Iran has urged Caspian oil producers to pipe their oil through Iran, despite US sanctions.

"My message is - and I would like to emphasise - less politics but more economics," said Mahmood Khagani, the Iranian energy ministry's director for Caspian affairs.

"The 'golden gate' from the Caspian Sea to the Persian Gulf is now open," he said.

"Companies working in the Caspian Sea can be sure their resources will be delivered in the international markets," he promised.

There are huge oil reserves in land-locked Kazakhstan, but it is difficult to get the oil to coast for export.

US stance

Piping the oil south through Iran and out into gulf is the quickest and simplest route.

But US sanctions against Iran, together with Iran's own internal politics and a dispute over borders of the Caspian sea, are all deterrents.

Last month, construction began on a multi-billion dollar pipeline to take Caspian Sea oil from Azerbaijan to Turkey via Georgia.

This alternative route has the firm backing of the United States.

And experts say US officials are likely to be angered by the deliberate attempt to try and channel oil through Iran instead.

Bigger than the North Sea

But the plans are still far from finalised.

Kazakhstan officials said they hoped to agree by the end of the year on the feasibility study of such a project.

Meanwhile, the pipeline to Turkey is expected to be completed by the middle of 2004.

Oil transportation from the land-locked Caspian - which could hold more reserves than the North Sea - has been a major problem since western firms started exploring there after the Soviet Union collapsed in 1991.