(Photo Credit: Jean-Marc Frybourg/financialtribune.com)
Earlier this year, Russia launched for the first time fuel-by-rail exports to Iran after its main purchasers stopped importing Russian fuel due to western sanctions imposed on the Kremlin following the start of the war in Ukraine, according to three industry sources that spoke with Reuters.
Russia delivered 30,000 tons of diesel and gasoline to Iran in February and March, the sources said.
Last year, Russian Deputy Prime Minister Alexander Novak announced that the two nations had clinched a massive energy deal worth $40 billion and agreed to swap oil and natural gas supplies.
“We expect fuel supplies to Iran to rise this year, but we already see several issues with logistics due to rail congestion. That may keep exports from booming,” one of the sources reportedly told Reuters.
The fuel cargoes were shipped from Russia through Kazakhstan and Turkmenistan by rail. Some of the shipments of gasoline were then sent by truck from Iran to neighboring countries, including Iraq.
Before the start of the Ukraine war, Russia exported small volumes of fuels to the Islamic Republic via the Caspian Sea. However, after the west sanctioned seaborne diesel and gasoline cargoes, Moscow had to look for alternative ways to expand deliveries to Tehran.
While Iran is an oil-producing country with large deposits and its own refineries, over recent months, demand has surpassed domestic fuel production, according to a trader in Central Asian oil products that spoke with Reuters.
The main overland route for cargo sent from Russia to Iran passes through Azerbaijan as part of the International North-South Transport Corridor (INSTC), a 7,200-kilometer-long transit system that connects ship, rail, and road routes for moving cargo between India, Iran, Azerbaijan, Central Asia, Russia, and the rest of Europe.
Last July, a Russian company completed the first transport of goods via container trains from Russia to India through the eastern branch of the INSTC.
Russia and Iran have deepened their economic and defense cooperation due to growing economic pressure from the west and the war in Ukraine.