Russia Refuses to Expand Sea Canal with Iran

The Russian government is refusing to develop the Volga-Caspian Navigation Canal (VKMSK) due to the financial crisis. The canal is used, among other things, for trade with Iran. Vice Prime Minister Vitaly Savelyev informed President Vladimir Putin of the decision in July.

The project was launched in 2023 and has already spent 7.59 billion rubles, and in 2025, an additional 3.53 billion were planned to be spent. However, the level of the Caspian Sea has dropped sharply in recent years, which has increased the cost of the work, and the financial situation of Rosmorport has worsened.

According to government data, ships with a draft of 4.2-4.5 meters make up only 6% of the movement on the canal, so the expansion is no longer profitable and the passage of up to 4.2 meters is enough to maintain cargo turnover.

Iran's plans also include transporting Russian wheat via the Caspian Sea, which would increase the volume of cargo. Experts say that investments in infrastructure projects are difficult to justify due to low demand, but the state must create favorable conditions for development.

The canal was one of the main transit routes for trade relations with Iran.

Info: europetime.eu