The Islamic Republic of Iran Shipping Lines has ordered a new cargo vessel from Russia to operate from Russia’s Caspian Sea port of Solyanka.
This will help develop cargo trade between the two countries, PortSEurope wrote, adding that the order marks a further development in commercial relations between Russia and Iran.
A contract to build the general cargo vessel with a capacity of 200 containers was signed between Russian ship construction authorities and Solyanka Port officials, Fars News Agency reported on Wednesday.
CEO of the Islamic Republic of Iran Shipping Lines Group Mohammad Reza Modarres Khiyabani said during the signing ceremony that the ship is scheduled to be constructed within nine months.
“We hope to be able to sign more such contracts with the Russian side. With the increased activity of IRISL Group in the Caspian Sea, commercial interactions between Iran and the southern provinces of Russia and particularly ports located in Astrakhan has grown,” he said.
Mehdi Akouchkian, Iran’s consul general in Astrakhan, said by increasing the number of ships that commute to and from Solyanka Port, end prices of Iranian and Russian export goods will decline.
“Launching more vessels in the Caspian Sea will help promote the International North-South Transportation Corridor. To do so, we also need to develop port infrastructure and equipment in Iran and Solyanka Port,” he added.
The Islamic Republic of Iran Shipping Line Group said in November that it has invested $10 million in Solyanka Port of Russia’s Astrakhan.
Part of this investment, which has been funded through Russian banking loans, has gone to purchase a vessel with a capacity of 270 containers. The wharfs and inner roads of the port have also been overhauled, ILNA reported.
Loading and unloading at Solyanka Port prior to IRISL Group’s investment stood around 50,000 tons per month. Estimates are that the figure will rise by 70% to reach 85,000 tons per month after investments come to fruition.
The port registered 470,000 tons in throughput during the first nine months of 2022, indicating a 30% increase compared with the similar period of last year.
Solyanka accounts for around 20% of Astrakhan ports’ total throughput. It spans 150,000 square meters, has five wharfs and 11,600 roofed warehouses.
IRISL is the biggest player in Iran’s transportation sector.
Transcontinental Trade Route
Russia and Iran are building a new transcontinental trade route stretching from the eastern edge of Europe to the Indian Ocean, a 3,000–kilometer (1,860–mile) passage that’s beyond the reach of any foreign intervention.
The two countries are spending billions of dollars to speed up delivery of cargos along rivers and railroads linked by the Caspian Sea. Ship–tracking data compiled by Bloomberg show dozens of Russian and Iranian vessels, including some that are subject to sanctions, are already plying the route.
It’s an example of how great–power competition is rapidly reshaping trade networks in a world economy that looks set to fragment into rival blocs. Russia and Iran, under tremendous pressure from sanctions, are turning toward each other while looking eastward. The goal is to shield commercial links from Western interference and build new ones with the giant and fast–growing economies of Asia.
New routes via Iran will cut thousands of kilometers from transportation routes.
“This is about establishing sanctions–proof supply chains all the way through,” says Maria Shagina, an expert on sanctions and Russian foreign policy at the London–based International Institute for Strategic Studies.
At its northern end is the Sea of Azov, which is bracketed by the Crimean Peninsula, Ukraine’s southeastern coast, including the Russian–occupied port of Mariupol, and the mouth of the River Don.
Earlier this month, listing his country’s gains from the war in Ukraine, President Vladimir Putin said the Sea of Azov “has become an inland sea” for Russia.
From there, river, sea and rail networks extend to Iranian hubs on the Caspian Sea and ultimately the Indian Ocean. Putin has flagged the importance of that end of the corridor, as well.
At an economic forum in September, he underlined the need to develop the ship, rail and road infrastructure along the route that “will provide Russian companies with new opportunities to enter the markets of Iran, India, the Middle East and Africa, and will facilitate supplies from these countries in return.”
Shagina estimates Russia and Iran are investing as much as $25 billion in the inland trade corridor, helping to facilitate the flow of goods the West wants to stop.
There are compelling economic reasons for the new transit route.
Ships sailing the Don and Volga rivers have traditionally traded energy and agricultural commodities—Iran is the third-largest importer of Russian grain—but the range is set to widen.
The two countries have announced a raft of new business deals that cover goods including turbines, polymers, medical supplies and automotive parts.
Russia needs to compensate for the sudden breakdown of its commercial ties with Europe, which before the war was its biggest trade partner, as well as finding workarounds for US and European Union sanctions.
“With European transport networks getting closed off, they’re focused on developing alternative trade corridors which support Russia’s turn to the East,” says Nikolay Kozhanov, a Persian Gulf expert at Qatar University who served as a Kremlin diplomat in Tehran from 2006 to 2009. “You can impose controls over sea routes, but land routes are difficult to watch. It’s almost impossible to track them all.”
There are plenty of obstacles, and both Russia and Iran are spending heavily to overcome them.
Iran Starts Repairing Russian Cargo Ship Damaged by Icebergs
The acting head of the Iranian Marine Industrial Company, Meysam Rayatazad recently said a Russian bulk carrier is being repaired in Iran after being damaged by icebergs on the Volga River.
“A Russian vessel entered a shipyard owned by IMIC’s Caspian Complex on Dec. 25 for repairs for the first time,” Tasnim News Agency quoted Rayatazad as saying on Dec. 28.
He added that the Islamic Republic intends to undertake 20% of all ship repairs in the Caspian Sea.
The 1,400-ton, 5-meter-high, 108-meter-long and 14.2-meter-wide bulk carrier had suffered damage in the Volga River.
Iran Marine Industrial Company, affiliated with the Islamic Revolution Guards Corps, is building two Aframax tankers for Venezuela, according to Caspian News.
Iran announced in early September that it was helping repair several Russian civilian aircraft.
Russia overtook Iran earlier this year as the most sanctioned country in the world following its invasion of Ukraine. In response to the sanctions, Moscow is expanding its transportation volume through Iran and sees the Caspian Sea as a safe and cheap route for trade with Tehran.
Iran recently bought eight vessels as part of plans to expand trade with Russia through the Volga River starting in the spring of 2023.
Russia is finalizing rules that would give ships from Iran the right of passage along inland waterways on the Volga and Don rivers.
