Conflict around Iran disrupts vital Eurasian trade along North–South Corridor

Cargo transportation along the International North–South Transport Corridor (INSTC) has been largely suspended since February 28 following the escalation of the armed conflict in the Middle East, according to sources from several shipping companies, AzerNEWS reports via Vedomosti.

Industry representatives report that exporters have begun halting shipments due to growing uncertainty and disruptions along routes that pass through Iran.

In particular, companies operating in the forest industry have suspended cargo deliveries via the corridor. Two sources from firms exporting wood materials confirmed that shipments along the North–South route were halted from February 28. One of the sources noted that the company plans to redirect exports toward markets in North Africa and Latin America.

A source in a chemical company said the current security situation in the Middle East has seriously complicated logistics and delivery schedules. Meanwhile, a representative of a trading firm stated that only shipments dispatched before the outbreak of hostilities or during the early stages of the conflict are currently continuing.

The disruption comes after the United States and Israel launched a military operation against Iran on February 28. According to reports, the strikes targeted military, administrative and strategic facilities, as well as port infrastructure.

In response, Iran launched missile and drone attacks on targets in Israel and in Persian Gulf states hosting US military bases. The Islamic Revolutionary Guard Corps (IRGC) also announced the closure of the Strait of Hormuz, a move that has effectively halted much of the shipping activity in the Persian Gulf.

Amid the escalating tensions, Maria Zakharova, spokesperson for the Ministry of Foreign Affairs of Russia, said on March 6 that participants in the sector remain uncertain about how the situation will develop.

Security concerns have also affected transportation through Azerbaijan. After two Iranian drones reportedly crashed near Nakhchivan International Airport on March 5, Azerbaijani authorities temporarily suspended truck crossings at the border with Iran. Transport operations were resumed on March 9.

The 7,200-kilometer North–South transport corridor is designed to connect Russia with seaports in Iran, primarily Bandar Abbas, and onward to the markets of India, the Persian Gulf states, and Southeast Asia.

The corridor consists of three major branches:

• Western route via Azerbaijan
• Trans-Caspian route across the Caspian Sea
• Eastern route via Kazakhstan and Turkmenistan
• All three branches eventually pass through Iranian territory.

Among Russian exporters, the western route through Azerbaijan is the most widely used, particularly for transporting forest products and grain, while the eastern branch typically carries paper, cellulose, construction materials, and food products. Cargo moving through Caspian ports mainly includes oil and vegetable oil shipments.

According to Russian Railways (RZD), rail freight along the corridor totaled 12.9 million tons in 2024, representing a 3 percent increase year-on-year. However, citing RZD data, RBC reported that cargo volumes dropped to 9.9 million tons in 2025, with the route accounting for about 1 percent of the company’s total freight load.

Experts warn that the disruption could have a tangible economic impact on exporters. Dmitry Baranov, a leading expert at Finam Management, said the suspension of the corridor could increase transportation costs for Russian exporters by 20–30 percent, as cargo would need to be redirected along longer alternative routes.

He added that delivery times to India and Iran could rise from roughly 30 days to between 45 and 60 days, reducing the profitability of exports such as grain, metals, and petrochemicals.

Baranov estimates that up to 70 percent of cargo currently transported through the corridor could be redirected to other routes, though at higher logistical costs. The temporary suspension could also lead to losses of about $40–60 million per month, equivalent to 5–10 percent of export revenues linked to the corridor.

Meanwhile, Mikhail Burmistrov, head of Infoline-Analytica, warned that if the Middle East conflict continues, cargo throughput along the North–South corridor could decline by 25 percent or more in 2026.

He stressed that the future trajectory of regional tensions remains unpredictable, making it difficult to accurately estimate the long-term impact on trade flows and cargo volumes along the corridor.