The Caspian Bottleneck: Critical Hydrology, Port Congestion, and Geoeconomic Realignment

[BLUF] — The Trans-Caspian corridor is under dual systemic stress: the decrease in the Caspian Sea’s depth has reduced naval carrying capacity by 55-80%, forcing costly dredging operations with divergent financial data, while Azerbaijani and Kazakh terminals are experiencing structural queues of up to eight days. The Iranian ratification of the 2018 Convention stabilizes the legal framework but does not resolve the physical saturation, creating a bottleneck that hinders the expansion of Chinese container traffic to Europe.

The average level of the Caspian Sea in the Kazakh sector reached -29.31 meters above sea level (ASL) in September 2025, falling below the critical threshold of -29.0 m ASL necessary for historical hydrographic standards. This hydrological contraction has led to a systematic reduction in Deadweight Tonnage (DWT), forcing ships transiting through the Trans-Caspian International Transport Route (TITR) to operate at 55-80% of their nominal capacity. The 20% loss in the overall carrying capacity of maritime vessels is a documented effect from operational reports, which forces operators to manage lower volumes to ensure safety margins on the Under Keel Clearance (UKC), the minimum distance between the keel and the seabed.

To counter this reduction, Kazakh port administrations have initiated intensive dredging operations. At Aktau, 1.3 million cubic meters of sediment were removed to increase the draft from 4-6 meters to 6-7 meters. However, analysis of costs reveals significant discrepancies in available sources: the total cost is estimated to range between $45.6 million (20.6 billion tenge) according to DredgeWire and $86.5 million (42.1 billion tenge) according to Sea-News.Az. This discrepancy likely reflects different phases of the same operation or contractual updates, but highlights a lack of transparency in publicly available financial data related to hydrological mitigation interventions. No data is available to calculate the unit cost of dredging per cubic meter removed, a crucial metric for evaluating the economic efficiency of investments compared to the added value of transported cargo.

The reduction in naval capacity clashes with the physical saturation of transit infrastructure. The port of Baku (Alat) handled 100,000 TEU in the first nine months of 2026, marking a 29% increase compared to the 77,300 TEU in 2025 and approaching the annual target of 107,000 TEU. This dynamic has led to an effective operational capacity of 160,000 TEU, with a drastic reduction in ship handling times from 20 hours to 4-5 hours thanks to systemic integration with Azerbaijan Railways CJSC. Simultaneously, the port of Turkmenbashi registered a 43% utilization rate of its installed capacity in 2025, increasing compared to the 19% in 2023. Despite hydrological enhancement works at Kuryk, which reached depths of 5-8 meters, the Ro-Pax fleet available for Kazakhstan-Azerbaijan routes remains limited to less than 20 operational units combined between ASCO and Kazmortransflot.

Waiting times in Kazakh ports range from 4 to 8 days, a figure that reflects the discrepancy between the increased port capacity resulting from dredging and the availability of the fleet needed to process the volume. The climate represents an additional factor of discontinuity: operations in Kazakh ports are interrupted for up to 75 days per year due to weather conditions, limiting the effective utilization of recently completed infrastructure investments. This climatic variability requires a fleet management strategy that compensates for periods of inactivity with excess capacity during favorable months, creating an opportunity cost not quantified in current operational budgets.

PART I. — Analysis of Hydrology and Operational Impact on Caspian Terminals

UKC Constraints and Downgrading in Kazakh Terminals

The reduction in water level has generated a critical constraint on the Under Keel Clearance (UKC), the minimum distance between the ship’s keel and the seabed, forcing the Aktau and Kuryk terminals to limit the draft of vessels. Operational data indicate that this restriction has resulted in a 20% loss in the overall capacity of maritime means, an effect directly documented in reports on the cost of Caspian Sea contraction for the Middle Corridor. To counter this downgrading, the Kazakhstan Maritime Administration (KMA) has initiated targeted dredging projects to restore operational depths: at Aktau, 1.3 million cubic meters of sediment were removed to bring the seabed from 4-6 m to 6-7 m, while at Kuryk, the works extended the deep waters up to the approach channel.

Discrepancies in Dredging Data and Costs

The analysis of the Aktau project’s costs and timelines reveals a significant discrepancy in available sources, which prevents a unique quantification of the investment required to maintain the route. The total estimated cost varies between $45.6 million (20.6 billion tenge) according to DredgeWire and $86.5 million (42.1 billion tenge) according to Sea-News.Az, with completion dates ranging from the end of 2025 to December 2026. This divergence likely reflects different phases of the same intervention or contractual updates, but it highlights a lack of transparency in public financial data related to hydrographic mitigation interventions.

Extension of the Phenomenon to Azerbaijan and Information Gaps

The DWT (Draft Water Level) reduction phenomenon is not limited to the Kazakh sector; the port of Alat in Azerbaijan presents identical operational limitations, with ships forced to reduce their loads by 20% to adapt to the reduced depths. Despite the strategic importance of the Turkmenbashi and Baku/Alat terminals, no specific technical documents or hydrographic bulletins have been found in the last 90 days that precisely quantify the drop in water level in the central sector (average depth 190 m) or southern sector (>1,000 m). Furthermore, no available data allows for the calculation of the unit cost of dredging per cubic meter removed, a metric essential for evaluating the economic efficiency of interventions compared to the added value of the transported cargo.

Systemic Implications and Projections

Investments in dredging at Aktau and Kuryk aim to increase maritime operations volume by 30% and reduce logistics costs by 10-15%, but the sustainability of these interventions depends on the future trajectory of the water level. Projections from the Kazakh Ministry of Ecology indicate critical scenarios until 2050, suggesting that current civil engineering works may not be sufficient in the long term without continuous and adaptive monitoring. The lack of harmonized data between the various actors in the basin (Kazakhstan, Azerbaijan, Turkmenistan) creates an operational risk for the continuity of the trans-Caspian supply chain, where any change in water level translates directly into inefficiency in transportation costs.

Comparative Data on Dredging at Aktau and Kuryk

Metric	Aktau (Kazakhstan)	Kuryk (Kazakhstan)
Sediment Removal Volumes / Target Depth	1.3 million m³ / 6-7 meters	Data not specified / 5 meters
Estimated Project Cost	$45.6 – $86.5 million (discrepancy in sources)	$1.1 billion (complex development by 2028)
Impact on DWT Capacity	Target +30% volume of operations	Operational at 80% of nominal capacity
Dredging Cost per m³	Data not recoverable	Data not recoverable

The absence of data on the unit cost of dredging and the discrepancy in the total investment values at Aktau compromise the ability to assess the allocative efficiency of public resources in the trans-Caspian corridor. The systematic reduction in operational capacity to 80% in all major terminals highlights a structural constraint that requires not only local technical interventions, but an integrated hydrological governance at the basin level to mitigate the risks of disruption to global supply chains.

PART II. — Saturation and Capacity of Major Terminals

The port of Baku (Alat) handled 100,000 TEU in the first nine months of 2026, marking a 29% increase compared to the 77,300 TEU recorded in the same period of 2025 and approaching the annual target of 107,000 TEU. This trend has led to an effective operational capacity of 160,000 TEU, with a drastic reduction in ship handling times from 20 hours to 4-5 hours thanks to systematic integration with Azerbaijan Railways CJSC. In parallel, the port of Turkmenbashi registered a 43% utilization of its installed capacity in 2025, rising from 19% in 2023, handling 4.2 million tons in the first six months of the year with a structural annual target of 17 million tons. The increasing saturation in Baku leads to a projection of 123,000 TEU by the end of 2026 and a plan for expansion up to 500,000 TEU by 2027, highlighting an infrastructure pressure that requires dredging interventions and new equipment.

The Kazakh terminals have completed the hydrological enhancement works by the end of 2026: Aktau expanded the draft from 4.0-4.8 m to 6-7 meters through the excavation of 1.3 million cubic meters for an investment of $45.6 million, while Kuryk reached a depth of 5-8 meters, enabling winter navigation and increasing transshipment potential by 50% up to 32 million tons per year. The combined capacity of the ports of Aktau and Kuryk is currently 22 million tons per year, with a growth plan towards 30 million tons by 2027. Despite these interventions, the number of Ro-Pax vessels available for the Kazakhstan-Azerbaijan routes remains limited to less than 20 operational units combined between ASCO and Kazmortransflot, creating a physical bottleneck that does not linearly follow the expansion of the quays.

Cycle Times and Operational Efficiency

The logistical integration between Baku and the Azerbaijani railways has made it possible to reduce yard cycle times, but inefficiencies persist in the berthing phase: the World Bank reports waiting times for ships of more than 12 hours in Alat, due to a lack of regular services and insufficient fleet management. To counter this constraint, ASCO has announced a high-capacity ferry project capable of loading up to 120 railway wagons simultaneously between Kuryk and Alat, with the stated goal of reducing port processing time by 66%. Land transit on the Aktau-Altynkol section recorded a travel time of 83 hours in 2026, indicating rail fluidity that contrasts with maritime waiting times.

Queues at Kazakh ports reach durations ranging from 4 to 12 days, a figure that reflects the discrepancy between the increased port capacity resulting from dredging and the availability of the Ro-Pax fleet needed to handle the volume. The climate represents a further factor of discontinuity: operations in Kazakh ports are subject to interruptions for up to 75 days per year due to weather conditions, limiting the effective use of recently completed infrastructure investments. This climatic variability requires fleet management that must compensate for periods of inactivity with excess capacity during favorable months.

Consistency of the Caspian Flotilla and Traffic Metrics

Kazakhstan Temir Zholy (KTZ) has expanded its naval fleet by ordering six multipurpose cargo ships from China and Azerbaijan, with plans to acquire five additional 1,900 TEU container vessels in 2026. This expansion complements the existing ASCO fleet, which comprises a total of 56 vessels, including 13 ferries operating on Caspian routes. In the first half of 2026, Middle Corridor transportation reached 4.5 million tons, with an increase of 22% in just eight months and a 58% increase in container transits to 44,200 TEU. The growth of dry cargo traffic was particularly significant, with Baku recording a 71% increase in dry cargo handling in the first nine months of 2026, reaching a volume of 1.73 million tons.

The Ro-Pax segment showed sustained growth: ASCO transported 28,178 vehicles in the first eight months of 2026, an increase of 10% compared to 2025, with the total weight of vehicles reaching 728,536 tons. The Caspian Sea level, which reached a record low of -29.21 meters in 2026, a decrease of approximately two meters compared to the previous year, reduced the operational capacity of ferries by 22% for tank containers and 10% for wagons on the Baku-Kuryk route. This hydrological contraction requires a redefinition of maximum allowable loads, directly influencing the number of trips required to handle the same volume of goods.

Operational Data and Port Capacity Q1-Q3 2026

Indicator	Value / Metric	Main Source
Baku Container Throughput (9 months)	100,000 TEU (+29% YoY)	Baku Int’l Sea Trade Port / AzCon
Aktau Draft (post-dredging)	6-7 meters	DredgeWire / Sea-News.Az
Kazakh Ports Dwell Time	4-8 days	PortNews
Vehicles Transported by ASCO (8 months)	28,178 units (+10% YoY)	BairdMaritime
Vessel Handling Time in Baku	4-5 hours (from 20 hours)	PortNews / AzCon

The convergence between increased port capacity in Baku and the hydrological constraints of the Caspian Sea is redefining loading dynamics: while Alat handles record volumes thanks to railway efficiency, the reduced water depth requires a reduction in draft for trans-Caspian routes. The lack of information on unit dwell costs for ferries waiting does not allow for an accurate quantification of the financial impact of the 4-8 day queues reported in operational data.

PART III. — Redefinition of Trans-Caspian Energy and Digital Flows (Q3-Q4 2026)

On July 1, 2026, the Trans-Caspian Pipeline Company completed the transfer of operational control of the BTC (Baku-Tbilisi-Ceyhan) pipeline to SOCAR Midstream Operations LLC, a wholly owned state subsidiary. This transfer marks the definitive exit of BP from the direct management of the infrastructure, which has transported over 4.7 billion barrels (approximately 630 million tons) since 2006. The nominal capacity of the pipeline remains at 1 million barrels per day, but the Azerbaijani management is changing the criteria for allocating commercial space, prioritizing strategic regional partnerships.

Transit data confirm a reorientation of Kazakh and Turkmen flows through the southern corridor. In the first half of 2026, KazMunayGas recorded a total transport of 43.28 million tons, an increase of 4% compared to the same period in 2025, despite a decrease of 4.6% in overall production. Specifically, flows to Azerbaijan reached 4 million tons in the first few months of the year, distributed between the Tengiz field (3.8 Mt) and Kashagan (200,000 t), with a recent contractual expansion that increases the monthly volume from 120,000 to 180,000 tons starting in March 2026.

The maritime component of transportation, managed by Caspian Shipping Company (ASCO) vessels, transported 2.085 million tons between Aktau and Sangachal as of March 12, 2026, with the last documented shipment closing a seasonal transit cycle. The integration between the maritime flow and the pipeline creates a hybrid system where the remaining capacity of the BTC absorbs production surpluses not exportable via the CPC (Caspian Pipeline Consortium) to the Black Sea, circumventing Russian geopolitical constraints. The mixing of Kazakh and Azeri Light crude oil occurs in Sangachal; however, no specific analytical data on per-barrel penalties or density limits for transit mixing were found in the examined documents.

On the digital front, the Digital Silk Way project went into commercial operation on October 15, 2026, with the inauguration of the Trans-Caspian Fiber Optic Cable. Created by the joint venture CaspiLink B.V. between AzerTelecom and Kazakhtelecom for an investment of $50.6 million, the system covers 380 km on the seabed, connecting Sumgayit to Aktau with a transmission capacity exceeding 400 Tbps. The installation was carried out by a specialized cable-laying vessel in a timeframe of 15-20 days, overcoming the engineering complexities typical of Caspian seabeds without the use of state public funds.

Parallel to the physical infrastructure development, the capacity of the TCP (Trans-Caspian Gas Pipeline) remains blocked at zero effective volumes due to Article 14 of the Convention on the Legal Status of the Caspian Sea of 2018, which prohibits transboundary energy infrastructures without unanimous consent from the riparian states. Despite this legal constraint, Turkmenistan has proceeded with the development of the fourth phase of the Galkynysh field, signing a $5.1 billion contract with CNPC on April 16, 2026, to add 10 Bcm/y of production capacity. Turkmen production is currently diverted to China and Uzbekistan, not through the Caspian Sea.

No specific data were found in the technical documents regarding underwater seismic faults in the central Caspian Sea that have influenced the laying of the Digital Silk Way cable or port dredging operations. The available evidence confirms the operational stability of the installed infrastructure, but does not quantify the geological risks inherent to the seabed for future maintenance or network expansions. The lack of integrated seismic reports in the energy datasets leaves an information gap regarding the long-term resilience of trans-Caspian cables and pipelines.

>400 Tbps on 380 kmLogistical Intersection: INSTC and the Middle Corridor

Iran has recognized the strategic overlap between the Middle Corridor (East-West, through Kazakhstan and Azerbaijan) and the International North-South Transport Corridor (INSTC, North-South, via Anzali-Amirabad-Bandar Abbas) as a critical factor in controlling commercial flows. The INSTC, a 7,200 km multimodal infrastructure connecting India, Iran, and Russia, currently exhibits a logistical efficiency reduced by 30-40% compared to traditional maritime routes via the Suez Canal. This structural inefficiency drives regional powers towards greater integration of land corridors to mitigate the risks of blockage or disruption of maritime routes.

The Indian investment of $120 million in Phase 1 of the port of Chabahar, operational since May 2024 with a ten-year agreement, represents the main Western driver for the use of the INSTC. Iran sees this intersection between the East-West and North-South corridors as a geopolitical leverage to reduce dependence on transit routes controlled by Russia or the Caspian Sea, seeking to diversify export routes to Central Asia and Russia through the Caucasus.

The ratification of the 2018 Convention by Iran in August 2026 completes the necessary legal framework to stabilize the basin, but does not eliminate operational tensions related to the presence of extra-regional actors and the vulnerabilities of port infrastructure. The reduced efficiency of the INSTC (30-40%) remains the main structural constraint on commercial development in the region, requiring complementary investments in land connections to compete with traditional routes.

PART V. — Timeline of Critical Vulnerabilities (2026-2030 Horizon)

Hydrological and Bathymetric Vector: The Structural Constraint

The average sea level of the Caspian Sea in the Kazakh sector reached a historic low of -29.3 meters above sea level in the first half of 2025, with minimum readings concentrated in the eastern area. This bathymetric contraction has forced a reduction in the Deadweight Tonnage (DWT) of Kazakh ports by 55% within the next 12 months, directly compromising the efficiency of stowage operations. In response to this situation, the government completed dredging of the port of Aktau, removing 1.3 million cubic meters of material with an investment ranging from $45.6 to $86.5 million to increase the depth from 4 to 6-7 meters. The project, completed by December 2026, aims to mitigate the decline in capacity, supporting a 30% increase in cargo transport along the Transcaspian Corridor and a 10-15% reduction in maritime costs.

Naval Vector: Infrastructure Saturation and Bottlenecks

The reduced carrying capacity clashes with the physical saturation of transit infrastructure, particularly at the port of Alat. Transit queues have become structural due to the inability of Ro-Pax ferries to handle the volume, exacerbated by a 64% increase in container traffic from China in 2026. The strategic target of handling 300,000 TEU within 18-24 months appears unattainable given the current congestion, which impacts the fluidity of the supply chain. In parallel, the port of Kuryk has completed interventions to reach a depth of 5 meters, with an expected capacity of 6 million tons per year and an expected transit volume of 2.2 million tons by December 2026. The joint Kazakhstan-Azerbaijan fleet is expanding coverage with six new ferries launched between 2026 and 2028, but the increase in physical capacity does not immediately eliminate the waiting times generated by the pre-existing saturation.

Regulatory Vector: The Impact of the CBAM on Exports

The European regulatory framework introduces a critical financial constraint on Kazakh exports, particularly in the metallurgical sector. The Carbon Border Adjustment Mechanism (CBAM) has entered its final phase on January 1, 2026, with reporting and financial obligations in place until the actual purchase of certificates, scheduled for February 2027. CBAM certificate prices for 2026 range from €75.28/tCO₂e to €82.32/tCO₂e depending on the quarter, with a total reference cost of €100/ton of CO₂ equivalent for certificates not subscribed before September 2027. Exports of steel to the EU could incur estimated CBAM costs of $108 million per year, an amount that exceeds the value of the exports themselves (equal to 123% of the total), while those of aluminum generate a potential cost of $5.6 million per year . With 44% of Kazakh exports destined for the EU in 2025, the failure to decarbonize production processes represents a risk of exclusion from the primary market for more than half of national foreign trade.

Geopolitical and Infrastructural Vector: Divergence Between Corridors

The infrastructure competition unfolds along two parallel tracks with distinct quantitative goals. The Trans-Caspian Corridor (Middle Corridor) aims to consolidate the route through Kazakhstan, Azerbaijan, and Georgia, while the Initiative for the International North-South Transport Corridor (INSTC) proposes an alternative route via Russia, Iran, and the Indian Ocean. In 2024, the INSTC recorded a transport volume of 26.9 million tons, with a 19% increase compared to the previous year, reaching 2.1 million tons in the Kazakhstan-India segment thanks to dedicated joint ventures . The synchronized plan between Kazakhstan and Russia aims for an annual capacity of 20 million tons by 2030 for the eastern INSTC route, offering terminal spaces in Aktau towards Bandar Abbas in Iran. The strategic divergence highlights how Kazakhstan is diversifying its logistical dependencies, balancing the hydrological vulnerability of the Caspian Sea with the expansion of alternative land and sea routes to South Asia.

Water Projections and Systemic Vulnerability

Long-term projections indicate a structural pressure on water resources that defines the operational limits of the logistics infrastructure. Kazakhstan has mapped hydrological risks up to 2040, identifying an average annual runoff of 100 billion cubic meters, of which 45% comes from foreign sources, and a national consumption of 25 billion cubic meters for agriculture and industry. The reduction in the proportion of freshwater available threatens not only the Caspian ecosystems, but also the operational stability of river and seaports dependent on watersheds. The lack of specific quantitative data on the adaptation costs of port infrastructure to new hydrological regimes post-2030 limits the ability to model long-term financial risks, leaving open the assessment of the cumulative impact between water scarcity and logistical congestion.

Summary of Operational Energy and Digital Metrics

Metric	Value / Status	Source / Context
BTC Capacity (post-transition)	1 million barrels/day	SOCAR Midstream Operations LLC, July 2026
Kazakh Flows via BTC (H1 2026)	4 million tons total (monthly contract 180k t)	KazMunayGas / SOCAR, March 2026
Trans-Caspian Cable Capacity

Summary of Key Quantitative Data

Metric	Value / Estimate	Source / Context
Caspian Sea Level (Kazakh sector)	-29.31 m above sea level (September 2025)	Kazhydromet / Azertag
Reduction in DWT of Kazakh Ports	To 55% of original capacity	Within 12 months from H1 2025
CBAM Steel Cost (EU Export)	$108 million / year	Equivalent to 123% of export value
INSTC Traffic Growth (2024)	+19% (26.9 M tons)	Compared to 2023
Increase in China-Alat Traffic (2026)	+64%	Ro-Pax saturation

The convergence between the Caspian Sea bathymetric collapse and European CBAM regulatory constraints creates a double systemic constraint that requires accelerated reconfiguration of transit capacity. The operational capacity of the Trans-Caspian Corridor 2026-2030 will depend on how quickly Kazakhstan can compensate for the 45% loss of naval carrying capacity through customs efficiency and parallel development of the INSTC, while the competitiveness of metallurgical exports will be determined by technological adaptation to EU carbon certificate prices.

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