Russia and Iran sign $1.6 billion deal to complete Baltic Sea to Hormuz rail link

Russia and Iran have signed a $1.6bn agreement to fund the construction of the final 164 km of a rail network from St. Petersburg to Bandar Abbas on the Strait of Hormuz. The North-South Corridor project will be a rail and sea connection that will facilitate Russian land access to the Indian Ocean via Azerbaijani and Iranian railway lines. The still uncompleted section, between Astara and the city of Rasht along the relatively flat coast of the Caspian Sea in Iran, has been delayed by funding issues. 

Cargo operations to Astara have been in operation since 2018, delivering around 400,000 tons of cargo annually to the Iranian side of the border. The railway corridor along with an improved maritime transport link across the Caspian Sea from Iran to the Volga will greatly improve Russia’s ability to import goods through Iran’s main container port. 

The agreement was positively received by the Russian government, but a US State Department spokesman said “any steps or projects being taken to circumvent the sanctions are of course of deep concern to us”. The Iranian and Russian presidents said that the railway corridor would significantly diversify global transport flows. 

In parallel with the agreement, Russia and Iran signed a new agreement to facilitate the expeditious customs clearance of cross-border cargo. This partly stems from Iran’s involvement in providing drone technology to the Russian civil-military war on Ukraine in contravention of international law.

Tags: rail


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