The National Security Council (NSA) released new intelligence saying that, in addition to receiving Iranian drone shipments, Russia is sourcing materials from Iran to build a UAV manufacturing facility in the Yelabuga region east of Moscow. According to their satellite imagery and reports, this facility may be operational as early as 2024. 

Evidence of drone shipments is backed by an increased number of Iranian and Russian ships have recorded tracking gaps, indicating that vessels are turning off tracking equipment in order to disguise arms trade shipping routes. 

In response, the Biden Administration has released an advisory to help shed light on “the risks posed by Iran’s UAV program and the illicit practices Iran uses to procure components for it,” and caution businesses and governments from engaging heavily with Tehran. It asks that countries “exercise extra vigilance” to ensure products like electronic circuits, engines, and navigational sensors do not end up in Iran’s hands. The warning includes a list of U.S. export controls that prohibit the sale and transfer of dual-use parts that may be used for military purposes. Sanctions, fines, and criminal charges are potential consequences for any organization or individual that violate U.S. restrictions.  

So far, Russia has imported upwards of 1,700 drones from Iran, which are shipped via the Caspian Sea from Amirabad to the Makhachkala port in Russia. From there, the drones can be transferred through Russia westward to be used in their invasion of Ukraine. The U.S. has issued 8 rounds of sanctions on entities involved in the manufacturing and export of Iranian drones to Russia between September 2022 and April 2023. 

Iran is no stranger to Western-imposed sanctions. The reinstatement of U.S. sanctions in 2018 plunged the country into an economic recession and the U.S. announced more sanctions on Iran as recently as June 2023 in an effort to slow its military programs.

Whether or not these sanctions have had their intended effect is another question entirely—one largely dependent on regional economic relations. Iran has made a strategic effort to expand and strengthen economic ties to Caspian region countries. In effect, this strategy has acted as a safeguarding mechanism against Western economic pressure. The benefits are two-fold: Strengthening the national economy and, simultaneously,  serving as a deterrent against sanctions by opening access to other markets connected to the region like China, India and even Europe.   

This evasion strategy is an integral part of Iranian foreign policy. Tehran’s dealings with neighboring Caspian region countries are largely economically motivated. Easy access to ports along the Caspian shoreline allows for lucrative trading opportunities for energy resources, minerals, and agricultural products. Iran’s President, Ebrahim Raisi, has explicitly said that relations with Central Asian countries are a top priority: “Developing relations with the countries of Central Asia, especially Tajikistan, is one of the first priorities of the foreign policy of the Islamic Republic of Iran,” President Raisi said during his visit to the region in 2022. 

Azerbaijan, Turkmenistan and Kazakhstan all have ports along the border of the Caspian Sea. Though Russia’s invasion of Ukraine has detracted from its once-primary influence in the region, regional politics and close geographical proximity Tehran and Moscow provides little incentive for other Caspian countries to step in. According to Martin Kelly, a lead intelligence analyst at security company EOS Risk Group, the Caspian Sea is the “perfect environment for this trade to go unopposed,” because neighboring countries “don’t have the capability or motive to interdict in these sorts of exchanges.”

Transactional relations between Russia, Iran, and neighboring Caspian region countries have both insulating and enabling effects, allowing for illicit activities such as military equipment transfers with broader international security implications. Despite Russia's diminished influence due to its invasion of Ukraine, regional politics and the close geographical proximity between Tehran and Moscow create little incentive for other Caspian countries to intervene. The Caspian Sea, as the geographical bridge between Europe and Asia, plays a critical role in energy shipments to the West, making it vulnerable to concerning cooperation between Russia and Iran.

While the use of sanctions symbolically undermines malign actions, their efficacy in deterring further actions requires a more nuanced approach. The current U.S. strategy overlooks the strategic importance of the Caspian Sea and its role in facilitating Iran and Russia's evasion of sanctions and arms shipments. This is particularly concerning considering Iran's increased ability to exert influence in the region and capitalize on relationships with more isolated countries. It is important to note that Caspian countries might face difficulties allocating resources or feeling incentivized to police malign activities in the Caspian Sea without the support of the U.S. and the European Union. Regional dynamics have shifted significantly since Russia's invasion of Ukraine, compelling Caspian countries to navigate their relationships with both Russia and the West. The evolving situation in the Caspian region requires careful attention to ensure regional stability and mitigate potential security risks. One way to accomplish this is to engage with Caspian countries directly which will not only inform on the current security status and implications in the region, but may serve to inform effective ways to address and deter.