top of page

Landmark Russian Cargo Transit to Saudi Arabia via Iran's

Updated: Oct 1, 2023




The head of the Islamic Republic of Iran Railways (RAI) has unveiled a significant milestone in global trade connectivity with the successful transit (Aug 26) of Russian cargo to Saudi Arabia through Iran's transport corridor. This groundbreaking event, achieved through the International North-South Transport Corridor (INSTC), highlights Iran's strategic position as a trade hub and sets the stage for enhanced regional economic integration. This achievement comes as Iran seeks avenues for economic growth, navigating the evolving geopolitical landscape and deepening its engagement with emerging economies, such as the BRICS group.


The head of the Islamic Republic of Iran Railways (RAI) revealed the inaugural transit of a Russian cargo to Saudi Arabia using the Iran transport corridor. This event involved a train comprising 36 containers, marking the first instance of such transit from Russia to Saudi Arabia through Iran's Incheh Borun rail border.


Miad Salehi, the deputy roads minister, noted that following the completion of customs procedures, the cargo train was dispatched to Bandar Abbas. From there, it will be transported to the Saudi Arabian port of Jeddah.


The inaugural rail transit of goods from Russia to Saudi Arabia via the Iran corridor signifies a significant development within the International North-South Transport Corridor (INSTC). The cargo's entry through the Incheh-Boroun border crossing with Turkmenistan, heading to Bandar Abbas in the south, marks a milestone in enhancing trade connectivity.


The train's journey aiming to reduce delivery time by several days compared to existing routes. The reduced cost of transit within the INSTC due to lowered customs tariffs further strengthens the appeal of this corridor.


According to the Tehran Times, the initiative holds broader implications, with nearly $250 billion of products from Indian, Chinese, and East Asian markets anticipated to be transported to Europe through the corridor. The corridor's multi-modal network facilitates cargo movement across countries, with Iran's geographically strategic position playing a pivotal role in connecting India to Russia.


Iran's geographical location as a bridge between Russia and Saudi Arabia is strategically essential. Iran's involvement in facilitating this rail transit allows it to demonstrate its geopolitical significance as a transit hub and gain economic benefits.


Amid Moscow's engagement in the conflict with Ukraine, Iran has emerged as a primary supplier of drones to Russia, strengthening ties between the two nations. Simultaneously, both countries, facing American sanctions, have been independently pursuing strategies to navigate these restrictions. They are collaborating on creating an alternative payment mechanism and seeking means to reduce their reliance on the U.S. dollar.


Ultimately, the INSTC significantly bolsters Iran's and Russia's trade links with the Caspian Sea and the Persian Gulf nations, introducing a new paradigm for regional economic integration and cooperation. For Iran, establishing this transit corridor could offer economic benefits, mainly if it helps Iran overcome some of the limitations posed by international sanctions. Participating in regional trade and transit initiatives could be part of Iran's efforts to mitigate the economic impact of sanctions.


In light of this, Iran, Saudi Arabia, and Argentina have received formal invitations to become members of the BRICS (Brazil, Russia, India, China, and South Africa) international group, with their participation set to commence at the start of the upcoming year. According to Hamid Padash, who holds a Ph.D. in Economics from the University of Tehran, Iran's inclusion in BRICS is a compelling indicator of a shift in the global economic trajectory toward a non-western paradigm.




Ali Akbar Velayati, the Leader's international affairs advisor, commented that Iran's BRICS membership has rattled regional nations' reliance on the U.S., prompting a shift towards an East-oriented approach and stronger collaboration among neighboring countries. He emphasized that Iran's foreign policies have successfully countered America's longstanding isolation efforts. Velayati further noted that the shortcomings of these policies have become more apparent since Iran officially joined the Shanghai Cooperation Organization (SCO), headquartered in China. The SCO comprises eight member countries, including Russia, India, Pakistan, and Central Asian nations such as Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan.


Iran's recent membership effort to join the BRICS group of emerging economies marks another significant development with extensive implications at national, regional, and global levels. This move holds strategic importance for Iran and the BRICS members, including China and Russia. Iran seeks avenues to boost economic growth and navigate the region's changing geopolitical landscape. Iran's diplomatic ties with all five key BRICS nations form a solid foundation for its integration into the group.


The two major financial institutions within BRICS - the New Development Bank and the BRICS Contingent Reserve Arrangement - have become vital conduits for Iran's access to resources despite U.S. economic sanctions. These institutions employ mechanisms such as national currency loans, cryptocurrency, and currency swaps, offering avenues for Iran to mitigate the impact of sanctions on its economic progress.


By participating in such initiatives, Iran can demonstrate its willingness to engage in economic activities and showcase its capacity to facilitate the movement of goods across borders. This could potentially contribute to Iran's efforts to mitigate the impact of sanctions by demonstrating its economic resilience and diversification.


However, the path to integration is not without its challenges. Iran's harmonization with the economic policies, regulatory frameworks, and commercial laws of BRICS members requires careful coordination and expert reviews. Yet, the geo-economic advantages of membership far outweigh these complexities.

bottom of page