The vice chairman of the Iran-Turkmenistan Joint Chamber of Commerce said, “With the removal of obstacles between the two countries, the Iran-Turkmenistan annual trade can reach $5 billion in less than two years from the current $200 million.”
Majid Jalili told Iran Daily that trade between Tehran and Ashgabat has sharply decreased since 2016 due to gas disputes, adding that to meet its needs, the country has been attracted to other markets in the region, especially Russia and Turkey.
He noted, “This is while Turkmen businessmen are very interested in working with Iranian businessmen and they are willing to cooperate with Iranian traders in meeting their needs and conducting more economic cooperation.”
It was in the winter of 2016 that the gas dispute between Turkmenistan and Iran escalated and Turkmenistan cut off gas supplies to Iran, Jalili said.
He continued that this comes at a time when, under a 25-year agreement signed between Tehran and Ashgabat in 1997, Turkmenistan is required to export between eight billion cubic meters (bcm) and 10 bcm of gas per year to Iran.
The Turkmens have officially said in a statement issued by their Ministry of Foreign Affairs that “the gas cut from Iran has economic reasons,” because the National Iranian Gas Company (NIGC) has not made the necessary arrangements to pay its gas debts since 2013.
On the other hand, the NIGC announced in a statement, “Behaviors contrary to the principles of the contract were committed by the Turkmen company, including cutting off the gas flow in the cold days of 2007, which led to accepting the unreasonable request of the Turkmen Gas Company and increasing gas prices ninefold.”
When the two countries’ gas disputes were not resolved, Turkmenistan took the case to arbitration, where the court has reportedly announced its decision that Iran must pay $2 billion to Turkmenistan.
The gas dispute has caused tensions in the economic and political relations between the two countries, said Jalili, adding that with the court ruling and the payment of Iran’s gas debts to Turkmenistan, the two countries’ political and economic relations will naturally be restored and trade between the two countries will be back to normal.
Iran’s exports to Turkmenistan are very diverse: Food, petrochemicals, steel products, construction materials and techno-engineering services are among Iran’s major export items to Turkmenistan.
Due to the coronavirus pandemic, some restrictions are imposed on border crossings and, accordingly, commercial activity at the borders has significantly decreased, he said, adding that the activity at the border market is not in a favorable condition.
“Of course, in my opinion, the main source of the decrease in trade volume between the two countries is related to the gas dispute, which we hope will be resolved soon,” Jalili noted.
In the past, there was good shipping activity between the two countries; ships regularly moved cargo between the ports of Turkmenistan and Iranian ports of Anzali and Noshahr, which have also been overshadowed by the gas dispute, he added.