The U.S. Approach to Energy Geopolitics in the Caucasus and Its Impact on the Political Economy of Iran and Russia (2000–2024)

Abstract

The tremors experienced in international relations since 1989 have significantly altered the geopolitical landscape of various regions across the world. Following the dissolution of the Soviet Union, Western countries, aiming to diversify their energy suppliers, signed multiple agreements concerning the utilization of hydrocarbon resources in the Caspian region. The United States actively sought to extend its influence over these areas by aligning disparate systems within its strategic orbit. Thus, although the Caucasus occupies a relatively small geographic area on the world map, the interest in this region far exceeds its physical size, indicating why certain countries strive to redefine their national interests and policy priorities. This region, due to its geopolitical and strategic importance, has consistently experienced fluctuations in relevance relative to the foreign policy agendas of global powers. While the Caucasus was previously on the periphery of international power rivalries, it has now become significantly more important both to neighboring states and to influential extra-regional actors. The crisis in the region has intensified following Russia's war against Ukraine, with the area increasingly influenced by the dynamics of NATO and U.S. relations with Russia. Consequently, a new "Great Game" has emerged in this region, shaped by the legacy frameworks of traditional power rivalries. The main lines of U.S. policy toward the region were formulated in the early 1990s. Following the discovery of substantial oil reserves and the success of agreements between Western oil companies and regional governments, U.S. energy policy shifted toward greater engagement. The Clinton administration designated the exploration and export of Caspian oil as a foreign policy priority, developing strategies to assist and accelerate the rapid development and export of oil to the United States and other Western markets. Over the past two decades, substantial shifts have occurred in U.S. energy policy. Over time, these policies increasingly leaned toward disengagement from energy projects. These significant changes are also evident in the context of U.S. energy policy regarding the Caucasus.