Summary

Can Russia serve as an economic lifeline for Iran amid the Hormuz blockade? Analysts say that Moscow could offer a ‘lifeline’ in troubled times, but logistical issues and costs of new trade routes would offer little long term incentives. Iran FM in Russia says US has offered new round of talks As Iran stares down the economic consequences of a prolonged blockade of the Strait of Hormuz, attention is shifting north. With Gulf shipping lanes disrupted and oil exports constrained, Tehran may seek to depend less on the Gulf and more on a patchwork of railways, Caspian ports and sanctions-era trade networks linking it to Russia. Recommended Storieslist of 4 items - list 1 of 4Iran’s foreign minister in Russia for talks - list 2 of 4NPT summit: Can nuclear pact survive US-Israel war on Iran? - list 3 of 4Iran FM in Russia says US has offered new round of talks - list 4 of 4Iran war: What’s happening on day 60 as diplomacy gathers pace? The importance of that relationship was underscored this week when Iranian Foreign Minister Abbas Araghchi travelled to St Petersburg for talks with Russia’s President Vladimir Putin, praising Moscow’s “firm and unshaken” support as the two sides discussed the war, sanctions and the future of the Strait of Hormuz. But could Moscow really offer a lifeline for Iran’s beleaguered, war-torn economy, and would it even want to? We spoke to experts to find out. Increasing but modest bilateral trade Economic relations between Iran and Russia deepened after the US withdrew from a 2015 nuclear deal with Iran and other nations in 2018 and reimposed sweeping sanctions on Tehran. Russia’s full-scale invasion of Ukraine in 2022 served to accelerate that trend as both countries found themselves increasingly cut off from the Western financial system. They turned to sanctions-evasion networks, alternative payment systems and non-Western trade corridors to keep goods, energy and money flowing. Current trade is dominated by agricultural products – especially wheat, barley and corn – alongside machinery, metals, timber, fertilisers and industrial inputs. Tehran has also supplied Russia with low-cost Shahed drones, which Russia updated and has been using in its war on Ukraine. “Trade turnover reached $4.8bn last year [2024], but we believe that the potential for our mutual trade is much greater,” Russian Energy Minister Sergey Tsivilyov told an intergovernmental commission on trade and economic cooperation between Moscow and Tehran in 2025. Bilateral trade is reported to have increased by 16 percent during that period, driven largely by Russian exports of grain, metals, machinery and industrial goods. But experts say that despite this increase, the overall trade relationship remains relatively modest compared with Iran’s trade with China or the Gulf countries. Trade between the two is “not substantial, because both countries are producing almost similar products and the industries are similar”, Mahdi Ghodsi, an economist at the Vienna Institute for International Economic Studies, told Al Jazeera. Alternatives to Hormuz The backbone of Russia-Iran trade is the International North-South Transport Corridor (INSTC), a network of shipping lanes, railways, and roads linking Russia to Iran and onward to Asia, bypassing Western-controlled maritime routes. Goods move from southern Russian ports, across the Caspian Sea to northern Iranian ports, including Bandar Anzali, before continuing by rail or truck. The route has become increasingly important for Russian grain, machinery and industrial exports to Iran. This route can serve as a “viable but partial lifeline”, Naeem Aslam, chief market analyst at London-based Think Markets, told Al Jazeera, adding that Russian ports in Astrakhan, on the Volga River delta near the Caspian Sea, and Makhachkala, on the Caspian Sea, are already “primed for a surge in grain, metals, timber and refined products”. A western branch also runs through Azerbaijan, though a key missing rail link between Rasht and Astara in northern Iran remains unfinished. In 2023, Moscow agreed to help finance the line, with Russia’s president calling the agreement a “great event” that “will help to significantly diversify global traffic flows”. Easier in theory than in practice Analysts say that, although these routes may provide a temporary solution, the Strait of Hormuz offers a scale and efficiency that rail and land corridors cannot easily replicate. Although maritime trade has been highly volatile in recent weeks, “from a historical perspective it is simply the quickest and the most cost-effective way of transporting anything”, Adam Grimshaw, an economic historian at the University of Helsinki, told Al Jazeera. “Roughly 90 percent of Iran’s international trade is maritime trade that goes through the Gulf, which can’t be quickly or immediately replaced through land access to Iran or through air transport to circumvent the American blockade”, Nader Hashemi, an associate professor at Georgetown University, told Al Jazeera. Ghodsi said Russia might be able to offer a “lifeline” in the short term, as it did when it exported grain during Iran’s droughts, but in the long run, it simply “cannot substitute” the vast amounts of maritime trade. Re-routing trade routes via land “takes time”, pushing up prices for consumers and creating more food waste as perishables rot en route. Does Moscow want to help Iran? Most analysts say throwing an economic lifeline to Iran is not in Russia’s interests. “They’ve got their own economic problems,” John Lough, head of foreign policy at the New Eurasian Strategies Centre, told Al Jazeera, pointing to signs of stagnation inside Russia, pressure on reserves and growing frustration over the prolonged war in Ukraine. While Moscow could offer symbolic support or limited humanitarian assistance, “now is not a good time” to invest in Iran, he said, referring to the US-Israel war on the country. Replacing maritime trade with overland routes would be extremely difficult, despite years of discussion about alternative corridors linking the two nations, he said. It also won’t necessarily help Iran’s economy, which needs all the export revenue it can get, experts say. “Much of Iran’s economy revolves around the sale of oil, and with that blocked or prevented by the American blockade, Russia really can’t help in that regard”, Hashemi said. Others are more optimistic, however. “Propping [up] Iran locks in higher global oil prices that buoy Russia’s war economy, cements INSTC dominance for Asian trade, and keeps a key anti-Western ally alive – no downside for Moscow in a fragmented Gulf,” Aslaam said.