Iran expands trade with Pakistan as experts claim it will ‘ease the squeeze’ of Hormuz blockade

What Happened

Iran and Pakistan reached an agreement to significantly expand cross-border truck trade, with Iranian Interior Minister Eskandar Momeni announcing on Wednesday that the two countries aim to raise bilateral trade from $3 billion to at least $10 billion. The deal calls for increasing daily truck crossings to 2,000—a fivefold rise from the current 20% of that target—and includes opening a new border crossing in the Kuhak region, upgrading the existing Rimdan crossing, and allowing Iranian and Pakistani trucks to operate on each other's territory. Separately, Momeni said agricultural trade alone could reach $5 billion with improved cold storage infrastructure. Counterterrorism analyst Roger Macmillan told The Jerusalem Post that the overland route will 'ease the squeeze' of the U.S. blockade of the Strait of Hormuz but 'without coming close to neutralising it,' because it is a goods corridor, not an oil corridor, and thus does not address Iran's core crude export revenue problem. Macmillan highlighted Washington's silence on the expanded trade, attributing it to Pakistan's role as broker of U.S.-Iran ceasefire talks. Meanwhile, Iraqi Prime Minister Ali Faleh Al-Zaidi confirmed a visit to Tehran on Thursday to discuss economic cooperation and regional issues, with Iran-Iraq trade approaching $12 billion in 2024.

Key Actors

Why It Matters

The Iran-Pakistan truck trade expansion illustrates Tehran's efforts to build alternative supply corridors to bypass maritime choke points and sanctions, though its impact is capped by the inability to move oil overland at scale. Washington's calculated restraint reveals a trade-off: enforcing sanctions versus preserving Pakistan's mediation channel in U.S.-Iran ceasefire dynamics. Concurrently, Iran's deepening economic ties with Iraq underscore a broader strategy of cultivating regional economic interdependence to dilute the effectiveness of Western pressure, while also reinforcing the 'Axis of Resistance' architecture through non-military means.

Watch For

Monitor whether the U.S. issues any sanctions waivers, designations, or objections targeting Pakistani entities involved in the expanded trade. Track the concrete increase in truck crossings and the opening of the Kuhak border point. Follow the outcomes of Iraqi PM Al-Zaidi's Tehran visit, especially any new trade or investment agreements. Observe any shifts in Pakistan's mediation role or U.S.-Iran backchannel talks following this public trade pact.