One report said five onboard the ferry were rescued.
The Mercury II freight and passenger ferry was making its way from the port of Aktau, Kazakhstan, heading southwest to the Azerbaijani capital Baku when it sank, said a spokesman for CASPAR, the shipping company that owns the ferry.
The ferry sank at 10:43 a.m. in stormy weather about 80 miles from Baku, the company said. There were eight passengers aboard, along with 43 crew, and 16 tanks of oil in the cargo hold.
An initial report that all aboard the ferry were dead could not be confirmed. The ITAR-Tass news agency reported that least five people had been rescued. The Interfax news agency said heavy rain and high winds at the rescue site complicated searchers' efforts.
The office of Azerbaijani President Geidar Aliev said that five ships and five helicopters were dispatched for a search-and-rescue mission. He held an emergency meeting with top officials to hear reports of the disaster and set up a special commission to find out why the boat sank.
The 505-foot, 12,320-ton ferry was not far from floating platforms near an oil drilling project when it sank, Interfax reported. The Caspian Sea is believed to hold the world's third largest oil and gas reserves.
By Aida Sultanova