The summit of the Shanghai Organization of Cooperation that took place in China

The summit of the Shanghai Organization of Cooperation: messages to the international community.

The summit of the Shanghai Organization of Cooperation that took place in China on June 15-16 sent a number of messages to the West, the ones it would find it difficult to come up with adequate responses to.

First, those present at the summit made plain their resolve to stick to the “spirit of Shanghai” henceforth and that they would not put up with “new international organizations with duplicate functions” on the territory of the Shanghai Organization of Cooperation. It means that Central Asia with all its problems including security and nonproliferation is proclaimed the zone of influence of this particular structure which Vladimir Putin said was representing “half of the mankind”.

Second, Russian and Chinese leaders essentially confirmed in Shanghai that these two countries do not intend to join the embargo Tehran is threatened with for refusal to put an end to uranium enrichment.

Third, an energy alliance between Russia and Iran is taking shape, with China, India, and Pakistan its potential members too.

Gas and atom

Putin and Hu Jintao have not lived up to some observers’ expectations of persuading Mahmud Ahmadinejad of Iran to accept a compromise on the central issue (uranium enrichment). As a matter of fact, Putin did speak of Tehran’s positive response to the offer from the international community and of its readiness for talks, but the statement in itself does not really mean anything.

The nuclear issue hanging in balance, Ahmadinejad suggest that Iran and Russia establish a new OPEC. In the gas sphere, that is. Ahmadinejad wants these two countries to set up gas prices and determine its routes together. Putin said in Shanghai that he was not regarding the future alliance as an alternative to OPEC but announced that “companies from our countries are discussing the idea of pooling efforts in the oil and gas sphere and particularly the idea of a joint venture.” According to the Russian president, this Russian-Iranian joint venture will enable both countries “a more energetic expansion into the markets of the third countries.”

It was reported practically at the same time that LUKoil and the national Iranian company drew an accord on commercialization of Azar gas field and that Gazprom was prepared to invest in and provide technological assistance to construction of a gas pipeline from Iran to Pakistan and India.

According to the Iranian president, the future gas alliance with Moscow will serve the interests of global security. The only catch is that Tehran and the West entertain wholly different notions of stability and security…

There is another hypothesis as well. Accepting the gas alliance idea and making Iran a full member of the Shanghai Organization of Cooperation (Ahmadinejad counts on it, he has even suggested a conference of energy ministers in Tehran), Moscow is going to demand from Tehran cooperativeness in the nuclear sphere. On the other hand, this particular term is unlikely to be formulated categorically.

Twists of gas diplomacy

How will Washington react? Pooling their efforts with other major gas exporters (Turkmenistan and Algeria), Russia and Iran as owners of nearly 50% of the global stocks of gas will manage to build energy cooperation bridges with major consumers (European Union, China, India) and cause a rearrangement of the whole geopolitical map of the world. The United States is already compelled to mitigate its position.

Ariel Cohen of the Heritage Foundation advised George W. Bush’s Administration to “keep an eye on Iran’s rapprochement with the Shanghai Organization of Cooperation.” According to the specialist, “it might indicate the growing coordination between Moscow, Beijing, and Tehran.” “It will become particularly noticeable if Tehran turns down the latest package of stimuli and refuses to suspend uranium enrichment,” Cohen said.

If Putin and the Chinese succeed in at least reducing some Ahmadinejad’s nuclear ambitions and therefore facilitate a compromise over the Iranian nuclear issue, rapid normalization of relations with Tehran will be the only way out for US Administration. (In fact, even the situation in Iraq requires it as it cannot be normalized without Iranian assistance and its clout with the Shi’ah majority in the neighbor country.” Experts say that Moscow’s “gas diplomacy” will lead Russia into a geopolitical trap. “If Iran normalizes its relations with American, then it won’t need any gas accords with Russia because the two countries are rivals,” Fyodor Lukianov said. “And if the relations are not normalized, than political risks of all and any projects will be all too high.”