Crossroads Asia | Economy | Central Asia

Can Kazakhstan and Iran Sustain Momentum on Transport Corridor Development?

The Iran-U.S. conflict has served to concentrate attention on the transport relationship between Kazakhstan and Iran, in development for years before the war began.

On June 16, 2026, Kazakhstan’s Deputy Prime Minister and Minister of National Economy Serik Zhumangarin and Iran’s Minister of Roads and Urban Development Farzaneh Sadegh met in Astana to discuss expanding transport cooperation. 

The meeting produced specific outcomes: Iran allocated a plot at Shahid Rajaee Port in Bandar Abbas for a Kazakh logistics terminal, and Kazakhstan offered Iran port space, berths, and terminals at its Caspian ports of Aktau and Kuryk. Both sides reaffirmed a joint target of 20 million tonnes per year on the International North-South Transport Corridor (INSTC). 

The meeting took place three and a half months into the Israeli-U.S. military campaign against Iran, with the Strait of Hormuz closed since March, which gave it a different character than a routine bilateral exchange. It also took place before the signing of a memorandum and talks, which may have paved an exit ramp for the United States from the conflict. 

Yet the relationship the Iran-Kazakhstan talks reflected had been developing for years before the war began. Understanding that relationship requires looking at what Kazakhstan built, why it built it, and how a series of overlapping corridor frameworks gradually turned into a transit network connecting it to Iran.

Kazakhstan, the world’s largest landlocked country, inherited from the Soviet Union a railway network that was relatively well developed but poorly balanced: oriented north-south toward Russia, with little east-west connectivity. Post-independence construction, accelerating in the 2000s as the country’s fiscal position stabilized, addressed these gaps. New domestic connections filled the east-west voids; new international lines opened southward to Turkmenistan and Iran and eastward to a second rail crossing with China at Khorgos. Aktau port was modernized and a new port built at Kuryk on the Caspian Sea. A network of overseas logistics terminals – at Lianyungang, Xi’an, Poti, the Moscow region and Alat – extended the country’s reach further. The June 2026 port arrangements with Iran fit into this longer pattern of infrastructure development beyond Kazakhstan’s borders.

The infrastructure Kazakhstan built connects it to Iran through several overlapping international frameworks. Perhaps the most institutionally established is the INSTC, conceived in St. Petersburg in 2000 by Russia, India, and Iran, and joined by Kazakhstan in September 2003. The INSTC has three branches, all of which pass through Iran. The western branch, running through Azerbaijan, carries the largest volumes but is not fully connected by railway – the missing 162-km Rasht-Astara link means most freight crosses the Iran-Azerbaijan border by road. Construction of the missing link was formally agreed between Russia and Iran in mid-February 2026, with a 48-month construction timeline, though its implementation may be affected by the war. The trans-Caspian branch uses Caspian Sea shipping between Russian and Kazakh ports in the north and Iran’s northern ports of Anzali, Amirabad, and Nowshahr in the south. It is constrained by a shortage of vessels and falling sea levels. 

The eastern branch is the smallest by volume but the only route with end-to-end railway connectivity. It runs through Kazakh territory via the KTI railway – agreed between Kazakhstan, Turkmenistan, and Iran in 2007 and inaugurated in December 2014 – from Ozen through Bolashak, the border crossing into Turkmenistan, and onward through Bereket to the Iranian border at Incheh Borun and onward to Gorgan. At Bereket, the KTI line connects with Turkmenistan’s Trans-Caspian Railway, extending the corridor’s reach into Uzbekistan and Tajikistan. To operationalize the route, the four countries’ railways agreed on uniform container-kilometer rates in 2022, and Kazakhstan, Turkmenistan and Russia signed a memorandum in 2023 on establishing a joint logistics operator.

A separate but related framework – the Ashgabat Agreement, signed in 2011 and joined by Kazakhstan in 2015 – established a multimodal corridor linking Central Asia to Iran and the Persian Gulf. Institutionally distinct from the INSTC, it shares the same physical backbone and increasingly overlaps with it in practice. 

Kazakhstan’s role also extends beyond the north-south axis. China currently has direct railway connections only with Kazakhstan in Central Asia, making it the primary rail gateway between China and the region. In October 2015, Kazakhstan, Turkmenistan, and Iran agreed on uniform tariff rates for container trains from China, an early step in recognizing that transit role. In May 2025, senior railway officials from China, Kazakhstan, Uzbekistan, Turkmenistan, Iran, and Turkiye met in Tehran to advance the China-Kazakhstan-Uzbekistan-Turkmenistan-Iran-Turkiye/Europe corridor, approving competitive tariffs and agreed delivery times. A second meeting followed in Beijing in August 2025, and a multilateral agreement was signed in Istanbul in November 2025. In each of these frameworks, Kazakhstan currently serves as the primary rail transit link between China and Iran.

Kazakhstan and Iran have developed a direct trading relationship that has proved sensitive to the wider geopolitical environment. Bilateral trade turnover exceeded $600 million in the mid-2010s, before declining in subsequent years. It stood at $440.1 million in 2021 and $521.4 million in 2022, before falling sharply to $165.2 million in 2023 under intensified sanctions pressure, with wheat supplies decreasing more than eightfold and barley exports halving. The composition of bilateral trade also shifted, with Kazakhstan running a negative trade balance with Iran in 2023 and 2024 before returning to surplus in 2025. Recovery in overall turnover followed: trade reached $340.3 million in 2024 and grew further to $430.2 million in 2025, up 26.4........

© The Diplomat