Russia and Iran have had a long history of relations, with both countries once sharing a common border and a shared cultural and linguistic heritage. In recent years, their relationship has grown stronger, particularly in the areas of trade, energy, and military cooperation. One of the main drivers of this closer relationship has been the increased sanctions and pressure from the United States and its allies on both countries. In response, Russia and Iran have sought to increase their economic and political cooperation, with Russia supporting Iran’s efforts to build its nuclear programme and Iran providing Russia with access to the Persian Gulf region.
One of the contemporary cornerstones of the Russia-Iran economic relationship is the creation of the North-South Corridor. This is a new trade route that would expedite the flow of goods from Russia to the Middle East, South Asia, South East Asia and Africa. Due to Russian geography, the current trade route has the Russian goods departing from ports on the Baltic Sea, traveling around Europe, by Gibraltar into the Mediterranean Sea, through the Suez Canal, and then across the Indian Ocean. The North-South Corridor would have the Russian goods exiting Russia at the Caspian Sea, arriving at Iran and traveling overland to the Persian Gulf, and then making the final leg across the ocean to the aforementioned regions. The new trans-continental trade route stretches from the eastern edge of Europe to the Indian Ocean, a 3,000-kilometre (1,860–mile) passage that’s beyond the reach of any foreign intervention.
An analysis of this scheme has found it 30 percent cheaper (saving $2,500 per 18 tons of goods) and 40 percent shorter than the traditional route. This would give Russia’s massive market of energy, minerals and fertilisers much-improved access to Asian giants. This new route would also bypass two major sea gates and strategic rivals, making trade more consistent and independent from international pressures.
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.
In December, listing his country’s gains from the war in Ukraine, President Vladimir Putin said the Sea of Azov “has become an inland sea” for Russia. From there river, sea and rail networks extend to Iranian hubs on the Caspian Sea and ultimately the Indian Ocean. Putin has flagged the importance of that end of the corridor, as well. In addition to it, he underlined the need, in September at an economic forum, to develop the ship, rail and road infrastructure along the route that “will provide Russian companies with new opportunities to enter the markets of Iran, India, the Middle East and Africa, and will facilitate supplies from these countries in return.”
Russia is planning to invest $1 billion to improve navigability across the Azov, into the Don River and across the canal linked to the Volga. Hundreds of ships a day travel through the passage linking the Black and Caspian seas with traffic jams routinely building up around the narrowest points.
Trade delegations are shuttling between Iran and Russia with growing frequency—and trade is rising, too. 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.
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.
That alarms the US and its allies. “It is an area we’re watching carefully, both that route and more generally the Iranian-Russian connection,” said the Biden administration’s top sanctions official, James O’Brien, after announcing new punishments last week that target executives at Russian Railways. “We are concerned with any effort to help Russia evade the sanctions.”
For Iran, the pivot has become more urgent amid faltering efforts to restore the 2015 deal with world powers, which lifted sanctions in exchange for restrictions on the country’s nuclear program. 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.
Whereas, Russia and Iran are cooperating militarily as well. The war in Ukraine is helping both of these countries achieve their respective foreign policy and national security objectives. Iran is among Russia’s most vocal supporters in the war. Tehran has little to do with Ukraine and everything to do with Iran’s long-term strategy vis-a-vis the United States.
As Russia’s war on Ukraine passed six months and continued eroding Russia’s manpower, military stores, economy and diplomatic connections, leader Vladimir Putin opted for an unlikely but necessary Iranian lifeline to salvage victory in Ukraine and also in Syria where, since 2015, Russian soldiers have been fighting to keep Bashar al-Assad’s government in power.
Russia’s plight in Ukraine compelled its leader to solicit Iran’s help in two ways. First, the Islamic Revolutionary Guards Corps, a branch of the Iranian military, provided supplementary manpower to fill the void left when Russia reallocated troops from Syria to its Ukraine campaign. Second, Russia has used Iran’s low-cost and battle-proven unmanned aerial vehicles, commonly known as drones, to counter Kyiv’s Western-supported arsenal and buttress its own struggling forces and surprisingly inept warfighting capabilities.
Iran hosted numerous Russian officers and conducted training on Iranian Shahed-129 and Shahed-191 drone operations. Since acquiring Iranian drones, Russia has launched over 100 Iranian Shahed-136 and Mohajer-6 attack and reconnaissance drones in over a dozen attacks against a large range of targets: Ukrainian special forces, armour and artillery units, air defence and fuel storage facilities, Ukrainian military and energy infrastructure, civilian targets and a recent series of drone and missile attacks against Kyiv.
Precisely, their nexus is growing on multiple fronts, in contemporary times, to counter not only western sanctions but also the western made world order. Their agreed interest is to grow with Asia.