, establishing the right of the States parties to lay pipelines within the Caspian Sea, taking into account the possible opposition arising from potential environmental damage.

This opens up new questions about the extent to which the environmental factor can be used to prevent the opening of new routes for the transport of gas and oil towards Europe, as has already happened in the case of the construction of the Trans-Caspian gas pipeline (TCP), which would allow for gas from Turkmenistan to reach the European continent through the connection with Baku and the passage through the Caucasus and Turkey. Specifically, in response to the firm will of Turkmenistan and Azerbaijan, which aim to diversify energy suppliers and trade routes, the opposition of Iran and Russia have focused on advancing questions of compatibility with the environmental protection of the Caspian, since pursuant to the Convention – which guarantees investment in energy projects and exclusive sovereignty in the respective national sectors – it would not be possible to prevent the construction of a new gas pipeline in the Turkmen and Azerbaijani areas of competence. Although the Convention removes some legal impediments to the construction of the gas pipeline, considerable strategic-commercial challenges remain, as well as tensions between coastal countries driven by non-converging interests.

Conclusion: Towards a joint implementation of the Convention?

Despite the issues that remain unresolved, the Convention boasts the title of having guaranteed the Caspian a new special legal status, implemented starting from the future ratification of the same Convention by all coastal states and through joint implementation actions. This includes the organization of the Sixth Summit of Caspian Heads of State in Ashgabat on 29 June 2023, during which the five countries discussed – both at a multilateral level and in separate meetings behind closed doors – the issue of interaction and the creation of a platform for exchanging views on urgent regional and international issues (Mussetti 2022).
In this regard, on the sidelines of the summit an ad hoc coordination mechanism was established for the preparation of the agenda, the development and implementation of the decisions of the summits of the Caspian Heads of State. It immediately appears clear that the abandonment of the rivalries between Turkmenistan, Azerbaijan and Iran in relation to the rights to exploit specific areas of the southern Caspian is a precondition for the effective implementation of the 2018 Convention. This process will once again and necessarily have to take place on a bilateral basis, a format in which successful joint projects in the energy sector were previously discussed (Pietkiewicz 2021).

Particular attention must then be paid to China, which has positively welcomed the Convention on the status of the Caspian by virtue of the consolidation of Beijing’s position in numerous port hubs of the basin considered strategic, already the subject of the huge investments of the Belt and Road Initiative for the construction of infrastructures. This is the case of the port of Aktau in Kazakhstan, the terminal of the railway line that from Khorgos, on the Sino-Kazakh border, crosses the entire country up to the Caspian. A similar project is close to completion in the port of Turkmenbashi in Turkmenistan, which will cross Uzbekistan and Turkmenistan from China to transport goods and merchandise towards the Caspian. Alongside infrastructure, Chinese influence will also be decisive regarding the exploitation of oil fields under Kazakh sovereignty, of which it holds 8.33% of the shares of the Kashagan consortium.


Canali, Laura, and Mirko Mussetti. 2022. “Carta: Dispute nel Mar Caspio.” Limes, May 19, 2022.

“Convention on the Legal Status of the Caspian Sea.” 2018. President of Russia.

Ezhiev, I. 2011. “Contradictions in approaches to the settlement of the current political and legal status of the Caspian Sea.” Bullettin, Moscow University, Ministy of Intern. Affairs of the Russian Federation 4.

Geranmayeh, Ali. 1995. “The Caspian Sea in Iranian History and Politics.” Central Asian Quarterly Labyrinth 2 (3).

Karbuz, Sohbet. 2016. “The Legal Status Of The Caspian Sea: Implications On Caspian Resources Development And Transport.” Energy Policy Turkey 2:62-69.

Mussetti, Mirko. 2022. “Il Caspio e il sistema dei Cinque Mari.” Limes, May 3, 2022.

News Central Asia (nCa). 2022. “Ashgabat Summit: Caspian countries reaffirmed a shared vision for strong friendship and cooperation.” June 30, 2022.

“North Sea Continental Shelf (Federal Republic of Germany/Netherlands).” 1969. Cour internationale de Justice.

Parkhomchik, Lidiya. 2016. “Current Developments in a Dispute over the Legal Status of the Caspian Sea.” Eurasian Research Institute, 2016.

Pietkiewicz, Michał. 2021. “Legal status of Caspian Sea – problem solved?” Marine Policy 123.

Putz, Catherine. 2018. “Caspian Sea Dispute Settled on the Surface.” The Diplomat, August 13, 2018.

“Russo-Iranian Relations up to the Bolshevik Revolution.” 2014. Encyclopaedia Iranica.

Sychev, S., and V. Volkhov. 1946. “Soviet-Iranian relations in Treaties, Conventions, Agreements.”

Tofigh, Ali A., and Maryam Abedian. 2016. “Analysis of energy status in Iran For Designing Sustainable energy roadmap.” Renew. Sustain. Energy Review 57:1296-1306.

United Nations. 1982. “Convention on the Law of the Sea 1833 U.N.T.S. 397.” UNTC.

Whitney, Charles. 2018. “The Convention on the Legal Status of the Caspian Sea – A sea or not a sea: that is still the question.” Norton Rose Fulbright, September, 2018.—a-sea-or-not-a-sea-that-is-still-the-question

Share this on social media