Iranian Oil Reaches China by Rail: A Temporary Fix or a Long-term Solution?

US pressure is forcing Iran to seek alternative trade routes. China is helping Tehran by importing Iranian oil via rail while also playing a key role in preventing a sharper rise in global oil prices amid the geopolitical crisis.

Vessels have finally resumed transiting the Strait of Hormuz after a prolonged disruption, The New York Times reported on June 30. However, last weekend's exchange of attacks between the United States and Iran continues to affect one of the world's most strategically important shipping routes.

US-Iran Conflict Puts Oil Transport Under Pressure

The conflict between the United States and Iran escalated significantly on February 28, when US-Israeli strikes disrupted shipping through the Strait of Hormuz, severely affecting global oil and gas transportation, Gulf Business stated. Although the two countries later agreed to a ceasefire, officially announced during the G7 Summit 2026 in Évian, France, tensions remain high.

Reuters wrote that the agreement was reached by the leaders of both countries. However, during a press conference, US President Donald Trump warned: "We're going to bomb the hell out of them if they violate the agreement." Recent developments suggest the durability of the ceasefire is already being put to the test.

China Is Saving Iran?

As maritime transport became increasingly vulnerable, Iran and its trading partners began searching for alternative routes. China, Iran's closest economic partner and the largest importer of Iranian oil, has increased its reliance on rail freight in an effort to secure more stable energy supplies regardless of how the conflict develops.

Rail transport remains one of the most reliable alternatives during armed conflicts despite its own operational challenges. Bloomberg reports that Iran continues to expand its rail trade with China, as freight trains have largely avoided the disruptions affecting maritime shipping in the Strait of Hormuz.

Although freight costs have risen significantly in recent weeks, this alone is unlikely to undermine the long-term viability of rail transport. Nevertheless, the 10,400-kilometre railway corridor connecting Iran and China via Kazakhstan, Uzbekistan, and Turkmenistan cannot fully meet Tehran's import and export needs because of its limited capacity.

The Diplomat noted in a report published on May 28 that Iran still cannot transport as much oil by rail as it produces each day. Nevertheless, rail offers a significant advantage in terms of speed, with freight reaching its destination in roughly half the time required for maritime shipping. This suggests that Tehran is likely to view rail transport as a temporary solution—or, at the very least, as one component of a broader logistics strategy rather than a complete replacement for maritime trade.

Russia Is Also Strengthening the Railway Network

Russia has also contributed to the development of railway links connecting China, Iran, and other Central Asian countries. Russian news agency Interfax  in November 2025 reported that the first freight train using a new route bypassing the traditional Central Asian corridor departed from Russia for Iran.

These railway projects are widely regarded as mutually beneficial for Russia, China, and Iran. Despite multiple rounds of EU sanctions, the three countries have continued to strengthen their economic ties through transport infrastructure and alternative trade corridors. In this sense, sanctions may delay or complicate such initiatives, but they have not prevented Russia from remaining an important player in regional trade.

Iran's Railway Network Is Moving Closer to Europe – with China's Support

China and Iran are also advancing another major infrastructure project: the electrification of the railway connecting the Iranian cities of Sarakhs and Razi. Because Razi is located near the Turkish border, the route could further strengthen alternative transport corridors linking Asia and Europe.

China's changing import strategy is also influencing global energy markets. As the world's largest oil importer, the country plays a decisive role in shaping global oil prices.

The New York Times argues that China's recent reduction in oil imports has helped prevent prices from rising even further despite the ongoing conflict. "The reduction in Chinese oil imports is one of the most important reasons oil prices are not going through the roof right now," Jason Bordoff of Columbia University told the newspaper.

_{Sources: The New York Times, Gulf Business, Reuters,  Bloomberg, The Diplomat, Interfax,  The New York Times.}