According to Bloomberg, Russia and Iran are constructing a 3,000-kilometer-long transcontinental commerce corridor from Eastern Europe to the Indian Ocean. The project’s cost is estimated to reach $25 billion.
At the northern end of the trade route is the Sea of Azov, which washes the Crimean Peninsula and connects to the mouth of the Don River. From this place on the global map, river, sea, and rail transport lines lead to Iranian ports on the Caspian Sea. The corridor passes across Iranian territory and terminates in the Indian Ocean.
The new trade route will allow Russia and Iran to expedite the shipment of commodities by river and rail, thereby reducing the delivery distance by thousands of kilometers. In addition, the corridor will be insulated from Western intervention, and member nations will be able to develop supply chains that are resistant to sanctions in Asia’s rapidly expanding economy, according to analysts.
Using ship-tracking data, Bloomberg reported that dozens of Russian and Iranian vessels, including those carrying sanctioned cargoes, already travel on the new route.
“This is an illustration of how great-power competition is fast changing trade networks in a global economy that appears destined to divide into rival blocs. Under immense sanctions pressure, Russia and Iran are gravitating toward each other, and both are also looking east. The objective is to hide business linkages from Western intervention and develop new ones with Asia’s booming economies, according to Bloomberg.
The West is dissatisfied with Russia-Iran cooperation
Concern has been expressed by Western nations regarding the work Russia and Iran are conducting on the new route.
“We are keeping a close eye on both this route and the Iranian-Russian relationship in general. We are concerned about any effort to aid Russia in evading sanctions, US sanctions strategy coordinator James O’Brien was reported as saying by Bloomberg.
Russia and Iran have formed a robust economic alliance by 2022. In 2021, the trade volume between the two nations was little over four billion dollars. In January to October of 2022, trade volumes surpassed those of record-setting 2021. Russia and Iran mostly trade in agricultural products, although the two countries have lately signed deals for the supply of industrial and aviation components to Russia.
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