As of: March 15, 2024, 7:14 a.m
By: Lars-Eric Nievelstein
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A new project aims to make Putin's sanctions evasion tactics even more severe.
The Persian Gulf plays a special role in this.
Moscow – Regardless of whether it is diamonds, LNG or oil, Russia has always found ways to get its goods to Europe or the USA, despite heavy Western sanctions.
This was able to work primarily because of the cooperation with countries like India and China.
Russia is currently looking for new trading partners - and is sending billions of dollars to Iran.
Russian Railways to compete with Suez Canal
While the West continues to decline as a trading partner for Russia, Russia is building new trade routes.
The Kremlin is focusing primarily on China, India and the countries on the Persian Gulf.
A new railway line is now to connect Russia and the Iranian ports in the Gulf.
The project costs the equivalent of $1.6 billion and construction is scheduled to begin in 2024.
Russia had granted Iran a loan of around $1.4 billion so that the project could be financed.
Vladimir Putin in his office in Novo-Ogaryovo.
For months, Russia has managed to circumvent the sanctions imposed by the West.
A new project aims to make this tactic even tougher.
© IMAGO / ITAR-TASS
The big goal behind it: Russia wants to have easier access to cities like Mumbai, India's trade center.
“Because traditional Russian trade routes are blocked, other options are needed,” the
New York Times
quoted transport and logistics expert Rauf Agamirzayev as saying.
The Russian side said that this new train connection should even be able to compete with the Suez Canal in terms of the volume of trade transported.
There are also further new rail connections between China and Russia and between Turkey and Russia.
Russia is also investing billions here to expand trade routes and renew existing ones.
Asia is Russia's way out of the sanctions trap
Despite all the sanctions, Europe still acts as a Russian trading partner, although not to the same extent as before.
In 2023, European countries took almost 20 percent of their LNG purchases from Russia.
Gas imports, on the other hand, fell significantly.
Russia had therefore increasingly turned towards China, India and Iran to strengthen trade ties.
Russia has been purchasing large numbers of Shahed drones from Iran since 2022.
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It is certainly no secret to Vladimir Putin that Western sanctions will develop into a major problem for Russia, especially after the end of the war.
"Currently, developing relations with the global south is Russia's top priority," David Szakonyi, a political science professor at George Washington University, told
Business Insider
.
The new railway lines are intended to reinforce this development.
These relationships are necessary to prevent a collapse of the Russian economy.
According to Szakonyi, Russia is looking at “all countries that are not sanctioned.”
He assumes that Russia will make greater efforts in diplomacy in the coming years.
Russia's trading partners are distancing themselves because of sanctions
The Russian economy is currently showing itself to be resilient - despite the sanctions, the country was able to achieve slight growth in 2023.
Even if the figures presented from Russia should be treated with caution, many Western experts also assumed greater resilience than expected.
At the same time, Western products can often be found in Russian trade.
However, the effects of the sanctions on Russia's trading partners are becoming increasingly clear.
Several major Chinese banks have already stopped trading with Russia.
India expressed concern about new sanctions and said it would again buy Middle Eastern oil instead of Russian oil.
And in Europe, member states are considering new sanctions, such as confiscating frozen Russian assets.