The recent rapprochement between Iran and the United States, regardless of how fragile it is, has driven a number of analysts and politicians in Russia and abroad to speculate about the possible negative consequences for Russia’s relations with Iran of Tehran’s “pivot to America.” I find such speculation and fear of the possible decline of Iran-Russia ties baseless. Russia is interested in the normalization of the Iran-US relationship, and can clearly benefit from it.
First, from the Russian perspective, Moscow is no less interested than the West in clearing up suspicions about the Iranian nuclear program, which is the main condition for normalization, and excluding the possibility of Iran’s nuclear weaponization. Second, the lifting of sanctions would allow Russian companies access to the Iranian market. The Russian companies believe that they can compete with others successfully, particularly in the spheres where they have already acquired expertise and where they are able to offer better projects on better conditions. The geographical proximity of Russia and Iran can also ease the development of new projects, including the possible construction of new nuclear plants.
There was a leak from well-informed circles to the Russian media that the Iranians were negotiating with the Russian company Atomstroyexport on the construction of two new units in the Bushehr plant that would produce 1,000 megawatts each. Third, it will remove all barriers to Russian-Iranian military and technical cooperation (let us remember in this regard the failed delivery of the C-300 missile systems, met with outrage by Tehran). Fourth, as Moscow sees it, even in the case of full normalization with the West, Tehran will need diversification and counterbalances. Constructive diplomatic cooperation between Russia and Iran on the Syrian crisis and Russia’s recognition of Tehran’s regional role would support this.
During my visit to Tehran, just before Foreign Minister Mohammad Javad Zarif’s visit to Russia, almost all my interlocutors, including several high-level officials, asserted that President Hassan Rouhani is determined to foster ties with Russia exactly now, when he is feeling an urgent need for that. During Zarif’s visit, a lot of issues were discussed, including a trade deal between Russia and Iran for the purchase of up to 500 barrels per day of crude Iranian oil in exchange of Russian goods worth of $18 billion annually.
The idea of this oil-for-goods deal was proposed for the first time to President Vladimir Putin by Rouhani in Bishkek, during the Shanghai Cooperation Organization summit in September 2013. This was, the Iranian diplomats said, followed up by them in the course of two telephone conversations, as well as during Russian Foreign Minister Sergey Lavrov’s visit to Tehran Dec. 13, 2013. By the way, the Iranian side sees in Putin’s two calls to Rouhani a sign of a real breakthrough in Moscow’s approach toward cooperation with Iran at a time when the level of trade and economic exchanges dropped last year to an extremely low level of less that $2 billion. Iranians remember that during his visit to Tehran, Lavrov said that the volume of trade between the two states should be at the level of $30 billion.
The US administration expressed its serious concern about the Russia-Iran trade deal, and even considers it “inconsistent with the terms of the P5+1 agreement with Iran,” as Caitlin Hayden, spokesperson for the White House National Security Council, told Reuters. She warned that it “could potentially trigger US sanctions.” But Putin insisted in response that it was Russia’s right to buy oil from Iran, because it had never subscribed to any unilateral sanctions on Iran either by the United States or the European Union, and did not have any obligations related to them.
I don’t share the view of some analysts who think that the main incentive for accepting the Iranian proposal for Russia was of a political nature, though a political message can be also found in it. My guess is that in reality, the Russian leadership believes that the determination of Rouhani to solve the nuclear crisis by the means of concessions is genuine, and Iranians can be trusted. Projecting such a scenario, one can easily assume that pretty soon, lots of companies will rush to make deals with Iran. So far, even in the worst-case scenario, in which the sides are not able to immediately start working on the oil-for-food scheme, it is still practical to reserve a place to Russia for the future. Such a project is economically feasible and profitable for both sides. The experience of the Russian LUKOIL company’s deal with Iraq under sanctions was also considered impractical by many experts, and after the fall of the regime it looked like Russia was going to lose Iraq, given its disapproval of the invasion. Now, I don’t know who exactly is losing Iraq — the worst thing that can happen is that all of us together lose it — and anyway, LUKOIL is already working there. The recently signed Russian contract with the Syrians on a Mediterranean shelf gas field stands in the same group of projects.
As of now, we don’t exactly know what goods will be delivered to Iran, or how. Russian experts say that it needs black metals, machinery and other equipment, vegetable oil and wheat. Anyway, this is not a purely barter deal, and there definitely should be financial transactions. We can presume that the purchased oil will be forwarded not to Russia but to its customers, probably in Asia. There is some speculation that the Syrian interests might have been somehow involved here, but that’s just a guess.
We’ll see how the events around this deal are going to unfold and to what extent it can really boost Russian-Iranian economic cooperation, which has always faced obstacles. Those are, for instance, a feeling of mistrust toward Russia deeply embedded in the Iranian mentality based on historic grievances and the feelings of vulnerability, fear, isolation and suspicion. I often hear from my Iranian colleagues complaints about not only the non-delivery of the C-300s, but even the conquest of the southern Caucasus in the 19th century (already three independent states) and the failure to submit to Tehran the original copies of the treaties of Gulistan (1813) and Turkmanchai (1828). There is also very strong pro-Western sentiment in the Iranian public.
As I was told some time ago, Iranian negotiators with the United States and other Western partners have been instructed by the supreme leader of Iran, given the priority of lifting sanctions, to concentrate entirely on the nuclear issue and to avoid negotiating all other topics. I can mention in this regard to one of the questions I recently got from an audience in the United States, about the possibility of striking a deal with Tehran on changing its position toward the Syrian crisis, Israel or the situation in Lebanon. One of the Iranian analysts I talked with suggested that new issues can be brought onto the negotiating table if the Americans demonstrate a “real desire” to make a deal with Iran on the nuclear issue. According to a senior diplomat, their complaints can be summarized into two issues: that the Americans begin bargaining after they have already signed documents, and that they are delaying the process. But the Iranians themselves will surely be interested in discussing the situations in Afghanistan and Iraq, which are important for the Americans. By the way, I heard from the same source that Tehran is not very afraid of the scenario of the Taliban coming to power in Kabul because “They have learned lessons from the past and are not the same Taliban as they used to be before 2001.”
Moscow is also interested in expanding security cooperation with Tehran on Afghanistan after the withdrawal of US forces on two main tracks: deterring the threat coming from international terrorist groups, especially with a significant Central Asian component, and confronting the flow of narcotics into their territory. Last year, areas under the cultivation of poppy in Afghanistan grew by more than 30% because many Afghans started losing their jobs with American withdrawal and turned back to their old business.
Yet earlier this week, when I met former Iranian Foreign Minister Ali Akbar Velayati, now the head of the Expediency Council’s Center for Strategic Research and an advisor the the supreme leader, he highlighted above all Iran-Russia cooperation toward the Syrian conflict, expressing his confidence in a political solution and “conditional” optimism about the future of Syria.
