Russia and Iran are actively working to launch a giant trade route that will connect Russia to the Indian Ocean, thus making it easier for its companies to access Asian markets. The length of the new trade route will be about 3,000 km and will connect St. Petersburg, Moscow through Tehran, the capital of Iran, with the final destination in Indian Mumbai. Both sides have stepped up the construction of related infrastructure, and are also investing in expanding the transport capacity of ports, river channels and railways along the entire trade route. Investments in the project exceed more than $20 billion, but its main advantage is that it is practically invulnerable to the sanctions pressure of Western countries, Bloomberg notes .
The publication notes that already now dozens of Iranian ships, which are under the sanctions of Western countries, have stepped up their activities in the Caspian Sea and ply along the trade route. The agency calls the convergence of Iran and Russia a prime example of how major powers are ready to change the established economic landscape in an attempt to organize geopolitical blocs. The key goal of the new route is to minimize the intervention of Western countries in the economy and gain access to the booming markets of Asia.
“It’s about creating sanctions-resistant supply chains along the entire trade route,” says Maria Shagina, an expert on sanctions and Russian foreign policy at the London-based International Institute for Strategic Studies.
Shagina estimates the total investment in the project at around $25 billion. She also notes that the implementation of such an ambitious project by two countries under severe sanctions cannot but strain Western countries. They seek to prevent the supply of prohibited goods, primarily weapons, and intend to cover up all the loopholes that the new trade route will create. Iran and Russia will continue to play cat and mouse with the West in this way, the expert is sure.
The American authorities are aware of the project and are actively monitoring its implementation. The White House spokesman, sanctions adviser James O'Brien confirmed that the sanctions against the top management of Russian Railways were imposed, among other things, due to the development of this trade route. He noted that the US administration intends to stop any attempts to circumvent Western sanctions and will work to make the whole world see "that no one can hide." The United States fears that Moscow and Tehran will step up the supply of weapons along the new route so that Russia can continue its military aggression against Ukraine.
However, in addition to the purely military background, the project has broad economic prospects, the agency notes. The publication notes that a lot of energy resources, as well as agricultural products, are traditionally sent along the Volga and Don. The parties have already entered into cooperation agreements that involve the delivery of turbines, polymers, spare parts, and medical goods – something that is now in rather acute shortage inside Russia. In the opposite direction, for example, nuclear fuel for the Iranian reactor in Bushehr goes. For Russia, Iran is another opportunity to redirect part of its production, which was previously sent to European markets.
True, not everyone believes in the total control of the new trade route by the West. For example, Nikolai Kozhanov, an expert on the Persian Gulf from Qatar University, who worked as a Russian diplomat in Tehran from 2006 to 2009, is confident that maritime trade routes can be taken under partial control, but not internal ones, especially when it comes to land routes.
“You can control the sea lanes, but the land lanes are hard to follow. It’s almost impossible to keep track of everyone,” Kozhanov notes.
Russia and Iran look positively at the prospects for bilateral cooperation. During a recent visit to Tehran, the head of the Chamber of Commerce and Industry (CCI), Sergei Katyrin, said that the parties intend to increase trade with Iran by about 8 times – from the current $5 billion to $40 billion. Also, Iran in the very near future may become a member of several state – economic unions. We are talking about the Shanghai Cooperation Organization (SCO), BRICS and even the Eurasian Economic Union (EAEU). The Iranian authorities openly talk about the desire to create an "eastern axis" in order to reduce all contacts with the West to zero. Such thinking, as the agency notes, can lead to the revival of military-political alliances by analogy with the beginning of the 20th century and fragment the world economy.