Central Asia Pivots Trade Routes Amid Mideast Turmoil

A recent 12-day conflict in the Middle East is threatening crucial logistics through the Strait of Hormuz, forcing Kazakhstan and Uzbekistan to urgently reassess their foreign trade strategies and pivot their cargo flows toward alternative directions. In the spotlight are the Trans-Caspian International Transport Route (TMTM), connecting China with Europe via the Caspian Sea and Georgia, and the North-South Transport Corridor. Meanwhile, traditional northern routes through Russia remain operational despite mounting sanctions pressure.

Kazakhstan’s government has voiced significant concern over the logistics for its exports, primarily grain and other food products. Minister of National Economy Serik Zhumangarin highlighted the risks to the country’s only southern land route, which passes through Iran. While current export volumes via Iran are modest, Astana had ambitious plans to significantly increase trade, including an agreement to supply Iran with up to 3 million tons of wheat and barley annually. In response to the crisis, Kazakhstan is exploring alternative routes, including rail and sea transport across the Caspian Sea and utilizing the TMTM framework through Georgia and Chinese ports. Zhumangarin assured that a change in routes would not lead to significant price hikes for its commodity-based exports, as their value is determined on the global market.

In Uzbekistan, the escalating situation prompted President Shavkat Mirziyoyev to convene a meeting dedicated to overhauling foreign trade routes. According to the president’s press service, military actions in the region have jeopardized Uzbekistan’s access to global markets, with preliminary estimates suggesting a potential increase in transport costs of up to 30%. The Uzbek leader has tasked officials with developing a swift response, which includes coordinating alternative corridors with international partners and providing support to export-oriented businesses.

However, some experts believe the immediate logistical impact on Uzbekistan may be overstated. According to Grigory Mikhailov, editor-in-chief of LogiStan.info, fears of dependence on southern routes are largely unfounded, as the bulk of Uzbek trade traditionally flows through well-established and reliable ports in Russia, China, and Kazakhstan. He noted that the Iranian route via the port of Bandar Abbas has been largely experimental, hampered by poor service, payment complications, and underdeveloped infrastructure. “This is more of a political story,” Mikhailov stated, adding that the main development focus remains on the International North-South Transport Corridor (INSTC).

Alexander Karavayev, an expert at the Caspian Institute for Strategic Studies, suggests the situation’s severity will depend on the extent of any damage to Iran’s transport infrastructure. While a direct, long-term disruption of major ports like Bandar Abbas is unlikely, strikes on oil refineries could trigger fuel shortages and cause severe transport system failures. Karavayev also anticipates that Iranian authorities may tighten border controls and inspections in response to security breaches, which could further slow down international traffic. This heightened security posture, he notes, could add a new layer of complexity to cross-border trade.

The unfolding crisis also opens the door to new geopolitical alignments. As Karavayev noted, the conflict could spur the formation of a “coalition of support” to assist Tehran in the event of a transport blockade imposed by opposing nations, leaving the future of regional trade routes in a state of flux.