Iran and Russia are working to launch a transcontinental trade route in defiance of sanctions

Russia and Iran are working on building a new intercontinental trade route with investments of more than $20 billion that will stretch from the eastern edge of Europe to the Indian Ocean, 3,000 kilometers long, beyond the reach of any foreign interference.

Russia and Iran have begun the construction of a new intercontinental trade route with investments of more than $20 billion, extending from the eastern edge of Europe to the Indian Ocean for a length of 3,000 km, beyond the reach of any foreign interference.

This project comes to speed up the delivery of cargo along the rivers and railways linked to the Caspian Sea, thus increasing the volume of foreign trade.

According to the report, published by the US Bloomberg Agency on Wednesday, ship-tracking data shows dozens of Russian and Iranian ships - including some under sanctions - that are already on the route.

The economic agency indicated that what is currently taking place is an example of competition between the superpowers to quickly reshape trade networks in a global economy that seems poised to split into competing blocs.

Russia and Iran, under enormous pressure from Western sanctions, are heading towards each other, and towards the East as well, with the aim of protecting trade ties from Western interference, and building new ties with the rapidly growing giant economies in Asia.

Economic reasons

In addition to any arms trade between Russia and Iran, there are compelling economic reasons for the new transit route. Ships navigating the Don and Volga rivers have traditionally traded in energy and agricultural commodities. Iran is the third largest importer of Russian grain, but the scope is now set to expand.

The two countries announced a slew of new business deals covering goods including turbines, polymers, medical supplies and auto parts. Russia also provides nuclear fuel and components for Iran's reactor at Bushehr.

Russia needs to compensate for the sudden collapse of its trade relations with Europe, which before the war was its largest trading partner, as well as find solutions to US and European sanctions.

There are many obstacles, but Russia and Iran are spending huge amounts of money to overcome them. Russia plans to invest a billion dollars to improve the ability to navigate through the Azov and Don rivers and through the canal linked to the Volga River.

Hundreds of ships sail daily through the corridor connecting the Black and Caspian Seas, according to Bloomberg data, with routine traffic jams piling up around its narrowest points.

Ships over 100 meters in length navigate some 32 kilometers inland from the Sea of ​​Azov to the Russian city of Rostov-on-Don, where satellite images show vessels routinely lining up for passage into the Volga.

The Don Volga Canal is a 101-kilometre stretch of man-made gorges and natural reservoirs linking the two rivers at their closest point, but ice often prevents traffic during the winter months.

The shallowness of some parts of the waterway restricts the size of ships with a capacity of about 3,000 tons, but ongoing development aims to allow ships twice that size to pass through the canal.

According to Iran's Maritime News Agency, Russia is finalizing rules that would give Iranian ships the right of passage along the inland waterways of the Volga and Don rivers.

Ship traffic data compiled by Bloomberg already shows at least a dozen Iranian ships, some operated by the US-sanctioned Iranian government shipping lines consortium, plying the waters between the country's Caspian coast and the main Volga River ports.

Iran's semi-official Labor News Agency reported last month that the Tehran-based company, IRISL, had invested $10 million in a port along the Volga River, to double the cargo capacity of the Solyanka port in the Russian city of Astrakhan to 85,000 tons per month.