Can Russia serve as an economic lifeline for Iran amid the Hormuz blockade?

Summary

Can Russia serve as an economic lifeline for Iran amid the Hormuz blockade? Analysts say that Moscow could offer a ‘lifeline’ in troubled times, but logistical issues and costs of new trade routes would offer little long term incentives. Iran FM in Russia says US has offered new round of talks As Iran stares down the economic consequences of a prolonged blockade of the Strait of Hormuz, attention is shifting north. With Gulf shipping lanes disrupted and oil exports constrained, Tehran may seek to depend less on the Gulf and more on a patchwork of railways, Caspian ports and sanctions-era trade networks linking it to Russia. Recommended Storieslist of 4 items - list 1 of 4Iran’s foreign minister in Russia for talks - list 2 of 4NPT summit: Can nuclear pact survive US-Israel war on Iran? - list 3 of 4Iran FM in Russia says US has offered new round of talks - list 4 of 4Iran war: What’s happening on day 60 as diplomacy gathers pace? The importance of that relationship was underscored this week when Iranian Foreign Minister Abbas Araghchi travelled to St Petersburg for talks with Russia’s President Vladimir Putin, praising Moscow’s “firm and unshaken” support as the two sides discussed the war, sanctions and the future of the Strait of Hormuz. But could Moscow really offer a lifeline for Iran’s beleaguered, war-torn economy, and would it even want to? We spoke to experts to find out. Increasing but modest bilateral trade Economic relations between Iran and Russia deepened after the US withdrew from a 2015 nuclear deal with Iran and other nations in 2018 and reimposed sweeping sanctions on Tehran. Russia’s full-scale invasion of Ukraine in 2022 served to accelerate that trend as both countries found themselves increasingly cut off from the Western financial system. They turned to sanctions-evasion networks, alternative payment systems and non-Western trade corridors to keep goods, energy and money flowing. Current trade is dominated by agricultural products – especially wheat, barley and corn – alongside machinery, metals, timber, fertilisers and industrial inputs. Tehran has also supplied Russia with low-cost Shahed drones, which Russia updated and has been using in its war on Ukraine. “Trade turnover reached $4.8bn last year [2024], but we believe that the potential for our mutual trade is much greater,” Russian Energy Minister Sergey Tsivilyov told an intergovernmental commission on trade and economic cooperation between Moscow and Tehran in 2025. Bilateral trade is reported to have increased by 16 percent during that period, driven largely by Russian exports of grain, metals, machinery and industrial goods. But experts say that despite this increase, the overall trade relationship remains relatively modest compared with Iran’s trade with China or the Gulf countries. Trade between the two is “not substantial, because both countries are producing almost similar products and the industries are similar”, Mahdi Ghodsi, an economist at the Vienna Institute for International Economic Studies, told Al Jazeera. Alternatives to Hormuz The backbone of Russia-Iran trade is the International North-South Transport Corridor (INSTC), a network of shipping lanes, railways, and roads linking Russia to Iran and onward to Asia, bypassing Western-controlled maritime routes. Goods move from southern Russian ports, across the Caspian Sea to northern Iranian ports, including Bandar Anzali, before continuing by rail or truck. The route has become increasingly important for Russian grain, machinery and industrial exports to Iran. This route can serve as a “viable but partial lifeline”, Naeem Aslam, chief market analyst at London-based Think Markets, told Al Jazeera, adding that Russian ports in Astrakhan, on the Volga River delta near the Caspian Sea, and Makhachkala, on the Caspian Sea, are already “primed for a surge in grain, metals, timber and refined products”. A western branch also runs through Azerbaijan, though a key missing rail link between Rasht and Astara in northern Iran remains unfinished. In 2023, Moscow agreed to help finance the line, with Russia’s president calling the agreement a “great event” that “will help to significantly diversify global traffic flows”. Easier in theory than in practice Analysts say that, although these routes may provide a temporary solution, the Strait of Hormuz offers a scale and efficiency that rail and land corridors cannot easily replicate. Although maritime trade has been highly volatile in recent weeks, “from a historical perspective it is simply the quickest and the most cost-effective way of transporting anything”, Adam Grimshaw, an economic historian at the University of Helsinki, told Al Jazeera. “Roughly 90 percent of Iran’s international trade is maritime trade that goes through the Gulf, which can’t be quickly or immediately replaced through land access to Iran or through air transport to circumvent the American blockade”, Nader Hashemi, an associate professor at Georgetown University, told Al Jazeera. Ghodsi said Russia might be able to offer a “lifeline” in the short term, as it did when it exported grain during Iran’s droughts, but in the long run, it simply “cannot substitute” the vast amounts of maritime trade. Re-routing trade routes via land “takes time”, pushing up prices for consumers and creating more food waste as perishables rot en route. Does Moscow want to help Iran? Most analysts say throwing an economic lifeline to Iran is not in Russia’s interests. “They’ve got their own economic problems,” John Lough, head of foreign policy at the New Eurasian Strategies Centre, told Al Jazeera, pointing to signs of stagnation inside Russia, pressure on reserves and growing frustration over the prolonged war in Ukraine. While Moscow could offer symbolic support or limited humanitarian assistance, “now is not a good time” to invest in Iran, he said, referring to the US-Israel war on the country. Replacing maritime trade with overland routes would be extremely difficult, despite years of discussion about alternative corridors linking the two nations, he said. It also won’t necessarily help Iran’s economy, which needs all the export revenue it can get, experts say. “Much of Iran’s economy revolves around the sale of oil, and with that blocked or prevented by the American blockade, Russia really can’t help in that regard”, Hashemi said. Others are more optimistic, however. “Propping [up] Iran locks in higher global oil prices that buoy Russia’s war economy, cements INSTC dominance for Asian trade, and keeps a key anti-Western ally alive – no downside for Moscow in a fragmented Gulf,” Aslaam said.

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US-Iran Peace Deal Live: Iranian President to visit Pakistan on Tuesday as peace talks yield 60-day roadmap

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Advertisement US-Iran peace deal US-Iran Peace Deal Live: Iranian President to visit Pakistan on Tuesday as peace talks yield 60-day roadmap New Delhi,UPDATED: Jun 22, 2026 19:20 IST US-Iran Peace Deal News Live Updates: US-Iran diplomacy gained momentum after a marathon round of talks in Switzerland produced what mediators Pakistan and Qatar described as a roadmap for a final agreement within 60 days.

US Vice President JD Vance said Tehran had agreed to allow nuclear inspectors into the country and work on mechanisms covering frozen Iranian assets, regional ceasefires and the Strait of Hormuz. Vance said discussions on nuclear inspections could begin as early as this week, while technical teams will remain engaged even after Iran's top negotiators returned to Tehran following 18 hours of intensive negotiations.

The talks also established a communication channel to help ensure safe commercial shipping through Strait of Hormuz and a mechanism aimed at preventing renewed fighting in Lebanon between Israel and Hezbollah. Despite the diplomatic progress, tensions remained visible.

Iran had briefly closed the Strait of Hormuz over the weekend, accusing the United States of failing to uphold commitments to halt fighting in Lebanon. However, mediators said discussions were held in a constructive atmosphere and yielded encouraging progress.

Iranian President Masoud Pezeshkian is set to visit Pakistan on Tuesday in a trip expected to focus on bilateral cooperation and follow-up discussions on Islamabad's mediation efforts. Meanwhile, a fragile ceasefire in Lebanon largely held, marking the longest lull in violence in three months of conflict.

Lebanese officials reported near-total adherence to the truce despite isolated incidents, while Israeli leaders insisted any final agreement must ensure Iran cannot use future financial relief to support military activities or regional proxy groups.

Follow IndiaToday.in for the latest updates....Read More Iranian President Masoud Pezeshkian is expected to arrive in Pakistan on a one-day visit on Tuesday. (File Photo: Press TV) 2 Jun 22, 2026 19:20 IST US-Iran Deal: Iranian President to visit Pakistan Iranian President Masoud Pezeshkian will make a one-day visit to Pakistan on Tuesday, Iranian officials said.

Habib Abbasi, director-general of public relations at the presidential office, said the trip will focus on implementing previous agreements and exploring new trade opportunities. Pezeshkian is also expected to "express appreciation" for Pakistan's role in mediating between Iran and the United States, according to Tasnim news agency.

Jun 22, 2026 19:14 IST US-Iran Deal: Here's what happened so far - US Vice President JD Vance said talks with Iran made significant progress, with Tehran agreeing to allow nuclear inspectors, establish mechanisms for handling frozen assets and support efforts to manage regional ceasefires.

- Speaking after negotiations in Switzerland, Vance said discussions on nuclear inspections could begin as early as this week and confirmed that technical talks would continue in the coming days and weeks. - Iran’s senior negotiating team departed Switzerland for Tehran after 18 hours of intensive discussions, while technical experts remained behind to continue work on the Islamabad memorandum of understanding.

- Pakistan and Qatar, which mediated the talks, said Washington and Tehran agreed on a roadmap aimed at reaching a final agreement within 60 days and described the first round of negotiations as encouraging. - The two sides also agreed to establish a mechanism to help prevent clashes in Lebanon and create a communications channel to safeguard commercial shipping through the Strait of Hormuz, a vital route for global oil supplies.

- The talks followed an interim agreement reached last week and continued despite renewed tensions after President Donald Trump threatened military action against Iran and Tehran warned Washington over its rhetoric. - Iranian President Masoud Pezeshkian is scheduled to visit Pakistan on Tuesday for a one-day trip.

Iranian officials said he would discuss bilateral cooperation and express appreciation for Islamabad’s role in facilitating US-Iran diplomacy. - A ceasefire in Lebanon largely held on Monday, marking the longest period of relative calm in nearly three months of conflict between Hezbollah and Israel, although isolated incidents were still reported.

- Lebanese security officials said adherence to the ceasefire had been "almost total" since Saturday evening, despite reports of limited Israeli military activity in southern Lebanon and drone flights over Beirut. - The conflict in Lebanon has remained a major test for the interim US-Iran agreement, with Tehran previously accusing Washington of failing to ensure an end to hostilities and briefly reimposing restrictions in the Strait of Hormuz.

- Vance said progress had also been made toward reducing tensions in Lebanon, while negotiators worked to establish safeguards aimed at preventing future escalation. - Iranian Foreign Minister Abbas Araqchi said Tehran had secured waivers for oil and petrochemical exports, the release of some frozen assets and the launch of a reconstruction and development programme under the broader diplomatic framework.

- Oil prices, which surged after tensions disrupted shipping through the Strait of Hormuz, fell further after the latest round of talks, easing concerns about global supply disruptions. - Pakistani Prime Minister Shehbaz Sharif described the negotiations as constructive and said the first round of talks had concluded successfully, laying the groundwork for a broader peace agreement.

- Israeli officials signalled support for a diplomatic resolution but stressed that any final deal must ensure Iran cannot use financial relief or released assets to fund military activities or regional proxy groups.

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