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Iran and Russia to Build “Sanction-Proof” Shipping Fleet of 20 Ships
Agreement between Iran and Russia to build and acquire 20 ships
Dr.G.R.Balakrishnan 23-05-2023 Shipping News (Ship Building & Ship Yards)

Iran and Russia to Build “Sanction-Proof” Shipping Fleet of 20 Ships

Russia and Iran have agreed to collaborate on building commercial ships On May 19, 2023. Despite sanctions, the Islamic Republic has extensive experience maintaining and expanding its industrial capacity. Additionally, Russia intends to increase its resilience to sanctions by developing alternative transportation corridors. However, there are hazards associated with ships running aground in the Volga-Caspian Sea shipping channel when travelling along the “North-South” transport route.

Iranian media report that the Islamic Republic’s shipping firm and a Russian group led by a representative of the country’s president have inked an agreement to build and acquire 20 ships. The parties have agreed to form a joint venture to better coordinate cargo movement along the north-south and east-west transit corridors to and from all Russian ports. As a result of the pact, both sides will pool their transportation and shipbuilding resources to guarantee a steady flow of cargo to the ports.

After sanctions made Western ports inaccessible to Russian vessels, Russia and Iran’s cooperation acquired momentum. During high-level negotiations in Tehran in July 2022, a fundamental decision was reached regarding Russia and Iran’s joint activity. Putin commended Iranian President EbrahimRaisi and Supreme Leader Ali Khamenei for their continued focus on cooperation with Russia.

Iran and Russia have maintained substantial shipbuilding capacities. The dry cargo ship “Nikolay Orlov” was launched and tested in Russia in March. It was constructed at the shipyard KrasnoyeSormovo in Nizhny Novgorod. Its initial commercial voyage consisted of transporting metal to Iran. According to experts from the United Nations Conference on Trade and Development (UNCTAD), the potential of the trading fleet in the Islamic Republic decreased by nearly a factor of nine (and by a factor of 50 for vessels) in just five years following the first wave of sanctions from 2005 to 2010. Iran initially purchased used ships from China and Malaysia; however, as of 2019, a state shipbuilding programme is in place to construct up to 200 ships of various varieties. The programme is estimated to cost 300 million euros.