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Iran, Azerbaijan Set To Grow Maritime Transportation

By Orkhan Jalilov September 7, 2018

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The delegations of Iranian and Azerbaijani ports visited Astara Port in northern Iran on September 2. / IRNA news agency

Azerbaijani and Iranian officials have expressed their readiness to increase maritime transport and investment at a time when a majority of international shipping companies have announced that they will be halting business dealings with Iran.

“The authorities of Iranian and Azerbaijani ports have good partnership, and this can increase maritime transport and investment between the two countries,” Iran’s Director General of Ports and Maritime Organization, Mohammad Ali Saeedipour, said during a visit to Astara Port in northern Iran on September 2, according to Islamic Republic News Agency.

“The improvement of tourism through the ports of Iran and Azerbaijan is on agenda, and the two states work towards connecting of the Port of Astara to the national railway in order to increase the volume of bilateral trade,” Saeedipour said. “An Iranian delegation visited ports of the Republic of Azerbaijan in recent days and now an Azerbaijani delegation is touring ports of northern Iran in return.”

The distance between Astara Port and major neighboring ports in Turkey and Iraq is less than 600 km. Azerbaijan constituted 63 percent of the total trade turnover through Astara Port during the past two years.

Trade turnover between Iran and Azerbaijan hardly reached $1 billion, however; of that, $400 million is from tourism. Only two percent of trade between the two countries is carried out via ports, according to Iran News Daily.

For his turn, the Director General of Baku International Sea Trade Port, Taleh Ziyadov, said during his visit that “the five active Azerbaijani ports and those of northern Iran can contribute to both countries’ growth and development.”

The city of Astara, located in northwestern Iran, shares a border with Azerbaijan. The Astara multi-purpose port, which covers an area of 60 hectares, will be capable of loading and unloading 2,500-ton ships, through five docks. About 1.5 million tons of the port’s total capacity will be assigned to fuel and other oil products. 

Ziyadov also held talks with the deputy head of Iran’s Ports and Maritime Organization for ports and economic affairs, Mohammad-Ali Hassanzadeh, at Amirabad port on Tuesday, located in northern Mazandaran Province.

Hasanzadeh said during the meeting that Iran and Azerbaijan will decrease preferential tariff between the ports of the two courtiers under a mutual agreement. A decrease in the preferential tariff will lead to boosting trade via the ports.

The five Caspian littoral states – Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan – signed a landmark agreement on the legal status of what is the world’s largest body of enclosed water, on August 12, after more than two decades of disagreement and debate. The agreement, known as the Convention on the Legal Status of the Caspian Sea, allows for the five countries to launch new exploratory projects pertaining to the sea’s surface waters. A decision on the seabed, and the hydrocarbon resources trapped beneath it, has yet to be made.

Following the decision by U.S. President Donald Trump to reinstate sanctions on Iran, a majority of international shipping companies, which had been planning deals with Iran, have announced that they will end their shipping deals.

New sanctions that took effect in July under the U.S. National Defense Authorization Act threaten to blacklist non-U.S. entities that provide significant goods or services to Iran’s shipping or shipbuilding sectors.

In July, the French shipping group CMA CGM decided to suspend its operations in Iran due to the U.S. sanctions. Major container lines such as the Danish shipping company A. P. Moller-Maersk, Geneva-based Mediterranean Shipping Company SA, Kuwait-based United Arab Shipping Co. and Dubai-based Simatech Shipping LLC have announced to suspend their shipping operations with Iranian ports.

Meanwhile, several major buyers of Iranian crude, including top buyers China and India, have indicated that they have no intention of stopping the purchase of Iranian oil through shipping amid U.S. sanctions threats. The moves by the two top buyers of Iranian crude indicate that Tehran may not be fully cut off from global oil markets by November, when U.S. sanctions against Iran’s energy sector will take effect.

According to reports, Indian state oil refineries will be able to sidestep U.S. sanctions and continue to import Iranian crude oil in a scheme in which buyers shift to using vessels owned by the National Iranian Tanker Co and are insured by Tehran. The news comes after country’s top shipper Shipping Corp of India (SCI) halted voyages to Iran due to U.S. restrictions.