By: AGBI

Saudi Arabia and Turkey have agreed to jointly explore building new logistics centres and expanding rail networks to avoid supply disruptions caused by the US-Iran war.

Saudi transport minister Saleh Al-Jasser and his Turkish counterpart Abdulkadir Uraloglu signed two memoranda of understanding covering logistics services and operations, as well as a railway agreement to expand cooperation in technology and infrastructure, the state-run Saudi Press Agency reported.

“We have entered a new historic phase in the journey of relations between Turkey and Saudi Arabia in the fields of transportation and logistics services,” Uraloglu said in a social media post.

The regional conflict has effectively closed the Strait of Hormuz since February 28, disrupting global energy and commodity supplies.

Ankara and Riyadh are closely monitoring developments on the Syria-Jordan-Iraq route, the state-run Anadolu news agency reported, quoting Uraloglu.

“Two test runs starting from Turkey through Iraq and extending to Saudi Arabia have clearly demonstrated the feasibility of this route,” he said.

Last week, Turkey’s transport minister said that the country was planning to extend the historic Hejaz railway to Oman to create an alternative global trade route to the Strait of Hormuz.

In September, Ankara joined forces with Syria and Jordan to return the Hejaz railway to service.

The historic Hejaz line was part of an Ottoman-era narrow-gauge railway linking Istanbul to Medina in Saudi Arabia via Damascus and Amman, though much of it, including the Jordanian component, fell into disrepair after the First World War.

Meanwhile, the Asian Development Bank (ADB) approved a €645.83 million ($750 million) loan to finance the construction of a 127km greenfield railway line in Turkey, advancing its role as a vital transport and logistics hub linking Europe and Asia.

The $8.3 billion Istanbul North Rail Crossing project will bypass the Istanbul metropolitan area and provide a high-capacity overland rail link across the Strait of Istanbul.

The project is expected to receive cofinancing from the Asian Infrastructure Investment Bank, European Bank for Reconstruction and Development, Islamic Development Bank, and Organization of the Petroleum Exporting Countries Fund for International Development, ADB said in a statement.