The first Russian rail transit passing Iran and its message for U.S.

The first rail cargo left Moscow railway station into India on 27th June as a significant message from Moscow to the West in spite of the imposed US tight sanctions.  

The first freight train started its journey into Iran from Chekhov railway station of Moscow on 27th June carrying 39 containers. This train passed the route of Russia-Kazakhstan-Turkmenistan into Iran within 14 days and estimated to arrive Bandar Abbas Port within 6 days by start of its journey from Sarakhs rail border located in North-eastern of Iran.

This is the first train of the International North – South Corridor (INSTC) which has started its journey from the eastern branch of the mentioned rail corridor while Rostam Qasemi, the Minister of Roads and Urban Development of Iran has promised to activate the middle and western branches of this corridor in near future.

The fast warming relations between Tehran and Moscow

According to the officials of Iran and India, the INSC corridor route is 30% cheaper and 40%shorter than the traditional linkage between Russia and India passing Suez Canal while there is no threat like pirates of Somalia on the route.

Regardless of the mentioned commercial benefits of INSTC, there is significant message from Russia and its regional allies like Iran to the Washington and EU: ”We try to counter imposed economic sanctions”.

While President Obama achieved the first worthy agreement with Iran after Islamic revolution, president Trump as his successor selected the wrong way to dismantle JCPOA and maximum pressure campaign toward Iran in order to get more points from Tehran while he never paid attention that JCPOA could be the start of a great way to enjoy geopolitical and economic relations with Tehran by opening the cooperation window between the two sides. What president Trump expected from the agreement was reaching maximum benefits from it in minimum time and keeping Tehran under pressure at the same time.

This policy pushed the US government into exit from the JCPOA as President Biden called this wrong action many times. The result was clear: moving into deepening strategic relations between Tehran and Moscow within short time especially after implementation of Ayatollah Khamenei’s “turning into the East” macro policy after US exit from the agreement.

After expansion the Russia – Ukraine war and imposing heavy economic sanctions against Russia, the transit routes were among the first targets of these sanctions while the EU goal was putting high restriction on Russia in supplement of its needs from abroad. But once again the West forgot a significant element for Russia accessibility to the free waters: ”Iran”.

After US exit from the JCPOA, the foreign policy of President Rouhani as the initiator of the agreement fully collapsed under pressure of the anti-US and JCPOA tenacious critics. The deal opponents asked the Rouhani’s government to replace Russia and China with 5+1 group as soon as possible while the nature of Rouhani’s cabinet and ruling party didn’t allow this policy to be implemented during his term. In the other hand, Moscow as one of the main political partners of Iran was not liked to join partnership with Tehran in fear of the West sanctions against Iran in practice.

By this introduction, we can understand the main reason behind the fast growing relations between Moscow and Tehran during past months now: ”the both sides are in the same boat now and there is no longer need for scaring from the Western sanctions”.

The significance of INSC route for Russia and Iran

After end of Iran-Iraq war, Moscow signed many agreements with Tehran in various infrastructural fields while some of them like construction of Garmsar – Incheh Borun as the first light rail of Iran with 465 km length never executed because of imposed sanctions against Iran and its banking system.

But now, it seems many things are changed in Russia after entering war with Ukraine. Russia even has stated its readiness to construct the Rasht – Astara rail route instead of the Republic of Azerbaijan who never started the project on the pretext of the sanctions and impossibility of transferring the 500 million USD required budget to construct the project while this route is the only missing link of the Western branch of the INSC. The question is why Russia has changed its foreign policy toward Iran? The answer is simple: Iran is the shortest, cheapest and safest linking route between Russia and the warm waters of the Persian Gulf according to the Peter the Great recommendations while Sir Halford John Mackinder also ratified the geopolitical significance of Iran calling the country as the heartland.

While INSC could link Russia to India as one of its main Asian partners through Nhava Sheva Port, the southern waters of Iran enable Russia to be linked to the important industrial ports of China like Shanghai which are the main freight hubs of the world and can fulfil many of the required raw materials and strategic products for Russia as President Putin rightly noted during his speech in BRICS Summit on 7th of June.

According to the Iranian officials, the annual income of this country from INSTC is estimated around 20 billion USD while the total oil income of Iran is announced 43 billion USD by its Ministry of Oil. Plus financial benefits, Iran could re-enjoy its geopolitical significance after about 20 years of sanctions pressure. This ability increases the negotiation power of the Iranian officials in regional and trans – regional role playing like joining SCO.

US sanctions and the future of Tehran – Moscow relations

As mentioned before, US economic and political sanctions against Tehran and Moscow not only couldn’t  push the foreign policy of Tehran and Moscow into defensive mode, but the sanctions made some inclusive opportunities for the two states and threatened the energy security of EU. Iran easily attracted the support of Russia to enter its infrastructural projects thanks to increasing pressure of West on Moscow. In the other side, Russia succeeds to capture many mega infrastructural projects of Iran in absence of the Western famous companies after collapse of the JCPOA. That is estimated that the commercial and political relations between Tehran and Moscow will be expanded during coming months parallel to probable increasing US sanctions against the two capitals.

 Just taking a simple look to this circle demonstrates why President Biden always calls US withdrawal from JCPOA as wrong action.

JCPOA, the only tool to balance Tehran – Moscow relations

It seems the only way to reduce the speed of the fast increasing relations between Tehran and Moscow is re-joining of Washington to the JCPOA as soon as possible. To understand the significance of this issue, it is better to think what will happen if Washington doesn’t accept to re-join the deal with Iran.

The first consequence is clear: deepening the relations between Tehran and Moscow as vulnerable issue. This issue helps both Iran and Russia to fulfil their basic needs without relying the West. We should never forget that Russia is one of the main suppliers of food and strategic agricultural products like wheat or vegetable oil and limiting export of such agricultural products have fallen the world food security in a dangerous condition as UN has warned many times. 

Second, the time is great and no actor in international system is allowed to lose it. Increasing the national income and its GDP, will put Tehran in better position and decreases its current facing limitations. Thus, postponement of joining JCPOA by Washington just makes the work harder to achieve any good deal with Tehran.

Third, while India was participating in QUAD Summit beside of US, Israel and UAE, the New Delhi officials are in serious negotiations with Moscow on expansion of its market in Russia as President Putin also ratified this issue during his speech in BRICS Summit. While the West is challenging its economic inflation and recession, its Asian allies like India are seeking for more opportunities in Russia to capture the considerable part of its market which was in hands of the American and European companies till few weeks ago. In this regard, we can expect more presence of Indian companies in the markets of Iran and Russia without any competition with Western companies thanks to INSTC that is able to carry huge amount of Indian freight toward Iran and Russia eager market.

Fourth, by expansion of Digital Economy concept, we are witnessed for many financial innovations like blockchain technology which makes Iran and the other sanctioned states like Russia and Venezuela more comfort to bypass the financial limitations. For example, it is better to take a look to the Russian governmental blockchain called ”CELLS” that is designed and developed by ROSTEC state company based on digital Rubble and more countries are expected to join it according to the Russian officials. Moscow believes that CELL could be replaced to SWIFT for its international financial transactions with its allies. While the financial issues have been always the Achilles Heel of the sanctions, nobody knows what will happen to efficiency level of them if such alternative choices of SWIFT get operational.

Vahid Pourtajrishi
Vahid Pourtajrishi
Vahid Pourtajrishi is an expert at planning unit of the department of the international affairs of the Railways of the Islamic Republic of Iran. He has worked as journalist at correspondent of Mehr News Agency.