EurAsian Times

By Ritu Sharma

The CEO of Aprin stated that the dry port is crucial to Iran’s export strategies, which aim to reduce transportation costs for its goods. News reports have labelled these tracks as “steel arteries of independence” that Washington cannot patrol. Moreover, this rail link would soon help Chinese goods travel faster to Europe.

This rail route is the first phase of the China-Europe rail corridor. It would decrease the time required for Chinese exports to reach European countries.

Officials from the national railways of Iran, Kazakhstan, China, Uzbekistan, Turkmenistan, and Turkey held a meeting in Tehran on May 12 to discuss a rail network connecting the six countries to Europe. These countries have agreed to impose competitive tariffs on these rail services, aiming to accelerate regional trade and connectivity.

The other significant advantage of the rail corridor is its higher security compared to the sea route, as the Houthis have turned the Red Sea into a battle zone, driving up shipping costs. Since November 2023, the Yemen-based Houthis have conducted nearly 200 maritime attacks, striking more than 30 merchant ships, including at least 10 oil tankers in the Red Sea, Gulf of Aden, and Indian Ocean.

These attacks target civilian entities, including US commercial ships, and undermine freedom of navigation and global trade, and have decreased Red Sea transit by 70 percent since October 2023, according to the 2025 Worldwide Threat Assessment by the US Defense Intelligence Agency.

Iran sits on the strategically important Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman and, from there, to the Arabian Sea. The strategic partnership between the two countries enables freedom of navigation through the Persian Gulf. This helps China pursue diversification of its energy sources.

China fears that as trade wars with the US intensify, the United States may pressure the UAE and Saudi Arabia to reduce their oil supply to Beijing. For China, Iran is the only country in the Middle East that will not stop selling oil to Beijing if requested by the US. This is in contrast to countries such as Saudi Arabia, the UAE, Jordan, and Kuwait, which are within the US sphere of influence.

This development will have implications on other South Asian countries like India, which has an agreement in place with Iran to invest in Chabahar Port and construct a rail line connecting the southeastern port city of Chabahar to the eastern city of Zahedan. The rail link was designed to connect India to landlocked Afghanistan and Central Asia.

However, India’s growing proximity to the US has put the project on the back burner. However, the work to expand the Chabahar port’s capacity and to connect the port to the Iranian railway network by completing 700 km of tracks to connect Chabahar and Zahedan has picked up pace. Both projects are expected to be complete by mid-2026.

India views the shifting of power balances in the region as, for the first time, China has the opportunity to connect the Chabahar port to Gwadar, a critical hub in the BRI program. This would strengthen China’s ‘string of pearls’ and weaken India’s strategic plans in the region.

If Beijing manages to connect Gwadar with Chabahar port, it will have a ‘golden ring’ – encompassing China, Pakistan, Iran, Russia, and Turkey— in place. The BRI will help China connect to Iran and from there to Central Asia, the Caspian Sea, and the Mediterranean Sea.

China-Iran Rail Route Materialises Despite ‘Maximum Pressure’

The inauguration of the rail route has come at a time when the US is going after the Iran-China nexus by imposing sanctions on China and Iran-based entities and individuals that support Iran’s ballistic missile program.

The US has been systematically targeting the Iran-China trade. On March 20, the US sanctioned Huaying Huizhou Daya Bay Petrochemical Terminal Storage, an oil terminal in China, for buying and storing Iranian crude oil from a sanctioned vessel. This was followed by April 1 sanctions against six entities and two individuals based in Iran, the UAE, and China, who were involved in the procurement of key components on behalf of entities connected to Iran’s UAV and ballistic missile programs.

In its statement, the US State Department said: “Iran remains heavily reliant on China to conduct its malign activities in the Middle East. This is another example of how the CCP and China-based companies provide key economic and technical support to Iran and its proxies, driving regional instability and threatening US partners and allies.”

The US has termed the campaign against Iran as one of “maximum pressure”. Washington is focused on scuttling the progress made by Tehran in its ballistic-missile program and its drone program.

“The United States will use all available means, including sanctions on entities based in third countries, to expose and disrupt Iran’s schemes to procure equipment and items supporting its ballistic missile program, which destabilizes the Middle East and beyond,” the State Department statement said.

Iran is sceptical about striking a deal with the US, and the latter is unlikely to retract its sanctions after rolling them out.

Rail Link or Backdoor Empowering Iran

By relying on overland routes less susceptible to naval interdictions and maritime pressures, Iran can better navigate the restrictions imposed by US sanctions. This enhances its economic sovereignty and diversifies its export channels.

Iran’s trade with China is going to have a significant uptick. Its oil will have a top buyer ready, whereas it will have access to high-end products that have been out of its reach due to the Western sanctions.

China, on the other hand, has been helping Iran escape its US-imposed economic isolation while gaining access to the Middle East and Europe. An economically connected Iran will be less susceptible to diplomatic pressure to curb its nuclear development. This would increase challenges for Israel, one of America’s closest allies.

Ritu Sharma has written on defense and foreign affairs for nearly 17 years. She holds a Master’s degree in Conflict Studies and Peace Management from the University of Erfurt, Germany. Her areas of interest include Asia-Pacific, the South China Sea, and Aviation history.