Bosphorus Straits Regulation and Central Asian Oil
Bosphorus Straits Regulation and Central Asian Oil
CASE NUMBER: 171
CASE MNEMONIC BOSPORUS
CASE NAME: Bosporus Straights and Environment
A. IDENTIFICATION
1. The Issue
The former Soviet Central Asian states possess oil reserves
in quantities which could support a market of billions of dollars.
Many firms have sought to begin large-scale exploitation of these
resources but ethnic unrest, economic uncertainty, and local
politics have hampered these efforts. A major issue is the
question of a reliable means of transporting Central Asian oil and
gas in large quantities out of the region and outward to reach
markets in the West and elsewhere. Traditionally, large quantities
of oil and gas have passed through the Bosphorus Straits, in
Turkey. The Straits are uninviting to large-scale transport,
possessing geographic features making heavy volumes of traffic
dangerous. As the quantity of traffic has increased, accidents in
the Straits have become more common, putting both the local
environment and the 11 million inhabitants of Istanbul at risk of
major environmental catastrophe. The Turks, ostensibly on
environmental and safety grounds, passed measures in 1994 which
would slow and regulate the oil traffic through the Straits, and
have backed alternative means to transport oil and gas out of
Central Asia. The regulations have resulted in costly delays for
some, particularly Russian, oil and gas shippers. The Russian
government has alleged that the measures violate Turkish treaty
commitments, and represent a regional power-grab to assert control
of the flow of oil and gas from Central Asia, as the Turks have
supported the construction of an oil pipeline which would pass
through Turkey before terminating in the Mediterranean.
2. Description
In 1936 the Treaty of Montreaux, guaranteeing free passage in
peacetime of the Bosphorus Straits was signed. The Treaty
guarantees Turkey s sovereignty, but states that in peacetime,
vessels of any nation carrying any cargo may pass freely without
delay or regulation through the Straits (Kohen, 6). In 1936,
supertankers did not exist, and traffic through the straits was
minimal. For example, in 1936, an average of 17 ships passed,
usually carrying grain, and weighing 13 tons passed each day.
Today, however, on average, 110 ships weighing as much as 200,000
tons, often carrying oil, gas, chemicals, nuclear waste, and other
hazardous materials, pass through the straits each day (Goltz,
11/25/94, 2D).
The collapse of the Soviet Union has led both to economic
unrest in many of the former Soviet Republics as well as the
creation of new economic opportunities. Oil, gas, and other
natural resources exist in large quantities in Central Asia, and
these cash-strapped states are eager to open their resources to
development by Western and Russian firms. Current arrangements for
transportation of oil from the region are clearly insufficient to
meet demand, and the search for reliable transportation methods is
intense. Currently, oil flows from Central Asia to the Black Sea
port of Novorossiysk, and then shipped onward to the Mediterranean
by way of the Bosphorus Straits. The flow of oil from the terminal
at Novorossysk has more than doubled since the end of the Cold War,
leading to increased congestion through the Bosphorus Straits
(Goltz, 11/25/94, 2D).
Also with the end of the Cold War, the favored position of
Turkey vis-a-vis Western institutions such as NATO and the European
Union, as well as toward Western nations generally, has declined
somewhat. In the absence of the Soviet threat, the strategic
interdependence between the West and Turkey has declined
considerably, and frictions in the historically close relationship
have increased. There has been an increasing perception in Turkey
that the relationship with the West has become intolerably
one-sided, and that Turkey should assert its interests more
strongly, and should begin to re-orient its focus in foreign policy
toward its Turkic relatives to the East. Domestic factors in the
form of an increasingly important Islamist party have also
pressured the Turkish government to take a more assertive stance in
world affairs. Regulating traffic through the Bosphorus Straits
and encouraging the development of a Turkish pipeline to transport
Central Asian oil to the Mediterranean is viewed by many as an
attempt by Turkey to assert itself as a regional actor.
These factors set the background for the dispute over Black
Sea oil tanker traffic through the Bosphorus Straits. This study
of the dispute will begin with a summary of recent events relevant
to the dispute, beginning with the 1994 passage of regulatory laws.
It will then address environmental, economic, and political issues
important in understanding the dispute. The case study will
conclude with some projections and discussion of the broader
importance of the outcome of the dispute.
Other cases which may be useful in understanding the Bophorus
shipping issue include the TED case relating to the Exxon Valdez shipping disaster. The former gives detailed information about the potential
environmental damage which could result from a major oil spill.
The latter provides information about Black Sea shipping and
environmental issues which pertain directly to shipping traffic
through the Bosphorus Straits.
In May 1994, the Turkish government, citing safety and
environmental concerns, passed measures which would regulate the
passage sea traffic through the Bosphorus Straits. The regulations
contained numerous provisions (Kohen 6; Zamyatin 1,4, APS Review
10/31/94):
1. vessels longer than 150 meters (164 yards) are advised to
take pilot captains And guiding tugs
2. automatic pilots for navigation are prohibited
3. ships powered by nuclear energy, or carrying nuclear or other
hazardous materials must report to Turkish Environment Ministry for
permission
4. ship height is limited to 190 feet
5. new traffic lanes to be set, new traffic separation schemes
(TSS) are implemented
6. no more than a single vessel carrying materials deemed
hazardous will be allowed to pass at the same time
7. all ships must notify Turkish authorities 24 hours in advance
of intention to pass through straits
8. ships longer than 200 meters can pass only in daytime
9. passage requires favorable weather
Shortly after announcing the new regulations, Turkey
approached the International Maritime Organization, an
international entity linked to the United Nations, in an attempt to
gain approval for the new measures. Turkey was successful in its
efforts, and the I.M.O. gave its approval for many of the measures
(Kohen 6).
Many states protested the new regulations, but none more
vocally than Russia, whose shipping comprised nearly 25% of the
traffic through the straits (Erdem 1). In June of 1994 the Russian
Foreign Ministry sent a diplomatic note to Ankara charging that
Turkey had acted unilaterally and had violated the Montreaux
Agreement (Kohen 6; Zamyatin 1). A foreign ministry spokesman
stated that Turkey did not have the right to resolve the problem
of the straits unilaterally, and that Turkey should be sensitive
to the interests of the Black Sea states. Various Russian sources
also criticized the Turkish action, charging that the Turks were
using environmental issues as pretext to seize control of oil
traffic from Central Asia. Ambassador Yakov A. Ostrovsky, an
official of the legal department of the Russian Foreign Ministry,
alleged that the Turkish action was both an overreaction to
environmental problems and that the measures were directly linked
to Turkish pipeline initiatives (Platt s Oilgram 5). Russian
shipping companies have also heavily criticized the measures as
capricious and unfair. An official at Russia's Novorosiysk
Shipping Company claimed that costly delays have occurred, and that
Russian ships have been delayed with no explanation. He pointed to
the requirement that ships carrying hazardous materials report to
the Turkish environmental protection ministry as a means of
harassing Russian shipping (Erdem 2). The official stated that
620 ship hours had been lost between July 1 and December 31,
resulting in proceeds losses to the amount of $1 million dollars.
The Russian government also pointed out that the Turks had not
previously shown any interest in protecting the environment, and
seemed little concerned with safety, as they have not installed a
radar system along the straits (Pomfret 2).
The Turks, however, denied that the motives behind the
measures were political. A foreign ministry spokesman stated that
the rules do not conflict with the Montreaux agreement, and alleged
that critics of the measures were attempting to push a technical
issue into a political debate. Senior officials assert that it is
within Turkey s rights to ensure safety for the more than 11
million inhabitants of Istanbul, and to protect the environment of
the old city (Kohen 6). A Turkish representative, Aydogan Oymen,
parried claims that the regulations were targeting Russians,
stating that the delays were due simply to bad weather and night
passage regulations (Erdem 2).
The US stated its support for the construction of a Turkish
pipeline in January of 1995. In October of 1995, ending ongoing
discussions, an international consortium announced plans to export
Azerbaijani oil from the Caspian Sea, first via Russia and Georgia,
but eventually through a yet-to-be constructed pipeline across
Turkey. The Turkish pipeline was favored as a long- term, high
capacity, and reliable transport system for Central Asian Oil
(Agence France Presse Financial Page). It thus appears that
Turkish pressure to control the flow of oil through the Bosphorus
coincided handily with an international political and economic
initiative to construct a Turkish oil pipeline.
The heavy traffic through the Bosphorus undoubtedly presents
substantial risks to the local environment. If statistics of the
number of vessels passing through the straits are considered in
relation to the physical characteristics of the straits, it is
abundantly clear that the probability of a serious environmental
catastrophe occurring in or around Istanbul is very high.
By some estimates, as many as 60 ships per day carrying oil
and other hazardous materials pass through the straits. On the
whole, 45,000 ships of various sizes pass, with an average of 1,350
per day. On average, 5 ships in excess of 80 DWTs now pass each
day, representing a potential floating catastrophe in the very
middle of Istanbul (Erdem 2). Turkish officials estimate that 60%
of the yearly traffic carries hazardous materials such as natural
gas, agricultural and other chemicals, oil, nuclear waste and
derivatives through the straits. Twenty billion gallons of oil and
chemicals pass through the straits each year.
The physical characteristics of the straits are not conducive
to heavy traffic, more resembling a river at some points than an
international waterway. The straits contain no less than 4 acute
bends, 2 of them in less than 2 kilometers, at a point where the
strait is only 700 meters wide (APS Review 10/31/94). Very large
cargo transports have already experienced problems with draught in
this area (Goltz 2D). As already mentioned, the strait passes
through the heart of Istanbul, an overcrowded, already-polluted
city of 11 million inhabitants. The waters of the straits are
noted for difficult currents.
The combination of the physical characteristics with heavy
traffic has already had predictable results. Between 1988 and 1992
there were 155 collisions in the Bosphorus (Wylie 74). In March of
1994, the oil tanker Nassia collided with an empty cargo ship at
the entrance of the Bosphorus, resulting in 30 deaths. The Nassia,
carrying 19 million gallons of crude oil from Novorssyisk, suffered
3 of its 10 tanks ruptured, and drifted unguided and burning for
nearly a week. The accident resulted in $1 billion in damages, and
the waterway was closed for a week (Wylie 74). The spill
eventually washed out to sea, away from Istanbul. An earlier
accident, in 1979, occurred when a Greek freighter collided with a
Romanian tanker near the lower entrance of the Bosphorus. The
explosion shattered windows onshore, and the load of diesel carried
by the tanker burned for weeks. The slick was washed into the Sea
of Marmara, and onward through the Dardanelles to the Aegean Sea
(Kohen 7, APS Review 10/31/94; Goltz 2D, Goltz 12/25/94 A33).
With the increase in oil traffic projected as a result of the
exploitation of Central Asian oil fields, it is abundantly evident
that it is unfair to ask Turkey to assume the risk for the health
of both the environment of the straits and the health of the
inhabitants of the Bosphorus.
The pipeline option for Turkey has proven attractive for
economic, environmental and political terms. The chief price of
strongly supporting the pipeline construction is close relations
with Russia. Economic and political benefits in the form of
transit royalties seem highly attractive for the Turks. There do
exist, however, certain problems related to the passage of the
projected pipeline near Kurdistan and areas in which Turkey has
carried out a bitter and costly military conflict with its Kurdish
population. How the pipeline will benefit or harm the interests of
these groups is unclear at this time. The actual route of the
pipeline is unclear at present.
Issues that remain unsolved will serve to ensure, however,
that conflict is likely to arise over the straits in the future.
It remains unclear whether the Turks are in fact in violation of
the Montreaux treaty, and whether the Russians will sustain their
complaints to higher political, economic, or even security levels.
In any event, Russia are is in fact developing its own pipelines
for oil transport, and the Bosphorus dispute is likely to become of
secondary importance as multiple means of oil transport are
developed. When this occurs, the question of importance will be
whether the Russians will allow the Turks to end their monopoly
over oil transport from Central Asia through their own pipeline.
If this occurs, the importance of Turkey as a regional actor could
very well increase dramatically, and the larger course of US policy
might be led toward a less Russo-centric foreign policy toward the
region.
3. Related Cases
Keyword Clusters
(1): Trade Product = OILGAS
(2): Bio-geography = DRY
(3): Environmental Problem = Sea Pollution [POLS]
4. Draft Author: Jason Meyers
B. LEGAL Clusters
5. Discourse and Status: Disagreement [DIS], In Progress
[INPROG]
The disagreement over the degree of control exercised by
Turkey over shipping Traffic through the Bosphorus straits is not
resolved. For the moment, the Turks are not stringently enforcing
the laws regarding shipping passed in 1994, averting major conflict
with Russian and other major oil transport companies. It is likely
that the issue will again become contentious should the Turks begin
enforcing the 1994 measures.
6. Forum and Scope: Turkey [TURKEY], Russia [RUSSIA] and
Multilateral [MULTI]
It is illegal in international legal terms for Turkey to
unilaterally abrogate the Montreaux Treaty of 1936. Turkey s
increased control over shipping traffic in the Bosphorus straits
has gained a degree international legitimacy, as Turkey has
applied, And received, I.M.O. support on many of the measures it
has enacted. The issue will arise as to whether the increased
control over ship traffic in fact constitutes a violation of
the Montreaux Treaty. The ships of many countries will be heavily
impacted, for the short term at least, should Turkey choose to
stringently enforce the new laws.
7. Decision Breadth: 3 (Turkey, Russia, US, many others)
8. Legal Standing: TREATY and LAW
C. GEOGRAPHIC Clusters
9. Geographic Locations
a. Geographic Domain : Asia
b. Geographic Site : Asia Minor, Central Asia
c. Geographic Impact : Southwest Asia
10. Sub-National Factors: YES
Two of the routes under discussion for the proposed
pipeline pass through areas of sub-national unrest. One such
route, through Russia, passes through Chechnya, an area of
considerable conflict. Other routes discussed pass through
Armenia, currently involved in a dispute with Azerbaijan. Of most
relevance, the Turkish pipeline would likely pass through areas of
heavy Kurd activity, increasing the potential for violence
related to that conflict to involve the pipeline itself or its
construction. International pressure on Turkey regarding its
Kurdish minority has been particularly strong, and Kurdish groups
(such as the Kurdish Nationalist Party, PKK) could view the
pipeline as a tempting target to draw international attention to
their cause.
11. Type of Habitat: DRY
D. TRADE Clusters
12. Type of Measure: Regulatory Standard [REGSTD]
The laws passed by the Turkish government amount to
regulation of the ship traffic through the straits. The measures,
which have resulted in some cases in lengthy and expensive delays,
halt traffic when congested conditions occur. They require that
ships longer than 150 meters be guided by a Turkish pilot.
13. Direct vs. Indirect Impacts: INDirect
14. Relation of Measure to Environmental Impact
a. Directly Related : YES POLLUTION in straits
b. Indirectly Related : YES, OIL/GAS shipping
c. Not Related : NO
d. Process Related : YES Pollution, Sea [POLLS]
15. Trade Product Identification: OILGAS
16. Economic Data
It is thought that the region surrounding the Caspian Sea
contain as much as 200 billion barrels, which would make the region
second only to the Persian Gulf in terms of volume of oil
production. Gas reserves in the Kazakh region alone amount to more
than 3 trillion cubic meters. By 2010, the flow of oil could reach
700,000 barrels per day (The Turkish Route... ).
17. Impact of Measure on Trade Competitiveness: LOW
The delay of oil and gas traffic through the straits is in many
ways similar to a non-tarriff barrier on oil and gas exports
flowing from Central Asia to the rest of the world. The
development of a cheaper, quicker, more reliable alternative in the
form of a pipeline through Turkey would decrease the
competitiveness of oil exports from Black Sea sites.
18. Industry Sector: OILGAS
19. Exporter and Importer: Central Asia and Many
The oil and gas which increasingly flows through the
Bosphorus straits is exported to numerous countries worldwide.
Slowing the flow of oil slows development of Central Asian oil
sites, and increases political tensions in the region.
E. ENVIRONMENT Clusters
20. Environmental Problem Type: Sea Pollution
Pollution in the Black Sea and Bosphorus Straits is
already considerable. No large-scale oil spills have occurred in
the region. Yet the impact of heavy tanker traffic is already
evident in the ecology of the Bosphorus and Black Sea. Though a
major spill could bring immediate environmental catastrophe, a key
problem caused simply by the presence of large, oil and gas
carrying ships is the day to day release of contaminated water as
the ships ballast their holds.
21. Name, Type, and Diversity of Species: Many
The fishing industry in the Bosphorus has virtually
collapsed, as catches have dropped by a factor of 50. Waterfowl
populations have suffered. Dolphins, which previously used the
Bosphorus Straits as a migration route, no longer live in the area.
The ecosystem of the Black Sea itself is nearly defunct due to
pollution and overfishing. Nearly 60 varieties of marketable fish
have disappeared. Estimates of cleanup costs run as high as of $15
billion dollars (Pope 13).
22. Impact and Effect: Medium, Product
23. Urgency and Lifetime: Medium
24. Substitutes: LIKE
The environmental risk to the Bosphorus straits could be
averted through the construction of an oil pipeline, thus reducing
the volume of traffic and the risk of accidents in the straits.
VI. OTHER Factors
25. Culture: YES
Turkey is currently passing through a phase in which its
foreign and economic policy is being buffeted by numerous
influences. There is an increasing temptation to assert Turkish
nationalism, and the increased regulation of the straits to some
extent is suggestive of a new Turkish assertiveness in its affairs.
It could be argued that there is a non-culture of conservation or
environmental awareness on the part of Russians.
26. Trans-Border: NO
27. Rights: YES
It is possible that human rights issues of Chechns, in the
Armenian-Azerbaijan conflict, or the persecution of the Kurdish
minority in Turkey could all play a role in the exploitation of oil
and gas resources from Central Asia. The proposed pipeline could
potentially pass through regions troubled by internal strife, and
in an effort to assure investors, increased repression and
persecution could result.
28. Relevant Literature
Birol, F.; Guerer, N. Modelling the transport sector fuel demand
for developing economies. Energy Policy Dec 1993, v21n12, p.
1163-1172.
Bovt, Georgy. Caspian oil : Not everyone wants what s cheapest,
everyone wants what s best-- For themselves. Current Digest of the
Post-Soviet Press Aug 9, 1995, v47n28.
Charodeyev, Gennady. "Turkey." Current Digest of the Post-Soviet
Press Jul 27, 1994, v46n26, p. 23.
Haselkorn, Avigdor. Kurds in the way. American Spectator JunE
1995, v28n6, p. 44-45.
Kazakhstan Seeks to Step up Crude Oil Export Capabilities. Oil &
Gas Journal Jun 22, 1992, v90n25, p. 27.
Knott, David. Turkey s squeeze on Black Sea traffic. Oil & Gas
Journal Mar 7, 1994, v92n10, p. 34.
Knott, David. Turkey s pivotal role in C.I.S. exports. Oil &
Gas Journal Mar 22, 1993, v91n12, p. 30.
Leskov, Sergei. Double game over Caspian oil. Current Digest of
the Post-Soviet Press Aug 9, 1995, v47n28. p. 22-23.
References
Agence France Presse (October 9, 1995): Financial Page. APS
Review Oil Market Trends, October 31, 1994.
Suna Erdem. Turkey Denies New Bosphorus Rules Political, The
Reuter European Business Report (January 31, 1995).
Thomas Goltz. Bosphorus in Oily Straits, The Plain Dealer
(November 25, 1994): 2D.
A Modern Foe Imperils Turkey' s Ancient Capital, The Houston Post
(December 25, 1994): A33.
Sami Kohen. Turkey Stems Bosphorus Shipping, The Christian Science
Monitor (June 9, 1994): 6.
John Pomfret. In Central Asia, a Rush For Control of Black Gold,
International Herald Tribune (April 28, 1995).
Hugh Pope. Death Hangs over the Black Sea, The Independent
(October 24, 1994): 13.
The Turkish Route: An Environmental Alternative. Videoprogram.
Woodhams Associates, 1995.
Unattributed. New Rules Along the Turkish Straits, APS Review Oil
Market Trends no. 17, vol. 43 (October 31, 1994).
Unattributed. Russia Warns Turkey on Bosphorus, Platt s Oilgram
News vol 72, no. 168 (August 30, 1994): 5.
Unattributed. Consortium Announces Compromise Over Export Route
for Azerbaijani Oil, James Wylie.
Turkey - Renationalizing Foreign Policy, Jane's Intelligence
Review vol. 7, no. 2 (February 1, 1995): 74.
Viktor Zamyatin. Safety is Not a Pretext for Limitations, Russian
Press Digest (July 4, 1994): 1, 4.
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