Date first published: 09/12/2025
Key sectors: all
Key risks: cargo transport; business risks; trade disruptions; war at sea
Risk development
On 30 November Tehran and Ankara reached an agreement to build a US$1.6bln, 200 km rail link – referred to in Iran as the Marand–Cheshmeh Soraya railway transit line – connecting Iran’s rail network with Turkey’s. The project will establish a continuous corridor along the Silk Road from China to Europe, aiming to lower transport costs, facilitate smoother cargo flows and support passenger travel. The rail line is expected to be completed within three to four years.
Why it matters
The Marand–Cheshmeh Soraya railway is strategically important as it seeks to establish a continuous all-rail freight connection linking China’s Belt and Road Initiative (BRI) to European markets, providing China with an alternative, fully land-based route. The development is especially significant given the growing risks along the traditional maritime passage through the Suez Canal, which has faced heightened threats from Huthi attacks on commercial vessels in the Bab al-Mandeb Strait since November 2023.
Regionally, the Marand–Cheshmeh Soraya line could reshape trade dynamics by improving Iran’s role as a transit hub between Central Asia, the Caucasus and the Middle East. The corridor would facilitate faster freight movement, creating new incentives for regional actors to integrate their transport networks with Iran. For Iran, the new rail link supports its broader strategy to bypass decades of international sanctions by expanding overland connectivity with neighbouring states and positioning itself as a key transit corridor along the east–west trade axis. For Turkey, it enhances connectivity and offers strategic alternatives, giving Ankara more flexibility in routing trade, reducing dependency on any single corridor and strengthening its role as a regional transit hub.
Background
Before 2022, the Northern Corridor – the traditional route through Russia – handled more than 86 per cent of transport between Europe and China. However, after Russia launched its full-scale invasion of Ukraine in February 2022, the corridor turned into a financial and political liability, particularly for Western countries seeking to reduce Moscow’s influence over trade routes. As a result, shipping volumes along the Northern Corridor fell by half in 2023 compared to 2022.
Risk outlook
The Marand–Cheshmeh Soraya railway is expected to reduce reliance on maritime shipping by providing faster, more cost-effective transport of cargo with fewer interruptions. Moreover, the route could potentially address some of the current limitations of the increasingly used Middle Corridor, which remains multimodal: goods often must cross the Caspian Sea by ferry, creating logistical complexity compared with a continuous all-rail route. As a result, the safety and reliability of Iran’s rail network will become increasingly critical with the development of the Marand–Cheshmeh Soraya railway.
However, geopolitical tensions – such as a revival of the Iran–Israel conflict or domestic instability – could lead to delays due to regulatory approvals, security concerns or diplomatic disputes. This could further slow progress or restrict access to critical materials and technologies, delaying shipments and increasing logistics costs. From a financial standpoint, the threat of Western secondary sanctions could cause Turkey and other investors to suspend their commitments, endangering the project’s completion. Although sanctions and a difficult investment climate have limited Iran’s role in major Chinese projects in the past, making stronger ties with Turkey is a pragmatic way to secure its place in east–west trade corridor.