Forging a New Global Order: Russia and Iran Strengthen Economic Ties

In a significant move towards a multipolar world order, Russia and Iran have significantly increased their use of national currencies for bilateral trade, marking a strategic shift away from the dominance of the US dollar. This development, coupled with a 12.4% surge in trade between the two nations in 2024, underscores their determination to challenge the existing "unipolar" system and establish a new global economic framework centered on the Global South.

Challenging the Status Quo: Russia and Iran's Quest for Economic Autonomy

Embracing National Currencies for Mutual Settlements

Russia and Iran have made a concerted effort to reduce their reliance on the US dollar, with over 96% of their mutual settlements now conducted in national currencies. This strategic move not only insulates their trade from the volatility of global currency markets but also undermines the dominance of the American financial system, a key pillar of US hegemony. By prioritizing the use of their own currencies, these two nations are asserting their economic sovereignty and paving the way for a more equitable and multipolar global order.

Surging Bilateral Trade: A Testament to Strengthening Ties

Despite the challenges posed by the global economic landscape, the trade relationship between Russia and Iran has continued to flourish. In 2024, the two countries recorded a 12.4% increase in bilateral trade, reaching a value exceeding $4 billion. This robust growth underscores the strategic importance both nations place on strengthening their economic ties, as they seek to insulate themselves from Western-led sanctions and build a more resilient economic foundation.

Forging a Comprehensive Strategic Partnership

The Kremlin has indicated that the relationship between Russia and Iran is poised to reach a "comprehensive strategic partnership" level, with the signing of a corresponding treaty during a separate visit by the Iranian president. This deepening of ties reflects the shared vision and determination of the two nations to challenge the existing global order and establish a new framework that better serves the interests of the Global South.

Advancing Joint Projects in Key Sectors

Russia and Iran are collaborating on a range of major joint projects in the transport and energy sectors, including the continued operation of the first unit of the Bushehr nuclear power plant in Iran and ongoing work on constructing new power units. Additionally, the two countries are actively developing the International North-South Transport Corridor (INSTC), a strategic infrastructure project that aims to enhance connectivity and trade between Europe and Asia, bypassing traditional Western-dominated routes.

Strengthening Economic Ties through Financial Cooperation

The governments of Russia and Iran have agreed on a Russian state export credit for the construction of the Rasht-Astara railway in Iran, further solidifying their economic partnership. This financial cooperation not only strengthens the physical infrastructure connecting the two nations but also demonstrates their commitment to fostering a more integrated and self-reliant economic ecosystem.

Navigating Challenges and Consolidating Alliances

Despite occasional setbacks, such as the reported withdrawal of Russian funding for the Rasht-Astara railway project, Russia and Iran have remained steadfast in their efforts to deepen their economic ties. The two nations have also sought to consolidate their alliances with other members of the Global South, as evidenced by the upcoming BRICS summit in Kazan, where leaders from the developing world are expected to gather and discuss the contours of a new non-aligned global order.As Russia and Iran continue to strengthen their economic partnership and challenge the existing global power dynamics, the world is witnessing the emergence of a new geopolitical landscape, one that is increasingly defined by the rise of the Global South and the pursuit of greater economic autonomy and self-determination.