Desperate Russia looking to Iran’s ports as a way to bypass western sanctions

Tehran, Iran (Ports Europe) May 30 – Desperately trying to find a way to avoid harsh international sanctions affecting Russian transport and logistics, Moscow is courting Iran. It is looking for ways to use the Caspian Sea as an export/import corridor, including deepening its ports there and dredging Volga-Don Canal. The latest attempt to find a back door through the sanctions paralysing Russian ports is the visit of Russia’s deputy transport minister Dmitry Zverev to Tehran. The delegation included representatives of transport and logistics organizations and the (Russian) International Road Transport Association. In a meeting with Ali Akbar Safaei, managing director of Iran’s Ports and Maritime Organization (PMO) and ports officials, Zverev underlined the new role of the north-south corridor and the use of sea, road and rail transportation between both western sanctions hit countries. Zverev is asking for quick development of cooperation, purchase of Iranian port facilities by Russia, the possibilities for Iran to provide land for the construction of container terminals on the shores of Caspian Sea and Indian Ocean. The International North-South International Transport Corridor is a 7,200-km-long multi-mode network of ship, rail, and road route for moving freight between India, Iran, Afghanistan, Azerbaijan, Russia, Central Asia and Europe. Astrakhan port and Volga-Don Canal Zverev, quoted by Iran’s media, said that deepening (dredging) of Caspian Sea is under way, especially is Russian ports. He also mentioned the little discussed fact about Iranian financing for the modernisation of the sea port of Astrakhan on the Volga River. Here, Moscow wants to build new multimodal cargo facilities for export/import to Southeast Asia. According to local officials, Astrakhan’s port infrastructure has the capacity for over 16 million tonnes of cargo per year. Part of the project would be to develop capacity of the Volga-Don Canal. Russia is planning a €1 billion dredging, locks modernisation and other improvements project to guarantee all year-round navigation in the Volga-Don Canal. Currently, the canal is used on average 240 days a year. Following dredging works in the two large rivers, it could become a transport artery for some 9 million tonnes of cargo a year. The project could be completed by 2030. The 101-km canal connects the Caspian Sea with the Sea of Azov. Russia decided to develop the canal after it took complete control over Azov Sea following the occupation of Ukrainian ports of Berdyansk and Mariupol. At present, the Volga–Don Canal has limited capacity and is unsuitable for larger ships. It has a depth of just 3-3.5 metres, with further summer limitations. The Lenin Volga–Don Shipping Canal connects the Volga and Don rivers (both in Russia) at their closest points. The canal, together with the lower Volga and the lower Don, provides the most direct (over 800 km long) navigable connection between the Caspian Sea and the world’s oceans via the Azov and the Black Seas. It ends at Russia’s Caspian Sea port of Astrakhan. The shrinking Caspian Sea The Caspian Sea started shrinking in mid-1960s and its level is projected to fall by nine to 18 metres by the year 2100, according to a study, published in December 2020 in Communications Earth & Environment journal. If scientific projections are correct, global warming continues or worsens and rivers’ inflow in Caspian continue to decrease, the sea’s surface area will shrink between 23%, with a 9-metre reduction, and by 34% for an 18-metre drop in water level. Reducing Caspian Sea water levels ended abruptly in 1978, when its water started rising unexpectedly and without scientific explanation for the phenomenon. This welcome development continued until mid-1990s when the sea started losing water again. In comparison to other ancient lakes, the Caspian Sea surface temperature has suffered from the fastest rise on record. A loss of a third of Caspian Sea surface will deliver a fatal blow to the 12 ports located there and trigger a financial tsunami to the economies of the region. Worst affected will be the Russian ports of Astrakhan, Makhachkala and Olya as well as the project for a new port in Lagan. Further reading: Ports Europe Analysis – Strategic and overambitious Iranian move in Russian Caspian, financed by China, or much ado about nothing The Caspian’s largest and most successful port, Baku in Azerbaijan, will also be heavily affected, as well as the country’s second port of Alat. The new Turkmenbashi (Turkmanbashi) port in Turkmenistan, a $1.5 billion (€1.32 billion) over-ambitious project for a poor and isolated state, will have difficulties to continue operation. Further reading: Ports Europe: Turkmenbashi port in Turkmenistan – another megalomaniac project or a new Silk Road winner Aktau, Atyrau and Kuryk in Kazakhstan, as well as Amirabad, Anzali and Nowshahr in Iran, are expected to face problems and would also require huge investments to be able to continue normal operations. According to scientific projections, the vast northern Caspian shelf, the Turkmen shelf in the southeast, and all coastal areas in the middle and southern Caspian Sea will emerge from under the sea surface as water levels drop. In addition, the Kara-Bogaz-Gol Bay on the eastern shore will completely dry up. Some experts caution that the Caspian Sea level could stabilise or even start rising again unexpectedly as happened some 40 years ago. This creates a serious dilemma for the financing of ports and related multimodal land and sea transport infrastructure – whether to invest now or wait for better projections. The Caspian Sea The Caspian Sea is the largest (371,000 to 384,400 km²) and most voluminous (78,000 to 78,700 km³) inland body of water in the world. Its physical environment and its floor have oceanic characteristics. The sea lies in an elongated depression between the European and Asian continental plates. Its surface is well below sea level, with a maximum depth of 980 m in the south and a shallow northern half averaging just 5.2 metres. The sea extends more than 1,000 km from north to south, and is bounded by deserts in the north and east, and by grasslands and forests in the west and south. The surface of the world’s largest (salty) lake lying between Europe and Asia has fallen by several centimetres a year since the 1990s, with the rate of water shrinkage set to increase dramatically as global temperatures continue to increase. The Caspian’s low salinity is due to freshwater input. The Volga river contributes up to 82% of the inflow, with the rest supplied by some 130 other rivers, principally the Ural, Kura and Atrek. On the back of a shrinking Caspian Sea, Russia’s ports of Makhachkala, Olya (where a new port is being developed, just 50 km to the north) and Lagan (if build) need significant investments in order to be turned into modern multimodal transport hubs. They lack well-developed railway and road connections, modern port-related infrastructure, such as airports and other transport systems. There are no modern Russian container terminals on the Caspian Sea and the Volga river and it looks like the Russian government wants to build a large container port in Astrakhan region, primarily for transshipment of goods. Littoral states believe that the Caspian Sea has huge potential for them to develop a transshipment role in China’s new Silk Road, an economic strategy to seek better access for Chinese-made products in European markets. The sea occupies a key location facilitating water transport in both North-South and East-West directions. Developing international rail transport also attracts more distant countries, such as India, to use the Caspian Sea as a route to markets in Europe and Russia. More information in Ports Europe: Caspian Sea ports handled 1% of cargo of all Russia’s ports, but that might change soon – March 17, 2021 Design capacity of the new Olya port’s SEZ to be reached in 2026 – February 11, 2021 Analysis – Will Caspian ports become stranded assets if the sea shrinks? – December 29, 2020 Analysis – Russia keeps pushing for development of Caspian Sea ports and Volga-Don Canal – December 14, 2020 Copyright (C) Ports Europe. All Rights Reserved. 2022.

Desperate Russia looking to Iran’s ports as a way to bypass western sanctions

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Desperate Russia looking to Iran’s ports as a way to bypass western sanctions

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All news

EU delegation visits Gioia Tauro port to see anti-drug efforts

Table: Russian ports monthly cargo results Oct’23-Oct’24

Russian ports handled 743 mln tonnes of cargo Jan-Oct’24

Reference: Russian occupation of neighbours’ territory

HHLA reports positive growth in the first nine months of 2024

Our Expert Analysis

Latest Free Reads

Top Ports