Military activity in neighboring Iran has begun to directly affect Turkmenistan’s economy. Disruptions to supplies from a key trading partner have triggered a sharp increase in prices for food, household chemicals, building materials, and cigarettes. According to retailers, this may only be the beginning as existing stocks are running low and prices continue to climb.

Despite having domestic production, Turkmenistan remains heavily dependent on imports from Iran, particularly for food products, household chemicals, and construction materials.

The conflict in Iran has disrupted established logistics routes, causing prices for several categories of goods to rise significantly across Turkmenistan.

Vegetables and citrus fruits have seen some of the steepest increases. Prices for potatoes and cucumbers have risen by three to three-and-a-half times, while citrus fruits have become about 50% more expensive. Cigarette prices have already increased by roughly 40%, and traders warn that further rises are likely.

At the end of February, a kilogram of potatoes imported from Iran cost between $1.45 and $1.74 in Ashgabat. The price has now risen to $4.93 per kilogram. A similar trend has been observed for cucumbers, whose price increased from $2.32 to $4.93 per kilogram.

Citrus fruits have become even more expensive. Oranges have risen in price from $2.61 to $5.22 per kilogram, while mandarins have increased from $3.48 to $6.38.

Residents of Turkmenistan are also facing higher prices for household chemicals. Although the increase has not yet been as dramatic, retailers say the upward trend is clear. Tobacco products have also risen significantly in price, with cigarettes increasing by an average of about 35%.

The construction sector has also been affected. Prices for cement, wood, metal, and other building materials have increased by around 40%.

These increases are linked to disruptions in established supply routes. Some construction materials were previously imported from the United Arab Emirates via Iran. Businesses are now being forced to search for alternative logistics routes, including through Georgia and Azerbaijan, which significantly increases transportation costs.

On March 4, customs regulation issues were discussed at a meeting of Turkmenistan’s Security Council.

However, according to a report by the state news agency TDH, the head of the State Customs Service, Maksat Khudaygulyev, did not address the current supply disruptions. His remarks focused on the planned development of the agency.

Price increases linked to events in Iran are not new for Turkmenistan. A similar situation was observed in the summer during the 12-day war.

Supply problems also emerged in the fall of 2024, when Iran temporarily closed its border. During that period, vegetable oil prices increased significantly and shortages were reported.

Turkmenistan views the Trans-Caspian Gas Pipeline project as one of the most important directions for diversifying its energy exports and strengthening energy security on the European continent, Turkmenistan’s former president Gurbanguly Berdymuhamedov said in an interview with the Al Arabiya television channel during his visit to the United States in February, according to official Turkmen media.

The Trans-Caspian Gas Pipeline is a proposed infrastructure project designed to transport natural gas from Turkmenistan to Azerbaijan across the Caspian Sea, where it could connect to the Southern Gas Corridor (SGC).

The SGC is intended to reduce Europe’s dependence on Russian gas and diversify the continent’s energy supplies by bringing natural gas from the Caspian region to European markets. Its primary supply source is Azerbaijan’s Shah Deniz gas field in the Caspian Sea. The corridor stretches from Azerbaijan through Georgia and Türkiye to Greece, Albania, and Italy.

Turkmenistan is widely viewed as a potential additional supplier for the SGC, which could become increasingly important if Azerbaijani gas alone proves insufficient to meet rising European demand.

Berdymuhamedov said that progress on the Trans-Caspian Gas Pipeline requires resolving international legal issues, particularly those related to the delimitation of the Caspian seabed. A Turkmen-Azerbaijani working commission has been established for this purpose.

“We hope that its work will yield significant practical results,” he said.

Berdymuhamedov also emphasized Turkmenistan’s large hydrocarbon resources, noting that the country ranks fourth globally in proven natural gas reserves.

“For some time in the past, the bulk of Turkmen natural gas exports went to Russia, which received up to 40 billion cubic meters per year. Currently, China is our main gas buyer, with supply volumes at roughly the same level,” Berdymuhamedov said.

He added that Turkmenistan’s policy of diversification allows the country to supply gas within the region through swap arrangements involving Iran and Azerbaijan, as well as Kazakhstan, Uzbekistan, and other neighboring states.

Turkey is also considered a key link for potential Turkmen gas exports to Europe.

Turkish Vice President Fuat Oktay previously said that, in cooperation with Azerbaijan, Turkmen natural gas could be transported through the Trans-Anatolian Natural Gas Pipeline (TANAP), which runs across Türkiye and forms the central segment of the Southern Gas Corridor.

Oktay expressed confidence that negotiations between Turkey’s Ministry of Energy and Natural Resources, the Turkish state energy company BOTAŞ, and Turkmenistan’s state-owned gas producer, Türkmengaz, could soon produce positive results.

He also stated that Turkish state companies are ready to participate in the development of hydrocarbon resources at the jointly developed Turkmen-Azerbaijani Dostluk field in the Caspian Sea.

Speaking at the 12th Ministerial Meeting of the Southern Gas Corridor Advisory Council in Baku on March 3, Zafer Demircan, Turkey’s Deputy Minister of Energy and Natural Resources, highlighted the corridor’s strategic importance.

“There is a strong common understanding of the crucial role of the Southern Gas Corridor in achieving long-term energy supply security,” Demircan said. “This valuable concept is evolving toward a Green Energy Corridor linking states in the Caucasus and Central Asia with Europe. Türkiye is the most feasible route not only for natural gas transportation but also for electricity transmission.”

Participants at the Southern Gas Corridor Advisory Council meeting emphasized the system’s growing role in supplying Azerbaijani gas to European markets. According to Azerbaijan’s Ministry of Energy, the country supplied 12.5 billion cubic meters (bcm) of natural gas to EU member states in 2025, a 53.8% increase compared with 2021 levels.

At the same meeting, EU Commissioner for Energy and Housing Dan Jørgensen said that Caspian gas has already contributed to a sharp reduction in Europe’s reliance on Russian energy supplies.

“With the help of Caspian gas, the EU’s dependence on Russian gas fell from 45% of total imports in 2022 to 12% in 2025, and these numbers will continue to fall,” Jørgensen said. “In less than two years, the remaining 35 billion cubic meters of Russian gas that we are still importing every year will be out of our markets.”

Jørgensen also reaffirmed the EU’s commitment to strengthening regional connectivity with the Black Sea region, Turkey, the South Caucasus, and Central Asia.

“The EU stands ready to explore further opportunities to strengthen energy connectivity and the energy transition in the region, including through the mobilization of guarantees and blended finance instruments,” he said.