Kazakhstan, Iran focus on trade, transit, and transportation

During visit of Kazakh president to Iran, 2 sides agreed to expand rail, road transport cooperation and utilize Iranian ports to export energy.

Kazakhstan, Iran focus on trade, transit, and transportation

The visit of Kazakhstan’s President Kassym-Jomart Tokayev to Iran is seen as an attempt to explore safer alternatives for grain and energy exports in the current changing geopolitical environment.

He arrived in Tehran on Sunday and after meeting Iranian President Ebrahim Raisi pledged to declare a 14-day visa-free regime for Iranians in Kazakhstan and establishment of a free economic zone between the two countries.

In the wake of the polarization of international relations due to the conflict in Ukraine, many countries have been looking to expand relations with other regional players. According to Omid Rahimi, an Iranian expert on Central Asian affairs the countries like Iran, which are not directly involved in the conflict serve as a destination under present conditions.

Tokayev’s visit to Iran came a day after the arrival of the Kazakhstan-Iran-Türkiye container-transit train to Tehran on Saturday. Along with his Iranian counterpart, he took part in an online ceremony to launch this container train.

According to Kazakhstan’s Khabar 24 channel, the freight train started from Pavlodar in Northern Kazakhstan and then passed through Turkmenistan before reaching Incheh Borun railway station in Iran’s Golestan province. It later reached Tehran on Saturday.

This railway route has the potential to be the connecting link between China and Europe in the future. The pilot container train consists of 48 containers. The length of the 12-day route is 6,336 kilometers (3,937 miles). The launch of this new transnational communication is expected to contribute to and diversify the logistic options.

The president of Kazakhstan among other issues discussed utilizing the potential of transit corridors. He said that both sides were interested in using the transit potential, and in this regard, the corridors that connect the geographies from the east to the west and the north to the south are of special importance.

Alternate ports

Following the Russia-Ukraine war and sanctions imposed against Russia, Kazakhstan is looking for alternate ports to export its oil to the world.

Ahmed Qasimzadeh, an Iranian expert on Eurasian affairs, believes that at present 96% of Kazakhstan's oil exports go through Russian ports. In the wake of sanctions, European buyers are showing reluctance to buy Kazakh oil through Russia.

When EU sanctions on Russian oil will be fully implemented by the end of 2022, Kazakhstan by then expects to slowly increase its oil exports through Iran. Moreover, given the consequences of the Russia-Ukraine conflict, the Kazakh government also seeks to balance its relations with Moscow by forging closer ties with regional powers such as Tehran and Ankara. Tokayev’s visit to Ankara earlier this month was part of the same plan.

Kazakhstan seeks to export its energy through various channels. Iranian Ambassador to Kazakhstan, Majid Samadzade said that some foreign transporters may now be persuaded to use alternate routes which are short, reliable, and safe. The same argument goes for Iran’s importance for transit pipelines to transport oil and gas.

The envoy said both Iran and Kazakhstan will calibrate their relations driven by what could best serve their mutual interests. Therefore, some countries in the region, including Kazakhstan, may decide to export some of their oil and gas exports through the Persian Gulf and via the Sea of Oman. As a result, the Iranian route will be pursued actively.

As both Iran and Kazakhstan are located at the intersection of the North-South and West-East corridors, their role will gain significance in ensuring food and industrial security for the entire Eurasian region.

According to Ramin Mehmanparast, a former Iranian ambassador to Kazakhstan, the two sides can avail great opportunities for the export and import of energy resources, building materials, food, grain, and other goods not only between them but also to Europe, Asia, and Africa. He added that given the complex geopolitical environment owing to military conflicts, the potential to pursue alternate outlets has become necessary as ever.

It is recognized that the southern route via Iran is a viable route that can transport the oil and gas which Europe needs without having to cross the Russian border. It seems the option of transporting energy from the Caspian Sea through Iran may now be considered more seriously.

Over the years, experts from the two countries pointed out the obstacles impeding the development of economic relations between the two countries.

Agreed to expand rail and road transport

The two sides agreed to increase cooperation, by expanding rail and road transport cooperation. Various strategies to increase the volume of trade in goods and services through Iranian ports, including Bandar Abbas and the expansion of cooperation between the two countries in the Caspian Sea, and especially maritime trade using the ports of the two countries came under discussion.

Kazakh political scientist Zamir Karazhanov says that Kazakhstan is now discussing the implementation of several joint projects with the participation of Iranian companies, which means an increase in mutual investments.

Referring to the key role of Iran and Kazakhstan in the three regions of the Caspian Sea, West Asia, and Central Asia, experts emphasize the cooperation of the two countries in regional and international organizations was necessary to evade possible risks by identifying new opportunities. More so, the energy-rich Kazakhstan is landlocked and needs short and safe routes to reach open waters and world markets.

Elaheh Koulaei, an expert at the Tehran University, believes that Iran’s location in the Middle East has the potential to create a wide variety of new capacities for trade, industry, services, increase national income, and consequently the accumulation of capital and development and even security for the country.

She adds that Iran enjoys a key geopolitical position in the region, the location near the intersection of Asia and Europe, having the world's second-largest energy resources, mass consumer market, and the growing desire of Central Asian countries for exporting energy.

AA/Zaki Shaikh