Russia and Iran are accelerating their project to rival the Suez Canal

June 24, 2022 at 9:42 am | Published in  Middle East Monitor

Naturally, one of the consequences of the sanctions imposed by Western countries on Russia is to stimulate the latter's search for ways to bypass the restrictions. Since the actions taken by Western countries to punish Russia for its annexation of Crimea and its first intervention in the Donbass region in eastern Ukraine in 2014, Russia has been eagerly working to overcome the obstacles caused by Western decisions regarding its foreign trade.

It is also natural for Iran, which is also suffering from Western sanctions, especially the tough US sanctions imposed on it by Donald Trump in 2018 when he withdrew from the 2015 nuclear agreement. It is natural that Iran and Russia meet in the same endeavour.

From this perspective, Vladimir Putin's war on Ukraine – launched four months ago – delighted Iran's rulers. This war, in addition to weakening Russia's capabilities in other arenas, including the Syrian arena where there is a well-known competition for influence between Moscow and Tehran, could upset the economic relations between Russia and Iran in the interest of the latter.

This is what the Iranian-born researcher Ali Fathallah Nejad indicated in his explanation of Russia changing its position on the Vienna negotiations regarding the US re-joining the nuclear agreement with Iran.

After Moscow requested "written guarantees" from Washington that Western sanctions imposed will not affect its economic and military cooperation with Tehran, Russia announced the solution to the problem with remarkable flexibility. Fathallah Nejad noted: "Liberating Iran from the many sanctions imposed on it may help Russia bypass the heavy sanctions it is now facing." This prompted Moscow to facilitate progress in the Vienna negotiations after blocking them, in order to make the negotiations succeed so that most of the sanctions imposed on Iran are lifted. The researcher went on to say, "It is really a great reversal of what prevailed until now, when Iran was under painful sanctions and looked to Russia for support."

A year ago, after the Suez Canal was closed for six days as a result of a container ship blocking the waterway, the two countries met to stress the importance of accelerating the completion of the International North–South Transport Corridor (INSTC) as an alternative to the Egyptian canal. This crossing is a project approved by Russia, India and Iran exactly 20 years ago (the agreement was signed in May 2002), and a number of Central Asian and Caucasian countries that were formerly Soviet republics participated in it.

The Panama-flagged ship Ever Given which blocked the Suez Canal in March 2021 for nearly a week after getting stuck in its banks [Stringer/Anadolu Agency]

The project aims to establish a transport route from the vast circle of the Indian Ocean, including the Gulf, and not only its Iranian part (the Sultanate of Oman was involved in the project), a road that starts from the Indian port of Mumbai by sea to the port of Bandar Abbas in southern Iran and continues overland by rail to cross Iran, Azerbaijan and Russia from its Caucasian borders to its northern European borders. The project has a second branch that travels from Iran to Russia via the Caspian Sea, and a third that passes through Kazakhstan, Uzbekistan and Turkmenistan in Central Asia. Of course, the land route to the north of Europe through Kazakhstan is a passage that interests China as well, so that the two giants of Asia, China and India, have an alternative to the normal crossing through the Suez Canal, as well as the rest of South and East Asia.

Last week, Iran signed a memorandum of understanding with Russia to facilitate financial and commercial transactions between the two countries against the backdrop of Western sanctions imposed on them. The memorandum provided for "accelerating the North-South crossing project," which is being prepared by means of building the necessary infrastructure for it, including ports, railways and roads. It is inevitable that the project will reduce crossing through the Suez Canal, which is one of the main sources of income for the Egyptian state, as a study prepared by the Shipping Corporation of India estimated that the crossing would save one-third of the cost of going through the Suez Canal and more than half of its duration (23 days instead of 45 to 60 currently).

This article first appeared in Arabic in Al-Quds Al-Arabi on 21 June 2022

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.