Editor’s note

Navigating the Caspian: Energy, Trade, and Geopolitical Harmony

Navigating the Caspian: Energy, Trade, and Geopolitical Harmony

The Caspian Sea, often hailed as the world's largest lake, spans an impressive 371,000 square kilometers, making it five times larger than Lake Superior.

While Lake Superior is the largest freshwater lake by area and the second largest lake in the world, the Caspian Sea holds the top spot. Bordering Kazakhstan, Turkmenistan, Iran, Azerbaijan, and Russia, this vast inland sea boasts unique geographic and environmental characteristics. Its lack of natural outlets creates varying salinity levels from north to south, supporting a distinctive ecosystem that includes the Caspian seal and several sturgeon species renowned for producing caviar.

The biodiversity of the Caspian Sea is crucial, supporting approximately 850 animal species and over 500 plant species, many of which are endemic. The region’s unique environmental and geographical characteristics make it an invaluable natural reservoir and a focal point for regional political and economic cooperation among the countries surrounding the Caspian Sea.

Geopolitical Harmony: Political Alliances and Strategic Cooperation

The geopolitical landscape of the Caspian Sea region is intricate, with significant interactions among the five littoral states. Each country plays a crucial role in shaping the dynamics of this resource-rich inland sea.

The 2018 Convention on the Legal Status of the Caspian Sea marked a historic agreement that resolved longstanding disputes over maritime boundaries and resource management. This treaty has facilitated enhanced cooperation among the Caspian Sea nations, promoting the peaceful and mutually beneficial use of the sea’s resources.

Iran’s role in the Caspian Sea region is particularly noteworthy. Despite being the only non-Soviet state among the coastal countries, Iran has actively participated in regional cooperation efforts. Tehran has pursued a balanced diplomatic approach, seeking to strengthen both bilateral and multilateral relations with its Caspian neighbors. Iran’s involvement in the North-South Transport Corridor—a major infrastructure project aimed at connecting Indian Ocean ports to Europe via Iran and Russia—exemplifies its commitment to regional connectivity and economic development. Moreover, Iran has consistently advocated for the peaceful resolution of disputes and cooperative development of Caspian Sea resources. Leveraging its strategic location and energy resources, Iran has strengthened partnerships with Russia and other Caspian nations, contributing to regional stability and economic integration.

The Caspian Sea: Gateway to Energy Security and Economic Diversification

The Caspian Sea region is a treasure trove of resources, particularly oil and natural gas, which are pivotal to global energy security. Beyond its fuel wealth, the region also boasts significant non-fuel resources, including hydroelectric power, precious metals like gold and silver, and minerals such as iron ore, zinc, copper, uranium, and bauxite. Remarkably, it is responsible for approximately 90% of the world’s caviar production. Key pipelines, such as the Baku-Tbilisi-Ceyhan pipeline and the Kazakhstan-China pipeline, are crucial in transporting these resources to Europe and Asia, underscoring the region’s strategic significance in global energy markets.

Countries bordering the Caspian Sea are increasingly committed to regional cooperation. Initiatives like the Caspian Economic Forum and agreements on the legal status of the Caspian Sea demonstrate their willingness to collaborate on economic, environmental, and security issues. These cooperative efforts not only bring stability to the region but also enhance their collective bargaining power on the global stage.

In addition to its energy resources, the Caspian Sea region holds untapped potential in tourism and fishing. Coastal cities such as Baku in Azerbaijan and Bandar Anzali in Iran are emerging as popular tourist destinations, offering stunning beaches, historical sites, and vibrant cultures. Promoting sustainable fishing practices can bolster local economies while preserving the Caspian Sea’s unique marine life. Developing these sectors would diversify the region’s economy, reduce its reliance on energy exports, and foster sustainable growth.

Unlocking the Caspian: Russia and Iran’s Economic Gateway

The development of new transport corridors is a pivotal component of the economic strategy for the Caspian Sea countries, with Russia and Iran spearheading efforts to establish efficient land and sea routes that bypass traditional European pathways.

In late November 2022, Moscow and Tehran announced plans to initiate trade via the Caspian Sea between Astrakhan in Russia and Bandar Anzali in Iran. This initiative aims to facilitate the annual transfer of 12 million tons of goods from ships to railways across Iran, translating to about 3,000 trains. This development positions the Caspian Sea as a crucial commercial gateway for both Moscow and Iran to the global market.

Russia is exploring alternative land and sea routes to Iran, bypassing the traditional paths through the Black Sea and those circumventing Europe to reach the Mediterranean, Red Sea, and ultimately, India. Key projects in this context include:

1) Rehabilitation of the Volga-Don Canal: Russia has allocated $1 billion to enhance transportation between the Sea of Azov, the Don River, the Volga Canal, and the Volga River, thereby connecting these waterways to the port of Astrakhan near the Caspian Sea.

2) Iranian Shipping and Navigation Laws: Russia is finalizing legislation granting Iranian ships passage through the inland waterways of the Volga and Don rivers, highlighting the strategic importance of these waterways for Russia’s economy and security.

Tehran has invested in Russian ports and shipbuilding companies to develop and modernize the fleet of merchant ships crossing the Caspian Sea. For instance, Solyanka Port ranked first in commercial activity among 15 ports on the Volga River and in the Republic of Dagestan in 2020. A decade ago, the Islamic Republic of Iran Shipping Company acquired a 53% stake in Solyanka in Astrakhan. This investment, totaling $10 million and partly financed by Russian bank loans, included purchasing a 270-container ship and upgrading docks and internal roads.

Iran’s interest in the port of Astrakhan extends beyond these investments. The country has established a consulate and a branch of Mir Business Bank in Astrakhan, alongside branches in Moscow and Kazan, to facilitate banking and financial transactions between Iran and Russia.

Regarding the land route between Iran and Russia, it passes through Azerbaijan and Dagestan. Developing railway transport is a critical economic and infrastructure priority for countries in the region, enhancing goods transit volume and accelerating transportation. Currently, the Astara-Baku-Dagestan route is the primary transit corridor between Iran and Russia.

However, the lack of direct railway links between Iran and the Caucasus remains a challenge. The Astara-Baku-Dagestan route is the main transit route. Unlike the ports of Astrakhan and Makhachkala, which have access to the Russian National Railways, only one Iranian port on the Caspian Sea, Amirabad in Mazandaran Province, has direct access to the Iranian railway network. To address this, Iran is completing a 35-kilometer railway line from Rasht to the Caspian Sea, connecting the Anzali Free Trade and Industry Zone to the national railway network.

The Rasht-Astara railway line is a critical project under construction, forming part of the North-South Corridor. Russia has expressed significant interest in collaborating to complete this railway line, requiring an investment of approximately 20 trillion tomans (about $400 million). The project is expected to be completed within four years, significantly boosting trade and transit between India, Iran, and Russia, the primary beneficiaries of the North-South International Transport Corridor.

Integrating Giants: China and India’s Role in the Caspian Economic Boom

The Caspian Sea region is rapidly emerging as a crucial hub of economic cooperation, driven by the strategic geoeconomic interests of its neighboring countries. Economic geography, defined as the use of economic tools to defend national interests and achieve beneficial geopolitical outcomes, plays a pivotal role in the emergence of a multipolar world. In this transformation process, the Caspian countries, along with China and India, will have significant roles. Unlike purely liberal economics, which views trade as a means to maximize economic gains, geoeconomics leverages tools such as land and sea transportation routes, nearby markets, and political and geographic proximity to achieve relative gains across economic, security, political, and international domains.

At the heart of these efforts is an ambitious initiative to integrate China and India into a broader economic framework, revitalizing the historic Silk Road corridor and creating a dynamic and balanced economic bloc. China and India are key players in the geoeconomic landscape of the Caspian Sea region, and their involvement in regional initiatives could significantly enhance economic opportunities.

China’s Belt and Road Initiative aims to establish an extensive network of trade routes linking Asia, Europe, and Africa, with the Caspian Sea region forming an integral part of this initiative. This region provides a direct corridor for trade between China and Europe, and investments in infrastructure, such as railways and ports, under the Belt and Road Initiative, could greatly improve regional connectivity.

India, a major trading partner of Russia, has seen an increase in trade and transit volume with Russia due to financial sanctions imposed on the latter. India’s participation in the North-South Transport Corridor is also strengthening trade routes linking the Indian Ocean to the Caspian Sea and beyond. The Chabahar Port in Iran, developed with Indian investments, is a strategic asset facilitating trade between India, Iran, and Afghanistan, and is expanding towards Central Asia and Russia.

Through strategic investments in infrastructure, energy, and transportation corridors, the Caspian Sea region is expected to become a major economic hub. Iran’s proactive role in enhancing maritime, rail, and financial connectivity is crucial to regional cooperation. Integrating China and India into these economic frameworks could amplify the region’s geoeconomic potential, transforming the Caspian Sea into a dynamic international trade and investment corridor.

Shared Shores, Shared Stories: The Cultural Fabric of the Caspian Sea

The Caspian Sea region is a unique cultural mosaic, blending historical legacies and diverse ethnicities that have flourished around its shores. The countries bordering this inland sea are connected by a rich fabric of cultural and historical ties, providing a solid foundation for regional cooperation and unity.

Historically, the Caspian Sea was a vital hub on the ancient Silk Road, facilitating not only trade but also cultural exchanges between East and West. This strategic importance has left a lasting legacy on the cultural landscape of the surrounding countries. For instance, Iran’s northern provinces, such as Gilan and Mazandaran, have long been influenced by their proximity to the Caspian Sea, enriching their local traditions, cuisine, and arts with diverse influences from their northern neighbors.

The cultural synergy between the Caspian countries is evident in their shared traditions, music, and culinary practices. For example, traditional music in Iran and Azerbaijan shares similar instruments and styles, reflecting centuries of cultural exchange. Maqam music in Azerbaijan and radif music in Iranian classical music use remarkably similar modular systems, highlighting a deep-rooted cultural connection. Cuisine is also a vital link between these countries. Caspian cuisine, characterized by the abundant use of fish and caviar, is the common denominator. In Iran, dishes such as smoked

دکترصنوبری: fish and fish roe are staples along the Caspian Sea coast, mirroring the culinary practices of Azerbaijan and Russia. This shared culinary heritage not only enhances the cultural richness of the region but also strengthens bonds through shared tastes and traditions.

Traditional festivals and celebrations further strengthen cultural ties between the Caspian Sea countries. Nowruz, the Persian New Year celebrated throughout Iran, Azerbaijan, and parts of Central Asia, is a clear example of this. This ancient festival, which celebrates the arrival of spring, brings together people from different ethnic backgrounds in a celebration of renewal and harmony. In Kazakhstan, the celebration of Nowruz reflects this tradition and emphasizes the common cultural heritage. Likewise, Turkmenistan’s diverse folk festivals, often featuring traditional music, dance, and poetry, reflect a cultural continuity extending across the Caspian region.

The environmental challenges faced by the Caspian Sea have necessitated cooperative efforts between bordering countries, enhancing a sense of regional unity. Environmental degradation, particularly pollution and the decline in fish stocks, is a critical issue. This has led to cooperative measures to protect the unique ecosystem of the Caspian Sea, such as the establishment of the Caspian Sea Research Institute by Kazakhstan. Economic cooperation, especially in energy and trade, has also strengthened regional relations. For example, Iran and Kazakhstan are working together to promote mutual trade and investment, focusing on sectors such as agriculture, petrochemicals, and tourism. These economic partnerships are based on the shared history and cultural affiliations of the region, demonstrating how cultural commonalities can drive practical cooperation.

The prospects for achieving deeper cultural and historical unity in the Caspian Sea region are promising. Continued cultural exchanges, joint environmental initiatives, and economic cooperation are likely to enhance regional stability and prosperity. The recent Caspian Summits have underscored the commitment of these countries to work together to address common challenges and opportunities. Moreover, the cultural heritage of the Caspian Sea region is preserved and promoted through various international platforms. For example, the inclusion of Rasht in Iran as part of the UNESCO Network of Gastronomy Creative Cities highlights global recognition of the region’s rich cultural assets.

 Dr. Mohammad Ali Senobari

Director and editor-in-chief of the New Vision Center for Strategic Studies


Social Featured News Latest News
Caricature Photo of the day