Reading the international and Israeli press, one might get the impression that Iran is winning and still controls the Strait of Hormuz. Nothing could be further from reality. With a U.S.-imposed naval blockade in place and the Hormuz issue winding down, Iran’s power projection in the Gulf is gradually but steadily eroding, while the Axis of the Resistance exists only in name.

The erosion of Iranian power and control in the Gulf is also weakening Iran’s influence in other regions, including the Caspian basin. Although the region draws fewer headlines than the Gulf, its strategic importance to Iran and neighboring countries is hard to overstate. The Caspian Sea is rich in maritime resources, making the agreed division of those resources among the Caspian countries strategically important.

Domestic Criticism

Iran’s weakness on this front has become so apparent that it is drawing public criticism at home.

The Caspian saga began in 2018, when the leaders of Iran, Russia, Kazakhstan, Azerbaijan, and Turkmenistan signed the Convention on the Legal Status of the Caspian Sea on August 12 in the Kazakh city of Aktau. The convention classifies the Caspian as a sea, not a lake. That classification matters because it would divide the Caspian among the littoral states in proportion to each state’s share of the coastline, rather than giving each of the five countries an equal 20 percent share. Iran would be the primary loser because it has the shortest coastline.

At the time, Iranian President Hassan Rouhani stressed that “important issues”—including boundaries and control over the Caspian Sea’s territorial waters and resources—remained unresolved among the Caspian littoral states despite the convention’s signing. His remarks failed to ease tensions, however, and Iran’s signing of the convention sparked a wave of criticism.

Twitter users said that after the Soviet Union’s collapse, Iran expected a 50% share of the Caspian Sea. Some argued that an old agreement with Moscow should have resulted in an equal division among Iran and the newly formed Russia, Azerbaijan, Kazakhstan, and Turkmenistan, though the other littoral states did not accept this. Some users said that by signing the new agreement, Iran had legally agreed to give up its previous share, limiting itself to around 11%.

Notably, the criticism came from both the regime’s supporters and the opposition. One user blamed “akhundha” (a pejorative term for Shi’ite clerics) for selling the country out to Iran’s neighbors and the Iranian government, while another accused the Rouhani government of thuggery and betrayal of Iran.

As Iran’s power projection and control in the Persian Gulf erode under naval blockades and military strikes, Tehran has less strategic leverage to secure favorable security and seabed terms in the Caspian basin. This compounds domestic criticism that it is negotiating northern maritime and resource rights from a position of mounting weakness.

Objective Strategic Pressures

In short, by signing the Caspian Convention on August 12, 2018, Iran itself acknowledged its strategic inferiority in the Caspian Basin. The Islamic Republic faces several strategic issues in the region. These issues are objective—in other words, recognizing them does not require support for the Iranian regime:

• Loss of Southern Counterweight: Tehran historically used its dominant posture in the Persian Gulf and the Strait of Hormuz as diplomatic leverage to demand concessions from northern neighbors such as Azerbaijan and Turkmenistan. Iran thus used its weight in the Gulf to counterbalance its disadvantages in the Caspian basin. As of August 2026, however, the Islamic Republic can no longer exploit Gulf leverage to its advantage. The mere fact that many Iranians are wary of their country being “sold out” shows that other states are no longer afraid of Iran.
  
  Caspian Vulnerability: With Gulf shipping restricted and military infrastructure under strain, domestic critics increasingly view Iran’s push to ratify the Caspian Sea Convention framework as trading away long-term territorial and seabed leverage before final resource demarcations are settled.
  
  
• Northern Supply Line Friction: Israeli and US air strikes along northern transit corridors demonstrate that the Caspian is no longer a safe logistical sanctuary, reducing its value as a reliable fallback for sanctioned trade with Russia. Trade with Russia not only allows Iran to circumvent sanctions but also serves as its major commercial lifeline amid the repercussions of the U.S.-imposed naval blockade.

Environmental Complications

Objective environmental conditions also create economic and ecological challenges for Iran. One of these is the shrinking coastline of the Caspian Sea.

The Caspian fell by 2 meters during the 20th century, and since 2020 the rate of decline has accelerated significantly, with annual declines of up to 30 centimeters. By 2100, additional losses may range from 9 to 21 meters. A 5-meter drop would reduce the sea’s surface area by 20% (77,000 km2), while an 18-meter drop would reduce it by 37% (143,000 km2).

Iran’s 650-kilometer Caspian coast, including sensitive areas such as Gorgan Bay and Gomishan Lagoon, would face severe consequences from such changes. A 10-meter drop would dry up 80% of the Caspian’s shallow regions, creating vast contaminated, saline dust plains. This kind of desiccation, akin to the Aral Sea disaster, salinizes soil, worsens air quality, and aggravates respiratory problems. The Hyrcanian Forests, a UNESCO World Heritage site extending across Iran and Azerbaijan, are already affected. Rapid desiccation and falling water levels across shallow northern zones are leaving ports such as Bandar Anzali farther from the receding shoreline.

Economic Strain: 

• Given the Caspian Sea’s indispensability to Iran, every effort must be made to prevent further environmental damage. Continuous dredging and infrastructure relocation are costly and drain resources already stretched by Iran’s internal problems and the recent war.
  
  
• For these reasons, the Caspian Sea cannot replace Iran’s strategic access to the Gulf. Although strategically important, the Caspian is landlocked and can support only limited oil exports—roughly 10% of Iran’s production. Its capacity is far smaller than that of southern Gulf ports and moving oil through the Caspian is slower and more costly. Nevertheless, the Caspian remains an essential economic and strategic outlet for Iran, helping to mitigate the effects of sanctions and blockades. It cannot, however, fully replace Hormuz. Iran lacks the pipelines needed to move southern oil northward; even if such pipelines existed, market constraints would remain because the Caspian is enclosed and Russia is already a major oil and gas exporter. Ultimately, the Caspian serves more as a route for commercial goods and military shipments than for oil and gas.

Azerbaijan’s Growing Importance

• Azerbaijan is increasingly positioning itself as a central geopolitical anchor and security guarantor in Eurasia as the balance of power in the Caspian Sea basin shifts. With Russia and Iran, the traditional regional heavyweights, facing reduced naval capacity because of external conflicts and targeted strikes, Baku has taken a proactive stance, modernizing its naval fleet, expanding coastal defense and maritime surveillance capabilities, and deepening strategic security cooperation with the United States and other Western partners.
  
  
• This naval projection is crucial to safeguarding the Trans-Caspian “Middle Corridor,” an increasingly vital trade route connecting Europe and Central Asia while bypassing Russian and Iranian territory. At the same time, long-term environmental challenges—particularly the projected decline in Caspian Sea levels—are reshaping regional logistics and may force Russian military assets southward toward Azerbaijan’s sphere of influence. Together, these military, economic, and ecological dynamics are positioning Baku not only as a pivotal naval authority in the Caspian but also as an indispensable infrastructure hub underpinning trade resilience across Greater Eurasia. Tehran views any strengthening of Baku as inherently detrimental to its interests.

The Parliamentary Ratification Saga

On the anniversary of the Caspian Convention’s signing on August 12, 2018, Iranian Foreign Ministry spokesman Esmail Baghai said the bill on Iran’s accession to the Convention on the Legal Status of the Caspian Sea had been submitted to the Majlis (parliament) for final approval. He said the bill had already passed its first reading after consultations between the government and relevant Majlis committees and expressed hope that lawmakers would ratify it soon. At the same event, Deputy Foreign Minister Kazem Gharibabadi stressed the convention’s importance in “safeguarding Iran’s security and national interests in the Caspian Sea.”

President Masoud Pezeshkian’s cabinet approved the bill on July 22 to expedite Iran’s accession to the convention. Iranian media reported that the bill is intended to complete implementation of the 2018 Aktau convention.

As the Caspian issue returned to the headlines, another wave of broad criticism emerged. Critics focused on several issues, particularly the omission of provisions defining seabed demarcation, a matter that has long been a key point of contention between Iran and the other Caspian littoral states.

The hardline daily Quds reported that the convention does not specify the share of the Caspian allocated to each littoral state and leaves demarcation of the seabed and its resources to future negotiations—a source of concern for Iran, the paper said.

Quds quoted MP Ahmad Bakhshayesh-Ardestani, a member of the Majlis National Security and Foreign Policy Committee, who said Iran should insist on a 20% share of the Caspian.

Mehr quoted international affairs analyst Ahmad Kazemi, who said ratification of the convention would pose a “threat to Iran’s strategic interests.” He argued that it would fulfill “Trump’s wishes” by facilitating access to Central Asian energy resources and thereby reducing the strategic importance of the Strait of Hormuz.

The Tabnak news website criticized the government for focusing on the Caspian issue while Iran is at war with the United States. It noted that Iran’s security and military agencies have repeatedly warned against joining the convention. Shoeib Bahman, a researcher on Russian affairs, called the government’s push for rapid Majlis approval—despite what he sees as the convention’s flaws— “strange.” In an interview, Bahman warned that redefining the Caspian’s status in the convention could allow hostile military forces to operate as close as 200 kilometers from Tehran. He also criticized the government for suddenly granting Azerbaijan a 50 percent share of the Alborz oilfield in 2017, asserting that no explanation was ever given for the decision.

The convention remains the subject of intense discussion on Persian-language social media platforms.

The Caspian States Summit Dilemma

Beyond the criticism, the Iranian regime faced another image problem: a summit of the Caspian states was scheduled to be held in Tehran on August 12. Iranian authorities could not simply cancel it without creating further complications. They correctly estimated that, under the current circumstances, most countries would be unwilling to travel to Tehran. Had that happened, it would have been another humiliation for Tehran: no one would have had any qualms about disrespecting the powerful Iranian neighbor and ignoring its invitation. Yet if Tehran had publicly called off the summit, the other states would inevitably have interpreted the move as weakness.

On August 11, 2026, Iranian Deputy Foreign Minister Kazem Gharibabadi announced that Tehran would host the seventh Conference of the Parties to the Tehran Convention on September 23. At an August 11 ceremony ahead of Iran’s Caspian Sea Day, Gharibabadi said the meeting of the five littoral states would provide an opportunity for bilateral and multilateral talks, strengthen regional cooperation, and lay the groundwork for more constructive interaction. He stressed that Caspian security is a “regional and internal responsibility” and must be maintained by the coastal states through agreed mechanisms. He also reiterated Iran’s opposition to the presence of military forces from non-littoral states, noting that Iran and the other coastal countries share this position. The final sentence of Gharibabadi’s statement hints at Iranian allegations of an Israeli military presence in Azerbaijan.

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