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

As Iran faces the economic fallout from an extended blockade of the Strait of Hormuz, attention is shifting northward.

With Persian Gulf shipping lanes disrupted and oil exports constrained, Tehran may look to reduce its reliance on the Gulf and lean more on railway networks, Caspian ports, and sanctions-era trade networks linked to Russia.

The importance of this relationship was underscored this week as Iranian Foreign Minister Abbas Araghchi traveled to St. Petersburg for talks with Russian President Vladimir Putin, praising Moscow's 'firm and unwavering' support as the two discussed war, sanctions, and the future of the Strait of Hormuz.

But can Moscow truly throw a lifeline to Iran's war-ravaged economy, and does Russia want to? We spoke to experts to find out.

Bilateral trade is rising but remains modest

Economic ties between Iran and Russia deepened after the US withdrew from the 2015 nuclear deal with Iran and other countries in 2018, reimposing comprehensive sanctions on Tehran.

Russia's full-scale invasion of Ukraine in 2022 accelerated that trend as both nations were 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 primarily consists of agricultural products – especially wheat, barley, and corn – along with machinery, metals, timber, fertilizers, and industrial inputs. Tehran also supplies Russia with cheap Shahed drones, which Russia has upgraded and used in the war in Ukraine.

“Trade turnover reached $4.8 billion last year [2024], but we believe the potential for bilateral trade is much greater,” Russian Energy Minister Sergey Tsivilyov told an intergovernmental commission on trade and economic cooperation between Moscow and Tehran in 2025.

Reported bilateral trade rose 16% in that period, mainly driven by Russian exports of grain, metals, machinery, and industrial goods.

However, experts say that despite this increase, overall trade ties remain modest compared with Iran's trade with China or Gulf states.

Trade between the two countries is “insignificant, because they both produce similar products and have similar industries,” Mahdi Ghodsi, an economist at the Vienna Institute for International Economic Studies, told Al Jazeera.

Hormuz alternatives

The backbone of Russian-Iranian trade is the International North-South Transport Corridor (INSTC), a network of sea, rail, and road routes linking Russia to Iran and onward to Asia, bypassing Western-controlled sea lanes.

Goods move from Russia's southern ports, across the Caspian Sea to northern Iranian ports, including Bandar Anzali, before continuing by rail or truck.

This route has become vital for Russian exports of grain, machinery, and industrial goods to Iran.

The route could serve as a “viable but partial lifeline,” Naeem Aslam, chief market analyst at London-based Think Markets, told Al Jazeera, adding that Russia's ports at Astrakhan, on the Volga River delta near the Caspian, and Makhachkala, on the Caspian, are “ready for an uptick in grain, metals, timber, and refined products.”

A western branch also runs through Azerbaijan, though a critical missing railway link between Rasht and Astara in northern Iran remains unfinished.

In 2023, Moscow agreed to help fund this route, with the Russian president calling the deal a “great event” that would “help significantly diversify global traffic flows.”

Easier said than done

Analysts say that while these routes may offer a temporary fix, the Strait of Hormuz provides scale and efficiency that rail and road corridors can hardly replace.

Although maritime trade has been highly volatile in recent weeks, “historically speaking, it is simply the fastest and most cost-effective way to move anything,” Adam Grimshaw, an economic historian at the University of Helsinki, told Al Jazeera.

“About 90% of Iran's international trade is maritime through the Persian Gulf, which cannot be quickly or immediately replaced by land or air routes to bypass the US blockade,” Nader Hashemi, associate professor at Georgetown University, told Al Jazeera.

Ghodsi said Russia could provide a “lifeline” in the short term, as it did with grain exports during Iran's drought, but in the long term it “cannot replace” the massive volume of maritime trade.

Rerouting trade via land routes “takes much longer,” driving up prices for consumers and creating more food waste as perishable goods spoil in transit.

Does Moscow want to help Iran?

Most analysts say throwing Iran an economic lifeline is not in Russia's interest.

“They have their own economic problems,” John Lough, director of foreign policy at the New Eurasian Strategy Center, told Al Jazeera, pointing to signs of stagnation inside Russia, pressure on reserves, and growing discontent over the protracted war in Ukraine.

While Moscow could offer symbolic support or limited humanitarian aid, “now is not a good time” to invest in Iran, he said, citing the US-Israeli war against it.

Replacing maritime trade with land routes would be extremely difficult, despite years of discussion about alternative corridors linking the two countries, he said.

It would also not necessarily help Iran's economy, which needs all the export revenue it can get, experts said.

“Most of Iran's economy revolves around selling oil, and with oil blocked or hindered by the US blockade, Russia really cannot help in that regard,” Hashemi said.

However, others are more optimistic.

“Propping up Iran helps keep global oil prices high, supports Russia's war economy, strengthens INSTC dominance over Asian trade, and maintains a key anti-Western ally – there is no downside for Moscow in a divided Gulf,” Aslam said.