From breaking economic sieges in Latin America and the Middle East to lending its experience defeating sanctions to Russia and China, Tehran is linking the arteries of an alternative world economy. 

Greek authorities on Thursday seized a Russian-flagged oil tanker, the Pegas, on behalf of the United States under the pretence it was transporting Iranian oil. The practice of reflagging is often done either to extend the military protection of larger states to the ships of weaker ones, or to subvert international sanctions.

The fact of the world’s two most heavily sanctioned states pooling resources to defeat their respective economic sieges sends a crucial signal as to the growing coordination of similarly sanctioned countries around the world. 

While Tehran has often been presented in the international media as being protected, diplomatically and technologically by the Russian Federation, the Islamic Republic has a far longer history of enduring economic strangulation. This has given it expertise Russia will now be desperate to tap into as it has found itself financially and technologically severed from the outside world. 

Eurasian gateway to the world?

Far more than offering the cover of its flag for sanctioned energy exports, Iran can provide its northern partner a more secure route via the Caspian Sea and its developing deep-water port of Chabahar on the Gulf of Oman. Such a rerouting would bypass the Turkish Straits and Suez Canal, controlled by NATO or allied states, and would be a far more direct route to what could be a burgeoning Asian market. So far India has been one of the few major economies to increase purchases of Russian oil as have non-state affiliated Chinese refineries. New Delhi likewise has an established interest in Chabahar port providing it a bridge to the landlocked states of Central Asia.

In the weeks after Russia’s Ukraine offensive began, Tehran and the Eurasian Economic Union, of which Russia is the largest member, ratcheted up their economic relations, renewing the customs regime of the Caspian port of Makhachkala. This may be a leading indicator of the coming shift in the region’s commercial traffic.  

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If western sanctions become such that Russia is forced to scale down or end its energy production, a new Caspian route would still be highly beneficial for shipments of grain and other natural produce that Russia has in abundance. Iranian ports may soon be the gateways for Russian agriculture to its markets across the Global South from Somalia to China. 

With time, Iran could become the interface between Russia, the former Soviet sphere, and the outside world, not just facilitating its exports but also transporting them. Due to sweeping insurance sanctions driving away the world’s shipping, Tehran could easily capture Russian trade for its own merchant marine.

As its economic isolation deepens, the Russian Federation will soon become profoundly dependent on advanced technologies that it cannot produce itself. For Iran, the last 40 years of sanctions have led to something of an industrial revolution, with the growth of its scientific output consistently outranking all other countries, including the US, China and Russia.  

Its civilian aviation having been crippled by sanctions; Russian officials have already sought Tehran’s input on keeping civilian aircraft functioning. By providing this assistance, Iran may in future capture the Russian market as a customer for its own aerospace production, from jet-engines to whole aircraft. Iranian automobile manufacturers have apparently also been approached by car producers in Russia suddenly desperate for spare parts. Reports have emerged of Iran potentially bartering such manufactured goods in exchange for raw steel production from Russia. Given time, this trend would see the Islamic Republic become the senior partner in the relationship, selling its more advanced, domestically produced wares in exchange for plentiful raw materials from Russia. The extension of this model to Afghanistan, Syria, Yemen, and beyond would herald an independent pole of development in west Eurasia, entirely separate from the Euro-American capitalist global economy. 

A potential medical superpower

As of April this year, Iranian officials claim to have exported at least four million domestically produced vaccine doses to foreign states. While initially one of the hardest-hit nations by the pandemic, Tehran was also among the few to indigenously develop several highly effective vaccines, while remaining under the US-led campaign of maximum pressure. 

This could become an enormous growth industry for the country as China scrambles to clamp down on the spread of the Omicron variant. Owing to a two-year zero-covid policy and the relative ineffectiveness of Chinese vaccines against the variant, most of its 1.5 billion people have no immunity to the virus at all. As the threat of more than 1.5 million deaths hangs over it, Beijing, like neighbouring North Korea, where covid has also penetrated, is scrambling to find a solution that does not rely on importing vaccines from the west. 

Closer to home, Tehran has immediate access in its own region to countries that remain overwhelmingly unvaccinated. Neighbouring Afghanistan, northern Yemen, and the Syrian Arab Republic would all be enthusiastic customers of Iranian medical expertise. It would be a biting irony if the liberal use of sanctions against these nations has created the perfect conditions for the launch of globally formidable Iranian pharmaceutical industry.

Added to the still scandalously low levels of vaccination in among the poorest states of the world, Tehran has before it a golden opportunity to build a global reputation as a trusted source of high-quality and affordable medical products.  

A resilient model

While the coronavirus is gradually fading into history, the globalized economy will continue to degenerate, beset by new crises such as renewed war in Ukraine. Iran has emerged from the last two years better positioned than most nations to weather the continuing instability. 

The last four decades of economic isolation from the global economy have provided it the basis of an advanced manufacturing and knowledge-based economy that states in the Global South will look to as a viable alternative to the stalled growth and plummeting living standards resulting from decisions made in North America and Europe.