Oil, gas and Iran economic analyst
As Azerbaijan and other Caspian Sea states deepen partnerships with Western energy companies to extract more oil and gas from aging offshore fields, Iran stands apart as the only Caspian littoral country that produces no hydrocarbons from the sea at all.
Across the region, governments are racing to modernize reservoir management as competition for long-term gas supply intensifies.
Azerbaijan is pressing ahead with multibillion-dollar pressure-enhancement projects to sustain output from mature fields, while Kazakhstan and Turkmenistan are expanding offshore production with foreign capital and advanced technology.
Western majors, international service firms and even Persian Gulf state companies are reshaping the Caspian’s energy map—locking in production and export capacity for decades.
Iran, by contrast, lacks both the equipment and the partners to participate. Its only seismic survey vessel in the Caspian was decommissioned nearly two decades ago, and its sole offshore drilling platform has remained inactive for years.
The result is not simply underinvestment, but effective exclusion: while neighbors upgrade offshore infrastructure and extend field life, Iran has been left on the sidelines.
Contrast: Azerbaijan
Nowhere is the contrast clearer than in Azerbaijan’s flagship Shah Deniz gas field.
Operated by a consortium led by Britain’s BP, the field has attracted more than $30 billion in investment and supplies gas to Georgia, Turkey and much of Europe.
With production from its active phases expected to decline in the coming decade, Azerbaijan has moved early, signing contracts worth nearly $3 billion for large-scale pressure-enhancement facilities designed to sustain output, cut emissions and unlock additional reserves.
“Eliminating pressure decline is now the central priority,” Elham Shaban, director of the Caspian Oil Studies Center in Azerbaijan, told Iran International, noting that further contracts with Western and domestic firms are expected to be finalized in the coming months.
Iran’s handicap
Iran faces a parallel challenge at home—without comparable tools to address it. South Pars, the giant gas field it shares with Qatar and which supplies roughly 70 percent of Iran’s domestic consumption, has begun to experience pressure decline.
While Qatar installed modern pressure-enhancement systems years ago with Western support and has since signed contracts worth nearly $30 billion to expand production and liquefaction capacity, Iran has turned to local contractors, signing agreements worth $17 billion for smaller platforms and less powerful compressors.
Funding for those projects, however, has yet to materialize. Iranian oil officials have warned that gas shortages this winter could reach a record 300 million cubic meters per day, underscoring the gap between technical need and execution.
The same pattern extends to Iran’s oil sector. Roughly 80 percent of Iran’s producing oil fields are in the second half of their lifespan, with annual decline rates estimated at 8 to 12 percent.
Limited access to advanced recovery technologies has left Iran with a recovery rate of about 24 percent—only marginally above its natural baseline.
Not even China
By comparison, Saudi Arabia has raised recovery rates above 50 percent through decades of cooperation with Western firms, while Azerbaijan extended the life of its Azeri-Chirag-Gunashli fields by signing a long-term redevelopment agreement with BP and its partners.
Elsewhere around the Caspian, foreign capital continues to flow. Kazakhstan has attracted tens of billions of dollars to develop the Kashagan field, the region’s largest, while Turkmenistan’s offshore sector is operated almost entirely by the UAE’s Dragon Oil.
Iran’s Arab neighbours Arab have also expanded into gas development and transport infrastructure, reinforcing a regional energy network from which Tehran remains largely absent, despite its close political ties with Moscow and Beijing.
China, Iran’s largest trading partner, made no direct investment in Iranian or Russian energy projects in the first half of this year, while channeling more than $20 billion into Kazakhstan and the Middle East under its Belt and Road Initiative.
For Iran, sanctions and technological isolation have turned the Caspian from a shared resource into a widening strategic divide.
Tehran’s unveiling of a towering statue depicting the Roman Emperor Valerian kneeling before pre-Islamic Persian King Shapur I has renewed criticism of the Islamic Republic’s appeal to nationalist sentiment following the June war with Israel.
For over forty years, the theocracy purged ancient Persian history from schoolbooks, replacing it with post-Islamic narratives. But after the 12-day conflict with Israel, officials have turned to the distant pre-Islamic past to rally a divided society.
From murals of ancient kings and soldiers to patriotic songs added to Shi’ite mourning ceremonies performed before Supreme Leader Ali Khamenei, Tehran now embraces imagery once deemed heretical by its own revolutionary ethos.
'Kneel before Iran' campaign
Tehran’s Revolution (Enghelab) Square was the scene of an unusual spectacle on Friday as officials unveiled a massive bronze statue depicting Roman Emperor Valerian kneeling in submission before Sassanid King Shapur I, commemorating Iran’s victory at the Battle of Edessa (260 AD).
The event was held under the slogan “Kneel before Iran,” part of what authorities describe as a campaign to project “national unity and historical pride” following the June war with Israel.
Tehran Mayor Alireza Zakani, a staunch ultraconservative, said on X: “Enmity with Great Iran can only end in kneeling before this historic nation.”
Municipal official Davood Goodarzi said the installation would be accompanied by visual displays depicting “other victories of Iranians over foreign aggressors,” including the defeat of British forces by local commander Rais-Ali Delvari, Mirza Kuchak Khan’s resistance against Russian troops, and Surena’s triumph over Rome at the Battle of Carrhae in 53 BCE.
The goal, Goodarzi said, is “strengthening concepts such as national dignity, social unity, and Iranian identity.”
The statue, he said, would remain temporarily at Revolution Square before being moved to a city gateway “where it will stand as the first emblem of Iran before diplomats and foreign visitors.”
Unveiled women were allowed to attend the unveiling ceremony—an uncommon scene at events organized by Tehran’s ultra-hardline municipality.
The turn to the pre-Islamic past
The sharp reversal also recalls remarks once made by Khamenei. In a 2011 speech, he asserted that “all the great military victories of this nation came after Islam,” dismissing pre-Islamic accounts as “things that are not documented.”
In 1987, he had said that prophets triumphed over kings such as Cyrus and that “nothing remains of these monarchs in history but names remembered with derision.”
Nevertheless, pro-government social media accounts have now gone so far as to circulate posters equating Khamenei himself with Shapur, showing him standing with a staff as Benjamin Netanyahu and Donald Trump kneel before him. The caption reads: “You will kneel before Iran.”
'Hypocrisy'
Pro-government figures have hailed the move as a patriotic success. Conservative political reporter Hossein Saremi posted: “Today’s grand Iranian gathering showed that people and the state share one essence: Iran itself. Nothing can take our homeland away.”
Others, however, called the spectacle “hypocrisy.” Journalist Gholamhossein Pashaei wrote on X: “Every year you close Pasargadae to stop people from celebrating Cyrus Day, yet you unveil Shapur’s statue in Enghelab Square with drums and fireworks during Fatimiyya (mourning period)!”
Dissident commentator Hamid Asafi called the ceremony “a perfect snapshot of the Islamic Republic’s contradictions.”
On Telegram he wrote: “A week ago they closed Cyrus’s tomb out of fear of the crowds, and now they glorify Shapur in the same breath. The Islamic Republic fears living history but poses for selfies with its corpse.”
He added: “They know people no longer respond to rosaries and sermons. That’s why they’ve brought history back to the stage—in a controlled costume. If they can’t erase the past, they’ll try to own it.”
The irony deepened as UNESCO formally recognized Cyrus’s Charter as one of the earliest human-rights documents.
President Masoud Pezeshkian wrote on X: “Iran, the cradle of dialogue, justice, and coexistence, can still inspire peace today.”
Users swiftly replied, questioning how such pride could coexist with a government that blocks access to Cyrus’s tomb each year to those wishing to visit it on his birthday.