How has the tension around the Strait of Hormuz affected cargo delivery to Azerbaijan?

Tensions around the Strait of Hormuz have impacted the operations of small and medium-sized businesses in Azerbaijan that trade with Persian Gulf countries.

As reported by Baku TV, in particular, as a result of the suspension of container shipments by cargo transportation companies, goods remain in port storage areas for extended periods, leading to additional costs and penalties.

According to lawyer Akram Hasanov, in such cases, liability is determined based on the terms of the contract between the parties. He noted that disputes are resolved within the framework of how risk distribution is stipulated in the contract.

Lawyer Vusal Jafarov, in turn, said that a significant change in the circumstances that were taken as the basis for concluding the contract may create a legal basis for its amendment or termination. If the parties are unable to reach an agreement, the matter may be resolved through the courts.

He also added that if one of the parties is located abroad, the contract usually specifies under which country's legislation potential disputes will be considered.

It is emphasized that this problem highlights the relevance of alternative cargo transportation routes. Economist Khalid Karimli reported that imports from eastern countries to Azerbaijan were traditionally carried out via two maritime routes: through Iran - the port of Bandar Abbas, and through Georgia - the port of Poti with access to the Black Sea.

According to him, the Iranian route was shorter and cheaper, which is why it was used more frequently. Currently, the Middle Corridor through Central Asia and the Caspian Sea is also being utilized as an alternative.

The cost of transportation via the Middle Corridor is approximately the same as via the route through Poti, however it offers the possibility of delivery in shorter timeframes. At the same time, the expert notes that while shipping one container through Iran costs 4,000-4,500 dollars, via the other mentioned routes this figure exceeds 7,000 dollars.