Iran is seeking alternatives for oil exports and goods imports due to a United States naval blockade affecting its southern ports. The Caspian Sea, located on Iran's northern coast, is being considered as a potential route for trade. Recent diplomatic efforts at the United Nations to resolve tensions between Iran and the US have not yielded results, as US President Donald Trump rejected Iran's proposal to reopen the Strait of Hormuz.
With ongoing conflicts involving the US and Israel since February 28, Iran is adapting its trade strategies. However, experts note that maritime trade through the Caspian Sea faces logistical challenges. The Caspian Sea, the largest landlocked body of water globally, is bordered by Iran, Russia, Azerbaijan, Kazakhstan, and Turkmenistan. Shipping has been increasingly hindered by declining water levels, which have dropped approximately 2 meters (6.6 feet) since the 1990s, with projections suggesting further reductions of 8 to 21 meters (26 to 69 feet) by the century's end.
Inger Andersen, Executive Director of the UN Environment Programme, highlighted the declining water levels. Shahram Fadakar, director general of the Iranian Department of Environment’s Office for Coastal and Marine Ecosystem Protection, reported that water levels have decreased by over 20 centimeters (7.9 inches) annually in recent years, which could impact trade among Caspian nations.
Masoud Polmeh, secretary-general of the Shipping Association of Iran, stated that Iran's northern ports previously accommodated vessels weighing up to 6,000 tonnes, but can now only handle 4,000-tonne vessels due to reduced water levels. Iranian vessels entering the Caspian Sea via the Volga River in Russia have experienced delays due to low water levels, although Polmeh noted that this has not occurred in Iranian ports.
Most of Iran's maritime trade has historically occurred through its southern ports. However, the US naval embargo and air strikes on infrastructure are prompting a shift to the Caspian Sea and land borders. While there are currently no military attacks in the north, Vali Kaleji, an independent researcher, indicated that logistical changes are straining Iran's land borders, with long queues of trucks at the Norduz border crossing with Armenia.
Kaleji reported that up to 1,800 trucks can wait several days to enter Iran, with other terminals experiencing wait times of 10 to 15 days. Factors contributing to congestion include limited terminal capacity, customs procedures, and ongoing construction projects. Additionally, sanctions on Iranian airlines have led to increased passenger traffic at land borders with Armenia and Turkey.
The eastern Caspian rail route connects Iranian cargo to Turkmenistan, Kazakhstan, and China, but rail connections with the South Caucasus remain severed due to historical conflicts. The revival of the Julfa-Nakhchivan railway route depends on the peace process between Armenia and Azerbaijan.
Iranian authorities have not disclosed specific commodities or volumes being redirected to northern ports, but there are indications of increased imports of essential goods. Ports and Maritime Organization chief Mohammad Shakibi-Nasab noted that Iran's total nominal port capacity is 300 million tonnes, with only 30 million tonnes linked to northern ports. The share of essential goods transported through northern ports has risen from 18% before the US-Israel conflict to 30% currently.
Hadi Haghshenas, governor of Gilan province, reported a 50% year-on-year increase in container arrivals at Caspian ports during the five Iranian calendar months ending August 22. The northern ports are closer to major cities like Tehran, Isfahan, and Arak, potentially reducing land transport costs for imports.
The China-Aktau-northern Iran route, which transports cargo from China across Kazakhstan to Aktau and then by road into Iran, could enhance regional trade. The Iranian government is also working to complete the Rasht-Astara railway, crucial for the International North-South Transport Corridor.
However, Iran's shift northward may lead to overreliance on Russia and expose it to vulnerabilities from sanctions related to Russia's war in Ukraine. Reports indicate that Russia has supplied drone components and explosives to Iran via the Caspian Sea, with some technology potentially aimed at developing advanced missiles.
While the Caspian region has seen fewer US-Israeli attacks, an Iranian fishing vessel was reportedly attacked by Ukraine in July, raising concerns about trade complexities. Analysts warn that integration with Russian infrastructure could disrupt trade due to ongoing conflicts.
With southern ports blocked, Iranian authorities prioritize importing barley, maize, wheat, and oilseeds through northern ports. Most northern-bound exports consist of lighter goods, while Iran lacks the infrastructure to significantly increase imports via the Caspian. Despite a slight increase in northern-bound exports in recent years, this trend has plateaued since 2023, as valuable exports remain directed southward, primarily consisting of heavy commodities like mineral fuels and iron ore.