North Caucasus, Turkic-speaking country Azerbaijan: Powering Europe and connecting the "Middle Corridor" with the "Belt and Road"

The Baku-Tbilisi-Ceyhan (BTC) oil pipeline and the Southern Gas Corridor (SGC) link Azerbaijan's oil and gas production to Europe's demand for fossil fuels. Despite the uncertainty caused by the Russia-Ukraine conflict, the energy geopolitical landscape remains stable. Even the threat of the Iran-US war and potential disruption of Gulf energy supplies has not affected Azerbaijan's geopolitical situation regarding its energy exports.

Due to pessimistic predictions about Azerbaijan's future oil and gas production, the Baku regime has shifted its focus towards renewable energy exports - particularly electricity and hydrogen production through the Caspian-Black Sea Green Energy Corridor (Black Sea Submarine Cable (BSSC)).

The political leadership of Azerbaijan has adopted a dual-energy strategy and actively promotes the geopolitical significance of this innovative approach.

Azerbaijan, as an important energy exporter to Europe, has become more complex due to ambitious green energy projects, while the maritime area that defines its geographical location is shrinking.

"Middle Corridor": An Emerging Trade Arteries in Eurasia and Its Bottlenecks

Aside from the dual-energy strategy, Azerbaijan is redefining its role in the "Middle Corridor" trade chain. Geographical location is a key factor in trans-Caspian trade activities, and Azerbaijan has further enhanced its geopolitical status by taking advantage of the Russia-Ukraine conflict and the Western countries' attempts to weaken Russia's role in Eurasian transportation. To take full advantage of the reduced transport time from Asia to Europe via the "Middle Corridor," Azerbaijan has invested in the necessary port and railway infrastructure. Azerbaijan sees the "Middle Corridor" as the entry point for Baku into China's Belt and Road Initiative.

However, there are many obstacles. The instability of trade volume and value - especially the lack of return cargo from Europe - weakens the value of participating countries. Port congestion and railway infrastructure upgrades, especially in western regions of Azerbaijan, have slowed down project implementation. In terms of railways, both Azerbaijan and Georgia face shortages of locomotives and train cars. A common policy-making and implementation mechanism covering all aspects must be established to address bureaucratic obstacles arising from different railway standards, taxation, and customs systems.

These obstacles have increased the overall cost of the "Middle Corridor." Although the World Bank has developed a 2030 action plan for implementing the project, the funding gap in the entire corridor, including the politically sensitive Zangezur corridor in Azerbaijan, remains significant. Baku is striving to find investors (the EU, the US, and China) to fill this gap. Recently, there were rumors that the Zangezur corridor would be leased under a 100-year private sector lease, which has increased the uncertainty of the Armenia-Azerbaijan peace agreement.

Although both sides claim a peace treaty is imminent, this uncertainty has intensified the broader and more complex geopolitical environment of the "Middle Corridor." Due to the efforts of external powers such as the United States (currently) and the European Union to further isolate Russia and the adverse effects on China, the geopolitical situation of the "Middle Corridor" is turbulent. Moreover, the impact of the Iran-Israel war and concerns over additional sanctions have exacerbated the geopolitical tensions in the "Middle Corridor." A regional power has controlled the crucial Zangezur corridor for a century.

As one of the Caspian coastal countries, Iran has certain geopolitical influence in the "Middle Corridor."

Source: The National Interest

Original: https://www.toutiao.com/article/1838413111721988/

Statement: This article represents the views of the author(s) alone.