Russia and Iran to invest tens of billions in 3,000-km trade corridor

Russia and Iran build 3,000-km trade corridor worth tens of billions

Russia and Iran build a new 3,000-kilometre-long transcontinental trade corridor from Eastern Europe to the Indian Ocean, Bloomberg said. The project is evaluated up to $25 billion.

At the northern end of the trade route there is the Sea of Azov that washes the Crimean Peninsula, the new Russian territories that are connected with the mouth of the Don River. River, sea and rail transport routes lead from this point of the world map to Iranian ports in the Caspian Sea. The corridor runs through the territory of Iran and ends in the Indian Ocean.

The new trade route will give Russia and Iran an opportunity to speed up the transportation of goods by rivers and railways and thus cut the delivery route by thousands of kilometres. In addition, the corridor will be isolated from the interference of Western countries, and partner countries will be able to establish supply chains that will be resistant to sanctions in the fast-growing economies of Asia, analysts say.

Dozens of Russian and Iranian vessels, including those carrying sanctioned cargoes, already travel on the new route, Bloomberg said with reference to ship-tracking data.

"It's an example of how great-power competition is rapidly reshaping trade networks in a world economy that looks set to fragment into rival blocs. Russia and Iran, under tremendous pressure from sanctions, are turning toward each other-and they're both looking eastward, too. The goal is to shield commercial links from Western interference and build new ones with the giant and fast-growing economies of Asia," Bloomberg wrote.

The West unhappy about Russia-Iran cooperation

Western countries are concerned about the work that Russia and Iran conduct on the new route.

"It is an area we're watching carefully, both that route and more generally the Iranian-Russian connection. We are concerned with any effort to help Russia evade the sanctions,” Bloomberg quoted US sanctions policy coordinator James O'Brien as saying.

In 2022, Russia and Iran have developed a close economic partnership. The trade turnover between the two countries in 2021 amounted to just over four billion dollars. In January-October 2022, trade volumes exceeded the figures for the entire record-breaking 2021. Russia and Iran mainly trade in agricultural products, but recently the parties entered into agreements on the supplies of machinery products to Russia, as well as parts and equipment for civil aircraft.

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Author`s name Petr Ermilin
Editor Dmitry Sudakov