Despite the recent escalation between Israel/United States and Iran, the latter’s cooperation with Russia on the development of the North-South corridor is expected to continue. As Russo-Iranian relations have grown increasingly aligned since 2022 when the war in Ukraine broke out and the West imposed heavy sanctions on Moscow, one of the most important projects underscoring Russia’s pivot to the Middle East has been the International North-South Transport Corridor (INSTC). The project would allow Russia to alleviate pressure from the collective West, and its successful completion would also signal Russia’s turn to the Global South. More specifically, the corridor would create a land route from Russia to the southern ports of Iran, including the most important one – Bandar Abbas. Ideally, the route is expected to change global logistics and reduce delivery times by 30-40 percent compared to traditional sea routes through the Suez Canal.

The progress on the INSTC has indeed been evident. For instance, an agreement on the joint implementation of the project between Moscow and Tehran was reached in 2023. The goal was to complete the last section of the railway of the western branch of the corridor, which runs through Azerbaijan all along the western coast of the Caspian Sea. The incomplete railway line lies between the cities of Rasht and Astara, both located in the north of Iran. The total cost of the project is $1.6 billion. Out of this amount, $1.3 billion will be a Russian loan, and about $300 million is pledged by the Iranian side. The plan is to construct 18 tunnels and, given the mountainous terrain, the construction will require special engineering skills, driving the cost of the project up. The choice of track has been another problem. The two sides decided that the railway will combine two standards – European (1435 mm) and Russian (1520 mm) – aiming to increase the effectiveness of the project.

The Russian and Iranian sides have been actively promoting the INSTC. Just before the Israeli-American attacks on Iran, Russian Deputy Prime Minister Vitaly Savelyev, in an interview with the Russia-24 TV channel at the St. Petersburg International Economic Forum, argued that Russia had not stopped work on the Rasht-Astara railway section. Moreover, according to Russian Transport Minister Roman Starovoit, Iran and Russia have also carried out engineering and geological surveys on the Rasht-Astara section. This stage will be followed by the actual construction work of a 162-kilometer railway section between the two cities. Earlier this year, during the III Caspian Economic Forum in Tehran, representatives of the Caspian Five countries (Russia, Azerbaijan, Kazakhstan, Iran, Turkmenistan), as well as the Prime Minister of Tajikistan as an honorary guest, discussed the prospects for the development of Eurasian connectivity. Among the projects, the Trans-Caspian International Transport Corridor (TITC), the INSTC, and the Caspian Sea-Persian Gulf route were discussed.

The Iranian side has assessed that the Rasht-Astara railway line can be built only by the end of 2029. But until then, products will continue to be transported between Rasht and Astara by trucks, which slows down logistics and increases costs. Moreover, there are also geopolitical factors which might complicate the progress on the project. Should the confrontation between Iran and Israel continue, further delays to the INSTC’s completion are expected. Another problem is the existing sanctions regime imposed on the Islamic Republic. When completed, the Rasht-Astara railway route will ensure the continuous movement of goods from Russia through Iran to the ports of the Persian Gulf, Indian Ocean, and potentially even the eastern shore of the African continent. The route can also reduce delivery times by 30-40% compared to traditional sea routes through the Suez Canal. By 2030, freight traffic along the corridor could amount to 25 to 32 million tonnes.

As a further boost to the operation of the corridor, in May an agreement on the creation of a free trade zone between Tehran and the Eurasian Economic Union came into force. The EAEU countries will now have broader access to the Iranian market with a significant reduction in trade barriers. With Armenia (an EAEU member) as a neighbor, Iran is now hoping for greater commercial ties with the bloc.

All policy moves made by Russia and Iran over the past months indicate that the two countries will continue their work on the further development of the INSTC. Irrespective of how Iran’s nuclear program saga evolves and how Russia’s own relations with the United States develop, Moscow and Tehran have shared interests when it comes to Eurasian connectivity. Both seek to minimize the effects of Western sanctions and leverage their geography – the INSTC runs exactly along the geographies which were actively used by merchants in ancient and medieval times to link the Middle East with the Eurasian steppes and the European continent. In short, Israel’s and the United States’ attacks on Iran’s nuclear and military infrastructure highlighted the vulnerability of the Russia-Iran cooperation. Though one of the areas which could potentially be most impacted is the INSTC, Moscow and Tehran seem intent on pushing the project forward.

Emil Avdaliani is a research fellow at the Turan Research Center and a professor of international relations at the European University in Tbilisi, Georgia. His research focuses on the history of silk roads and the interests of great powers in the Middle East and the Caucasus.