Iran’s railways play a modest role in China-Europe rail freight traffic, serving as an alternative route to operations through Russia and along the Middle Corridor. At the same time, Iran’s railways serve as a key part of the International North-South Transport Corridor. It connects Russia to the Indian Ocean, offering quicker access to some export markets, particularly India.

International rail operations through Iran have already been disrupted due to the ongoing war, but targeted attacks on the rail network could have a more lasting impact. Following the B1 bridge strike, Israel and the United States could target the Ghotour or the Veresk rail bridges. The former links up to Türkiye, the latter is a vital part of the INSTC’s eastern branch.

Closure of Strait of Hormuz is not likely

Iran could decide to close this vital artery as a retaliation to the recent attacks orchestrated by the U.S.. However, the possibility of this happening remains low, as many think it would lead to an economic suicide for Teheran. “Sometimes, the threat is as potent as the actual action”, Kosmala added, saying that the country “will not do anything extreme like what the Houthis originally did shooting at ships crossing Bab al-Mandab”.

The Strait of Hormuz is the world’s most critical oil checkpoint. Around 20% of the oil consumed globally needs to cross it, and it is especially important for Asian countries including China, India, Japan and South Korea. For example, China imports 90% of the Iranian oil meant for exports. The Strait of Hormuz, however, is also very important for other countries in the area (Saudi Arabia, Oman and UAE), which rely on it to export their oil.

Worse consequences for Europe than China

Consequently, fully closing this passage remains an unlikely scenario, Kosmala underlined, as it would create tensions that Iran wants to avoid. “Just like the access to the Suez Canal is available to Chinese ships without worries, similar politics will play out here. Friends will always be spared the risk and the stress”, he commented.

The same cannot be said for Europe and its economy. “That has been already disrupted as European imports of oil and gas keep paying higher insurance premiums and European exports to the Gulf countries have to travel around Africa or in smaller quantities on smaller ships traversing Suez”, Kosmala claimed.

“However, against the background of the Iranian-Israeli escalation we have cancelled the shipment, since the freight will not be able to cross the territory of Iran.” The representative did not provide further details as to why the goods cannot go through the country, be it for risk or insurance reasons, infrastructural limitations or other considerations.

Goods stuck in the port

The shipment would have crossed Kazakhstan and Turkmenistan before entering Iranian territory. It would cover nearly the entire journey through Iran via rail, before switching to trucks in the town of Jolfa for the last leg into Armenia, taking a total of 25 days.

Chinese goods occasionally make their way into Armenia through the Iranian Indian Ocean port at Bandar-Abbas. There too, freight cannot continue on its way to Armenia: roads are closed due to the ongoing conflict. Up to 300 containers destined for Iran’s Caucasus neighbour are therefore stuck in the port. Alternative routes into Armenia go through Dubai or around Africa and through the Mediterranean Sea.

“We have now completed the planning for the bridge between Egypt and Saudi Arabia and are ready to implement it at any time – whether a bridge or a tunnel”, the transport minister in Cairo stated. “But the current solution for connecting Egypt with Saudi Arabia and Jordan is through the Arab Bridge Maritime Co., which currently has 13 vessels that can take cargo between Saudi Arabia, Jordan and Egypt.”

On the way to Europe’s consumers

In other words, ships are still vital in getting goods across the Red Sea, from the Arabian peninsula to Egypt. A tunnel or bridge could change that radically: rail freight could then be sent to Mediterranean ports directly, for example to Alexandria. From there, it could head further into Europe.

Besides Egypt, Israel and Iraq have also been significantly invested in rail for trade between east and west. The numbers run into the billions of dollars, but still involve ships for part of the journey as well, Reuters writes.

Israel revived an idea to connect the Red Sea with the Mediterranean via a high-speed line that could compete with the Suez canal, similar to Egypt’s rail plans. For its part, Iraq could take freight from the Persian Gulf and send it northward into Türkiye via the railways, also providing an alternative route to the Suez canal.