Experts assess how war in Iran could affect Uzbekistan’s economy

Escalating tensions in the Middle East and the outbreak of armed clashes involving Iran have raised concerns about possible economic consequences for Uzbekistan. In an interview at the Kun.uz studio, experts discussed how disruptions in southern transit routes and global markets could affect the country’s trade, logistics, and prices.

Strategic role of Iran in Uzbekistan’s transit routes

Nargiza Umarova, head of the Center for Strategic Linkages at the Institute for Advanced International Studies, said Iran, Pakistan, and Afghanistan play a crucial role in the southern transit corridor that connects Uzbekistan with global markets.

According to her, Iran has traditionally been considered a stable and reliable transit state for Central Asia. In recent years, Uzbekistan has intensified cooperation with Tehran, particularly in transport and logistics.

Umarova noted that Uzbekistan has also been promoting the Trans-Afghan transport corridor project since 2018. The initiative involves Uzbekistan, Afghanistan, and Pakistan and is designed to create a new route linking Central Asia with South Asian ports.

Trade ties with Afghanistan have grown significantly – by the end of 2025, the country entered the top ten of Uzbekistan’s trading partners with a total turnover of $1.7 billion. Iran and Pakistan are also among Uzbekistan’s top twenty partners.

Iran’s geographical position plays a major role in regional transit. The country borders 15 states and historically served as a key link between East and West trade routes, including during the era of the Silk Road.

Importance of Iranian ports

Iran’s ports remain vital for Uzbekistan’s foreign trade and logistics diversification strategy.

Umarova highlighted the strategic significance of ports such as Bandar Abbas, which handles around 90 percent of cargo transported through Iran, including hydrocarbons and oil products.

Iran also has direct access to the Indian Ocean, making it an important gateway for landlocked Central Asian countries. Another major project is the development of the Chabahar port with support from India. Chabahar is considered a deep-water ocean port that does not require ships to pass through the Strait of Hormuz.

According to Umarova, Uzbekistan transported about 1.2 million tons of cargo through Iran last year, much of it in transit. For example, Turkey – one of Uzbekistan’s top five trading partners with more than $3 billion in trade – is largely reached via Iranian transit routes.

Limited direct trade, but major transit importance

Umrbek Yusupov, an expert at the Center for Progressive Reforms, said Iran’s direct share in Uzbekistan’s trade remains relatively small.

Uzbekistan’s total foreign trade turnover reached $81.2 billion, including $34 billion in exports and more than $47 billion in imports. Trade with Iran accounts for around $500 million, which is less than 1 percent of the total.

Uzbekistan exports about $157.4 million worth of goods to Iran. Key export items include textiles and cotton fiber. Approximately 30 percent of Uzbekistan’s cotton exports pass through Iranian routes, while raw silk accounts for about 3 percent.

Imports from Iran mainly consist of ferrous metal products, household goods made from petroleum products, agricultural goods, construction materials, fertilizers, and animal feed.

Disruptions in transit routes

Experts warned that ongoing conflicts in the region may disrupt key transport corridors.

Since March 1, reports have indicated that the Strait of Hormuz has been closed, preventing vessels from entering the port of Bandar Abbas. In addition, the conflict between Pakistan and Afghanistan has affected routes through Pakistan.

These disruptions force logistics companies to consider either higher risks and costs or alternative routes.

The Uzbek government had already instructed the Ministry of Transport to explore alternative transport corridors. Earlier estimates suggested that replacing Iranian ports could increase logistics costs by up to 30 percent.

Among the proposed alternatives are routes through China via Kyrgyzstan, as well as northern corridors through Russia. However, these options are longer and more expensive.

Uzbekistan is also pursuing long-term infrastructure projects such as the Uzbekistan – Kyrgyzstan – China railway and new road links toward Pakistan.

Indirect impact through global markets

Experts emphasized that the main economic effects for Uzbekistan will likely be indirect.

Iran holds about 12 percent of the world’s oil reserves and roughly 17 percent of global natural gas reserves, making it one of the leading energy producers. Around 20 percent of global oil shipments pass through the Strait of Hormuz.

Disruptions in this region could therefore increase global energy prices, which would eventually affect Uzbekistan through higher fuel costs, inflation, and rising prices for other goods.

Logistics and insurance costs may also increase, while higher prices for metal products could influence Uzbekistan’s domestic market, as Iran is a significant regional producer of metals.

Prospects for regional cooperation

Despite the current tensions, experts say Iran will remain an important strategic partner for Uzbekistan.

The two countries previously agreed to increase bilateral trade to $2 billion. While the current situation may complicate progress toward this target, the agreement itself remains in place.

According to analysts, the crisis could also encourage greater regional cooperation in Central Asia, including efforts to develop import substitution and expand trade partnerships.