How long can Iran hold out? The standoff in the American-Israeli war against the country has been going on for a month and a half. The firing has stopped, but Iran is still blocking the Strait of Hormuz and the Americans are in turn preventing Iran from exporting oil.
The Americans hope that this status quo will ultimately work to Iran’s disadvantage. That country, President Donald Trump recently wrote on his social medium Truth Social, had better agree to American demands quickly, “otherwise there will be nothing left of them.” The thought is that due to Western sanctions and the prevention of exports, Iran would no longer be able to earn any money from oil. After about three or four months, the money simply runs out.
But due to its geographic location, Iran has plenty of alternatives to the Strait of Hormuz. It helps that the country is connected to global powers China, Russia and India and regional powers Pakistan and Turkey, none of which fully adhere to the Western sanctions regime.
Negotiating tolls
All alternative routes together do not provide Iran with the same trade volume as by sea, but they do allow the country to make money. In addition, Iran charges a toll in the Strait of Hormuz. Oil tankers in particular – which transport oil from Gulf states via this strait to the rest of the world – have to pay: roughly 1 dollar (86 euro cents) per barrel. For large oil tankers this quickly amounts to 1.7 million euros per ship. Iran would have to collect tolls from about eighty ships every day to compensate for pre-war oil revenues.
But Iran is not that dependent on oil. The country has been trying for years to become less dependent on oil exports, precisely because those incomes are so volatile due to sanctions and wars. The oil revenues, writes the think tank Emirates Policy Centermake up 4.4 percent of Iran’s budget – less than ever.
Analyst Michel Don Michaloliákos of The Hague Institute for GeopoliticsNu nevertheless thinks that the Americans are basically right: Iran cannot withstand the American counter-blockade for months to come. The alternative routes, he says, mainly enable the country to import foodstuffs. “But Iran is very dependent on the Strait of Hormuz for the export of oil and gas. A train can only fit thousands of barrels, not the millions that the Iranians exported daily before the counter-blockade.”
The Gulf will not last indefinitely either
On the other hand, the administration expert says, the US and its allies in the Gulf cannot hold out indefinitely. “For the Gulf, the foundations of the economy are at stake: oil exports, tourism and the financial sector.” Countries such as Kuwait, Bahrain and Qatar are largely dependent on the Strait of Hormuz and do not yet have an agreement with Iran on transit.
On the other hand, these countries are also creating new routes: overland, through the Saudi desert, to the Red Sea. The Wall Street Journal writes about a “mechanized revival” of old caravan routes, via highways, railways and ports. With 3,500 trucks driving between the two seas, for example, the worst fertilizer shortages can be alleviated.
The Emirates have a port beyond the Strait of Hormuz: Khor Fakkan. There too, activity has increased enormously, from one hundred to seven thousand trucks per day and from two thousand to fifty thousand containers per week. The port has hired about nine hundred extra people in two weeks – “as if you had to bring together an entire orchestra in one night to play a Mozart symphony,” the port boss said in the American newspaper.
In the US itself, citizens are feeling the pain at the pump: according to new research from Brown University, the Americans have already suffered during this war 34.5 billion euros extra in fuel paid. With a view to the Congressional elections in the autumn, Trump is particularly keen to conclude an agreement with Iran.
An unpredictable factor is Israel’s position. American media reported that Trump and Israeli Prime Minister Netanyahu had a heated telephone conversation on Thursday evening. While Trump wants to continue diplomatic negotiations with Iran, Netanyahu wants to launch new attacks on the country.
Iran and the US can always try to negotiate. But the positions of the Americans and the Iranians are still too far apart. That’s why it will be a staring competition in the coming months: who will blink first?
What are the alternative transport routes, and how long can Iran keep it up?
Alternative route 1Pakistan
Neighboring country Pakistan, which is also a mediator between Iran and the United States, has opened six border crossings with Iran. It does this mainly out of self-interest: thousands of containers stuck in the port of Karachi can still reach their destination in Iran by land.
Iran also hopes to do business with the Pakistanis by sea. This concerns a trade route between the southern Iranian port city of Chabahar and the Pakistani port of Gwadar. Both ports are located on the Gulf of Oman – beyond the Strait of Hormuz.
Iran has built a new railway line between Chabahar and Zahedan, a city near the border triangle with Pakistan and Afghanistan. In theory this route is one bypass for the Strait of Hormuz. But due to the American counter-blockade, there are few ships that can sail to and from Chabahar. The Iranians hope that ships to and from Pakistan, sailing close to the coast, can escape the American blockade.
Alternative route 2Central Asia and China
In May last year, the freight railway line was opened between Tehran and Xi’an in central China – traditionally the terminus of the Silk Road. The thousands of kilometers of railway line between the two countries runs through Turkmenistan, Uzbekistan and Kazakhstan. Although the trains can transport far fewer containers than seagoing ships, the transport is considerably faster: fifteen days, compared to the usual thirty to forty days by sea. After the American-Israeli attack on Iran, the frequency has been increased: there is now not just one train per week, but three or four.
Many goods from Central Asia and China also arrive by road via Sarakhs, the main border crossing between Iran and Turkmenistan.
Alternative route 3Caspian Sea
The Caspian Sea is not a sea but a lake, and the largest lake in the world. For Iran, this salt lake is a solution: Russia is on the other side, and the Americans cannot reach it with their navy. There is a trade route between the Iranian port of Amirabad and the Turkmen port of Türkmenbasy, from where goods are transported to Uzbekistan. From Bandar e-Anzali, Iran trades with the Russian ports of Astrakhan and Makhachkala. And goods from Central and East Asia find their way to Iran via the Kazakh port of Aktau.
Alternative route 4Azerbaijan and Turkey
In the northwest, Iran also hopes to trade through neighboring countries Azerbaijan and Turkey. But Iran still faces problems with both countries.
For trade with Azerbaijan, a crucial stretch of track between Rasht and the border town of Astara is missing. Without this track, goods will find it more difficult to find their way to Azerbaijan and further on to Russia.
There is a freight rail line between Iran and Turkey, but it does not function properly. Last year, both countries signed an agreement worth 1.4 billion euros to build a fast train connection.