Declining Caspian Water Levels Threaten Russian and Chinese Corridor Plans

Executive Summary:

• The Caspian Sea’s declining water levels are reducing the amount of cargo that ships can carry, undermining Russia and the People’s Republic of China’s capability to use the sea for their north-south and east-west trade networks.
• Both Russia and the People’s Republic of China will continue to use land routes around the Caspian but face complex problems due to a shortage of transportation networks and political instability in the region.
• Moscow and Beijing will seek new ways to make these corridors work, efforts that will likely put additional pressure on littoral states to allow them to bypass the increasingly bottlenecked Caspian.

Declining water levels in the Caspian Sea are reducing the amount of cargo ships this body of water can carry, as well as the functioning of major ports. This decline threatens both Russia’s North-South corridor and the People’s Republic of China’s (PRC) One Belt, One Road initiative (Caspian Herald, March 15). Although Russia is the more profoundly affected of the two due to problems moving cargo east and south in the Caspian, the PRC has also increasingly relied on the Caspian to ship container traffic across to Central Asia, which it then transports via train (see EDM, April 11, 2023). The water levels of the Caspian have been declining for years, leading to an expanding shoreline, which has sparked academic debate about whether this is a permanent issue or one that can be reversed in the coming decades (Window on Eurasia, March 27, 2024; September 21, 2024). Declining water levels have also led to political discussions about whether the Caspian could be developed to serve as the primary route for Russian President Vladimir Putin’s North-South corridor (see EDM, April 11, August 8, 2023). It only emerged as a high-level political issue, however, when Moscow found that the falling water levels meant it could no longer move its Caspian Flotilla across the Caspian and through the Volga-Don canal to take part in Russia’s war against Ukraine (Window on Eurasia, March 27, 2024). The issue further gained importance in August 2024, when Putin focused on how the declining water levels could affect his North-South trade corridor during a meeting with the Governor of the Astrakhan Oblast, which borders the Caspian (URA.ru, August 27, 2024).

During a meeting in Baku earlier this month, Russian, Central Asian, and Caucasian officials raised the latest and most alarming concerns about the declining water levels’ effects on the North-South route and the PRC’s One Belt-One Road initiative (Caspian Herald, March 15). The participants, who included senior officials and experts from across the region, were unanimous in declaring that declining water levels in the Caspian have reduced the cargo ships’ load capacity by 20 percent or more over the past year. Still worse, this trend is restricting both the capacity of sea lanes and the operations of major ports, even leading to the closure of some smaller ports—most affected is the North, but ports are increasingly closing throughout. According to one report, speakers even suggested that the declining water levels’ effect on trade is now so serious that Kazakhstan, which has seen its coastline retreat more than 50 kilometers (~31 miles) in recent years, would be forced to “drop out” entirely of both Russia’s north-south and the PRC’s east-west trade networks, at least as far as the Caspian route is concerned (Caspian Herald, March 15).

Such predictions are perhaps overblown and simply intended to attract more attention to this problem. While the capacity of ships and ports on the Caspian has declined, a substantial amount of shipping continues to take place. Ships and ports serving the two interregional trade networks are still working, albeit with less capacity than before.  The routes’ current capacity could be maintained by increasing the frequency of sailings or building new ships, although Russia and the PRC face problems in doing so. On the one hand, Russia has major difficulties in its shipbuilding industry, with ships breaking down because they are overused and inadequately serviced. The PRC, on the other hand, is only beginning to get involved in shipbuilding for that body of water, although that is likely to change (Nezavisimaya Gazeta, May 11, 2023; see EDM, July 23, 2024; Window on Eurasia, January 24). Consequently, both Russia and the PRC are probably already considering other routes for their north-south and east-west trade.

The PRC has multiple options, including land trade through South Asia and the use of the Northern Sea Route in the Arctic, meaning it can pivot in various directions. If Russia is forced to turn away from the Caspian, however, it will be confronted by exactly the same problems in the Caucasus and Central Asia that prompted it to look to the sea in the first place. These problems include political instability; inadequate networks of railways and highways, including their absence in some places and their single-track nature in many others; difficulties building new transportation infrastructure due to the topography; and financing problems for the sector of Russia’s North-South Corridor in Northern Iran (Window on Eurasia, January 24, December 1, 2022, October 16, 2024). Recognition for this issue is growing in Moscow, and its expansive hopes for developing trade and projecting power to the south may not be achieved anytime soon (Window on Eurasia, January 5; see EDM, January 16;  Caspian Herald, March 15).

In the short term, Moscow will likely attempt to expand its dredging operations in the Caspian, perhaps with the involvement of Iran and the PRC, as it has already done for the Volga-Don Canal (Window on Eurasia, March 23, 2022; see EDM, November 14, 2022). Russia will also probably try to strengthen its Caspian Flotilla to ensure that ships making the transit across the Caspian can do so without interference (see EDM June 24, 2021; Window on Eurasia, November 20, 2024). Rather than admit defeat in the southern direction, something Putin is reluctant to do, Moscow will probably increase pressure on countries in the Caucasus and Central Asia to expand train and highway networks to replace shipping routes that declining water levels are jeopardizing. Such projects will be enormously expensive and take years to complete, but the Kremlin may conclude it has no other choice. Such pressures are likely to be directed, in the first instance, against Kazakhstan but also toward Uzbekistan and Turkmenistan. Kazakhstan is already alarmed by Moscow’s moves. It will only become more so if Russia increases its pressure. Kazakhstan may welcome Russian assistance, however, in helping it to keep its ports open and its own Caspian shipping going (Window on Eurasia, December 28, 2023, October 25, 2024). Other countries, including Azerbaijan in the Caucasus, will be significantly less welcoming of Russian pressure in this regard, as recent increases in tensions between Moscow and Baku highlight (Ritm Eurasia, December 29, 2024; see EDM, January 28). 

Consequently, as happens more often than is commonly recognized, changes in the natural environment, such as the Caspian’s declining water levels, have far larger economic and political consequences and can even quickly become the triggers for conflict than the initial academic discussions might suggest.