Iran's alternative trade routes amid US naval blockade

The US naval blockade has forced Iran to rely on alternative trade routes through land, rail, and Caspian corridors. Iran shares 6,000 km of land borders with seven countries and has 700 km of Caspian coastline, providing access to corridors through Türkiye, Pakistan, the Caucasus, Central Asia, and Russia. These routes may keep food and consumer goods moving, but cannot replace the trade disrupted by the blockade of the Strait of Hormuz.

Trucking is more expensive, and Caspian ports and vessels are under capacity constraints. The International North-South Transport Corridor (INSTC) offers additional options, but faces bottlenecks such as the unfinished Rasht–Astara railway. China absorbs over 80% of Iran's seaborne oil exports, making it a crucial outlet. However, Chinese imports have dropped from 1.4 million barrels per day in 2025 to 534,000 bpd in August.

Iran's crude storage outside the blockade zone fell from 105 million barrels in July to around 80 million by 21 August. The UAE's embargo on Iran, announced on 19 August, removes another significant lifeline. The UAE was one of Iran's biggest trade partners, providing over 30% of its imports valued at $21 billion in 2024 and nearly 13% of its exports worth $7 billion.

Washington is targeting the networks behind these alternative routes, sanctioning 60 individuals, entities, and vessels across five sectors, warning countries and entities providing economic support to Iran of secondary US sanctions. Iran can still use yuan, local currencies, barter, alternative clearing, overland trade, and shadow shipping, but the viability of these options depends on China and other partners' willingness to withstand US secondary-sanctions pressure.