Azerbaijan has topped the list of Iran’s export destinations among the Caspian Sea littoral states.
According to the spokesperson of the Islamic Republic of Iran Customs Administration, Iran exported 646,364 tons of commodities worth $263.02 million to Caspian states during the first two months of the current Iranian year (March 21-May 21), registering a 14% decline in weight but a 17% rise in value compared with the similar period of last year.
“Azerbaijan with 121,338 tons worth $114.97 million [down 10% in volume and up 104% in value year-on-year], was Iran’s main export destination from among the four countries under review,” Rouhollah Latifi was also quoted as saying by IRNA.
Following Iran’s northwestern neighbor was Russia with 198,663 tons worth $68.58 million (down 12% and 29% in weight and value respectively YOY), Turkmenistan with 232,359 tons worth $58.6 million (down 20% in volume and up 33% in value YOY) and Kazakhstan with 94,003 tons worth $20.85 million (down 5% in weight and up 24% in value YOY).
Imports from the four countries stood at 554,576 tons worth $634.48 million, registering a 62% and 49% growth in weight and value respectively compared with the corresponding period of last year.
Latifi noted that Russia with 443,681 tons worth $319.14 million (up 45% in weight and 73% in value YOY) was the biggest exporter to Iran among Caspian states during the period, followed by Kazakhstan with 93,597 tons worth $39.76 million (up 253% and 285% in volume and value respectively YOY), Azerbaijan with 4,864 tons worth $7.29 million (up 191% in both weight and value YOY) and Turkmenistan with 12,433 tons worth $5,26 million (up 80% and 21% in volume and value respectively YOY)
Overall, Iran and the Caspian countries traded over 1.2 million tons of goods worth $897.5 million during the two months under review, registering a 10% fall in weight but a 38% rise in value YOY.
Iran-Azerbaijan Transport Link
Work continues between Azerbaijan and Iran on the implementation of a memorandum of understanding to establish communication links between the East Zangezur economic region and Nakhchivan, Azerbaijan’s Ambassador to Iran Ali Alizadeh was quoted as saying recently by Trend News Agency.
According to the envoy, a meeting will be held in the near future at the level of joint working groups of Azerbaijan and Iran on designing bridges to be built on both sides, i.e., from Nakhchivan and from the East Zangezur economic region.
The ambassador noted that after the approval of the bridge projects, executive steps will be taken.
On March 11, 2022, Azerbaijan and Iran signed a memorandum of understanding in Baku on the creation of new communication links between the East Zangezur economic region and the Nakhchivan Autonomous Republic through the territory of Iran.
Describing the signing of the MoU as a “historic event”, assistant to Azerbaijani president and the head of Foreign Policy Affairs Department of the Presidential Administration, Hikmat Hajiyev, said the signing of the memorandum of understanding coincides with the 30th anniversary of the establishment of diplomatic relations between Azerbaijan and Iran.
“The relations of friendship, mutual trust and close neighborhood established between Azerbaijan and Iran over the past 30 years play an important role in the implementation of this project. We are confident that the new corridor will open up favorable opportunities for regional cooperation, development and welfare of the people of the region and expansion of economic and commercial ties”, he was quoted as saying by Azerbaijan’s State News Agency.
According to Fuad Shahbazov, a Baku-based analyst, the two countries plan to establish new railroad, highway, communication, and energy supply lines connecting Azerbaijan’s East Zangezur economic region and the Nakhchivan Autonomous Republic through the territory of Iran. Four bridges will be built over the Araz River, including two motorways and two railroads. The new route will be functioning just five kilometers from the Iranian–Armenia border.
“The new agreement on East Zangezur came amid renewed debates between Azerbaijan and Armenia regarding the Zangezur corridor running through Armenia’s Syunik Province and linking Azerbaijan to Nakhchivan region. Since the end of the 44-day war, Azerbaijan has sought an opportunity to gain a direct land route to Nakhchivan and further to Turkey via this territory and promised broad economic benefits to Yerevan, albeit without success. The long debates and negotiations yielded no significant result, as Yerevan categorically rejected any discussion of corridor options,” he was quoted as saying by Commonspace.eu.
“Azerbaijan swiftly turned to Iran as an alternative option, thus seemingly demonstrating its willingness to establish the long-awaited transit corridor even without using Armenia’s territory … The Baku–Tehran thaw started in January of 2022 when both sides agreed on joint infrastructural projects targeting increased transit. Following this, on January 25, an agreement for the construction of a road bridge over the Astarachay River at the border of the two countries was also signed. It appears that Azerbaijan and Iran decided to abstain from political statements regarding the regional geopolitical order that remains highly sensitive and shift to a more pragmatic regional cooperation agenda.”
Shahbazov said Tehran had long enjoyed a transit role between Azerbaijan and Turkey until the outbreak of the conflict in September of 2020.
“Azerbaijan’s attempts to establish a transit corridor with Turkey via Armenian territory [West Zangezur] caused grievances in Tehran. However, with the new initiative, Iran has regained momentum to maintain its position and not to be left as a complete outsider in the region,” he said.
“In anticipation of the fallout from the international economic sanctions recently imposed on Moscow by the West, Azerbaijan is seeking multiple and alternative ways for deepening regional interconnectivity with all regional states, including through attempts to normalize relations with Armenia.”
According to the analyst, Baku’s attempts at normalizing relations with Yerevan can improve the prospect of a final peace agreement without Russia’s mediation and interference.
“Hence, another essential factor that makes the new East Zangezur transit corridor through Iran critical is the fact that it will not be under Russia’s control, unlike the transit corridor via Armenian [West Zangezur] territory. The new transit corridor will renew the partnership dialogue between Baku and Tehran, give new economic tools to Azerbaijan in the region, and bolster trade with its natural ally Turkey.”
Northern Ports’ Potential Untapped
Poor export infrastructures and lack of adequate equipment are to blame for the low shipping traffic of northern Iranian ports and freight forwarding companies, as well as traders’ reluctance to use their services, Ali Chagharvand, director of Plan Management, Planning and Monitoring Department of Iran Chamber of Commerce, Industries, Mines and Agriculture, wrote for Tasnim News Agency.
"Traders and transportation companies do not avail themselves of the numerous advantages of Iran’s northern ports that are in recession. Economic players believe that they are uneconomical. This is while by removing obstacles, freight transportation and trade through northern ports can become a viable alternative to other transit routes and even southern ports,” he said.
“In the last fiscal year [ended March 20, 2022], a meager 5-6 tons of the 30 million-ton capacity of northern ports were used, as demand for their services has declined in recent years.”
According to the Ports and Maritime Organization of Iran, northern ports, such as Anzali, Noshahr, Fereydounkenar and Astara, do not account for a significant share of the country’s loading and unloading operations. Noshahr Port has considerable advantages, including its proximity to the capital city and major commercial and industrial centers, easy access to the consumer markets of Central Asia and Eastern Europe, access to the airport, availability of facilities for storage and movement of commercial goods, petroleum products and solid bulk, having exclusive warehouses and special facilities for export and transit, as well as direct connection through pipelines to Chalous oil reservoirs. However, due to many reasons, the port’s shipping traffic is even lower than that of Amirabad Port.
A total of 4 million tons and 4.5 million tons of goods were loaded and unloaded, respectively, at the southern ports of Imam Khomeini and Shahid Rajaee during the month ending Nov. 21.
Among the northern ports, the highest throughput was registered by Amirabad Port with only 260,000 tons of goods while the share of Noshahr Port was lower than 50,000 tons during the period under review.
