According to Bloomberg, the two states are spending billions of dollars to speed up delivery of cargoes along rivers and railways linked by the Caspian Sea. Ship–tracking data compiled by Bloomberg indicate dozens of Russian and Iranian vessels, including ships that are subject to sanctions, already utilizing the waters between the country’s Caspian coast and key Volga River ports.
The example shows how great power competition is reshaping trade networks in a world economy that looks set to fragment into rival blocs in a speedy pace. Moscow and Tehran, under sanctions pressure, are turning toward each other and pursuing the Look East policy as well. They plan to protect commercial relations from the West’s interference and create new connections with the fast–growing economies of the Asian continent.
As to the importance of the route for both countries, writers of the article Jonathan Tirone and Golnar Motevalli mentioned that Ships sailing the Don and Volga rivers have traditionally traded energy and agricultural commodities—Iran is the third-largest importer of Russian grain—but the range is set to widen. The two countries have announced a raft of new business deals that cover goods including turbines, polymers, medical supplies and automotive parts. Russia also supplies nuclear fuel and components for Iran’s reactor in Bushehr.
Russia needs to compensate for the sudden breakdown of its commercial ties with Europe, which before the war was its biggest trade partner, as well as finding workarounds for US and European Union sanctions, the report said.
Nikolay Kozhanov, a Gulf expert at Qatar University who served as a Kremlin diplomat in Tehran from 2006 to 2009, noted, “With European transport networks getting closed off, they’re focused on developing alternative trade corridors which support Russia’s turn to the East.”
“You can impose controls over sea routes, but land routes are difficult to watch. It’s almost impossible to track them all,” Kozhanov argued.
Iran’s Maritime News Agency reported that Russia is finalizing rules that would give ships from Iran right of passing along inland waterways on the Volga and Don rivers.
The Tehran–based IRISL made a $10 million investment in a port along the Volga, the semiofficial Iranian Labour News Agency reported last month, Bloomberg reported, adding that the aim is to almost double cargo capacity at the Solyanka Port in the Russian city of Astrakhan, to 85,000 tons a month.
According to the report, trade delegations are shuttling between Iran and Russia with growing frequency—and trade is rising, too. Officially it surged by almost half through August this year. The annual figure likely will soon exceed $5 billion. There’s a “clear path” to reaching $40 billion once a free–trade agreement is in place, Sergey Katyrin, the head of Russia’s Chamber of Commerce and Industry, told a conference in Tehran last month.
Iranian officials say they’re fully focused on what they call “the Eastern axis”, scrapping any plans to revive economic ties with Europe and instead pursuing a slew of trade and energy agreements with Russia, China and Central Asian nations, the article added.
Maria Shagina, an expert on sanctions and Russian foreign policy at the London–based International Institute for Strategic Studies, said, “This is about establishing sanctions–proof supply chains all the way through.”
Bharath Gopalswamy, executive director at District Consultancy LLC, a Washington–based trade adviser said,“For such an infrastructure to be built, used and sustained it would need not only the cooperation of both Russia and Iran but also all the other nations that are part of this corridor".
Gopalswamy noted, “Any change in geopolitical circumstances, or relations between these countries, will affect the trading corridor’s outcome.”
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