RAD No. 192: Russian-Iran Relations

21 Nov 2016

This issue of the RAD updates us on the above bilateral relationship. The first article argues that although there are genuine reasons for Moscow and Tehran to strengthen their ties, establishing a long-term collaboration between the two states will take a lot of work. The second piece then analyzes why the predictions that the Iranian nuclear deal would lead Tehran to deemphasize its ties with Moscow haven’t materialized.

The Russian Analytical Digest No 192 was originally published by the Center for Security Studies (CSS) on 10 November 2016.

Russian–Iranian Dialogue After 2012: Turning a New Page?

Abstract

Since 2012, Russian–Iranian relations have experienced a significant change of course. As opposed to the previous decade of Russian–Iranian relations, both the Russian and Iranian authorities are seriously intended to create a solid foundation for bilateral dialogue. This intention led to the unprecedented intensity of Moscow’s current contacts with Tehran. However, the two countries still need to go beyond mere consultations and finally determine to what extent and in what areas real economic cooperation between them is possible and in what political spheres their collaboration can be effective.

Introduction

Putin’s return to the Kremlin in 2012 marked the beginning of a new period in Russian–Iranian relations that were in severe decline during the previous years of Dmitry Medvedev’s presidency. On June 7, 2012 (only two months after his election), Vladimir Putin met his Iranian counterpart Mahmoud Ahmadinejad. During the protocol part of the meeting, the Russian president clearly stated Moscow’s interest in boosting its relations with Tehran. The problems that, in the opinion of president Putin, both countries should discuss first of all were also outlined in his speech. They included a wide range of regional problems (such as the problem of the legal status of the Caspian Sea, instability in Syria, Iraq and Afghanistan, cross-border crimes, and political processes in Central Asia and Trans-Caucasian region), the issues of bilateral relations and the perspectives on the settlement of the nuclear dispute. For instance, the presidents discussed the problem of the inadequately low volume of bilateral trade and investments, the prospects on Russian–Iranian cooperation in the nuclear and oil and gas sectors, as well as the options for Russian military exports to the Islamic republic.

It is an unlikely coincidence that the intensity of the Russian–Iranian political dialogue has substantially increased after that meeting. Moscow and Tehran actively coordinate their efforts on Syria. The Kremlin is advocating for Iran’s inclusion into international discussions of the situations in Afghanistan, Syria, and Iraq. In September 2014, Russian foreign minister Sergey Lavrov even called Iran “a natural ally” of Russia in the struggle against religious extremism in the Middle East. All these gestures were supposed to demonstrate that Russia regards Iran as more than just a “Southern neighbour”.

Russian Economic Interests and the Sanctions Against Iran

Since 2012, the Russian government has actively worked to secure an effective dialogue between authorities in Tehran and the West on the nuclear issue. It is necessary to remember that Sergei Lavrov’s 2012 proposals set the stage for the current round of negotiations that led to the signing of the Joint Comprehensive Plan of Actions (JCPOA) between Iran and the P5+1 group and the beginning of the partial sanctions lifting. Russian interest in the settlement of the nuclear issue was simple: Moscow hoped that a nuclear agreement would guarantee that Iran would not become another “hot spot” on the post-Soviet space’s periphery. The end of the pariah status of Iran and its gradual reintegration into the international community would also allow Russia to cooperate with the Islamic Republic more actively on regional affairs without danger for the Kremlin of being accused of creating “unholy” alliances. Finally, Moscow hoped that reaching a nuclear agreement would eliminate the sanctions that have hindered Russia’s economic activity in the Iran. Indeed, international sanctions were a serious obstacle for the development of the economic cooperation between the two countries. Over the eight years preceding to the JCPOA, Russian companies failed to make any substantial economic gains in Iran (even when European enterprises pulled out of Iran). Russian investment activity in the Islamic republic since 2006 has been unimpressive (the volume of accumulated Russian investments in less than $50 million). Since 2011, the volume of trade between the countries has been consistently falling by more than 30 percent annually and, by 2014, it had reached around $1.7 billion. According to Moscow experts, the main role in this was played by the international sanctions adopted against Iran that compelled the Russian business majors to refrain from dealing with Iran. The end of the sanctions regime will, in turn, grant Russian corporations better access to the Iranian economy. For instance, the lifting of financial sanctions will have key importance for Russian–Iranian cooperation in the nuclear field. It will allow Tehran to conduct necessary financial transactions. Previously, the inability of Tehran to pay the Russians in time was one of the reasons for the delay of the construction of the first nuclear power unit in Bushehr (currently, Russia has a contract on the construction of the second and third reactors in Bushehr). On the other hand, Moscow will be able to buy on the international market those spare parts and equipment for the construction of new power plants in Iran that it cannot produce domestically.

In the oil and gas sphere, the return of Western companies will probably make the Iranians less interested in the implementation of the barter deal with Moscow that would allow the Kremlin to receive oil (up to 0,5 million barrels per day) from the Islamic Republic in exchange for Russian goods and investments. Yet, the end of sanctions will allow the Russian energy giants such as Lukoil and Gazprom that previously were compelled to limit its cooperation with the Islamic Republic to return to the country and trade the Iranian oil. Thus, according to some sources, Lukoil has been already involved in negotiations with the Iranian authorities regarding investment opportunities in the oil sector of the Islamic republic.

It is even more important that the JCPOA agreement will gradually open the Iranian arms market for Russian corporations. The long expected delivery of the Russian S-300 missile complexes to Tehran in April 2016 was a serious signal both to Tehran and the international community that Moscow has serious intentions to develop the military-industrial cooperation with Iran. Thus, the Islamic Republic is currently interested in Russian help in upgrading and servicing the military equipment that was bought from Moscow in the 1990s. (including 126 T-72 main battle tanks, 413 APCs (BMP-2 model), 33 Mi-171 helicopters, 6 Su-25UBTK fighter jets, 3 diesel submarines and 29 Tor M-1 short-range missile defence systems). The Iranian authorities would also like to use Russian help for the development of their air-defence systems, radio-electronic warfare capacities and naval strength. The necessary groundwork for the Russian return was created by the agreement signed during the visit of Russian Minister of Defense Sergey Shoygu to Tehran on 19–21 January 2015.

Why Is Iran So Important?

First of all, the factor of geographic proximity traditionally plays an important role in bringing Russia and Iran together. Iran’s geostrategic position allowed it to influence the development of the situation in the Caspian Sea region, the Caucasus, Central Asia, and the Middle East. This reality compelled Moscow to discuss a wide range of foreign policy issues with Tehran, such as the conflict in Nagorno-Karabakh, the situations in Iraq and Afghanistan, the stability of Tajikistan, NATO activities in the South Caucasus (primarily, NATO cooperation with Georgia and Azerbaijan), the presence of non-regional powers in the Middle East and Central Asia, the construction of trans-Caspian pipelines, and the instability in the Caucasus. Given the shared visions of Russia and Iran on how to handle some of these problems, the support of the Islamic Republic was (and still is) believed to be important to the success of Moscow’s activities to restore and strengthen Russia’s regional position after the fall of the Soviet Union. The intensification of the bilateral dialogue after 2012 was also motivated by the events of the Arab Spring. When Russian authorities decided to intensify their contact with Iran in 2012, they were seriously concerned by Russia’s shrinking political and economic presence in the region. As a result, Moscow considered Tehran as one of its last footholds in the Middle East, and tried to do its best to secure Russian positions in Iran. In 2014, Russian tensions with the US and the EU over Ukraine resulted in substantial changes to Moscow’s foreign policy and provided another reason for the Kremlin to strengthen its cooperation with Iran. The unprecedented—since the end of the Cold War—scale of confrontation with the West made Moscow regard the intensification of its contacts with Middle Eastern countries as highly important. Finally, Russia and Iran are deeply involved in Syria where they try to save the remnants of the Assad regime.

The Russian–Iranian Marriage of Convenience in Syria

Both Moscow and Tehran are interested in saving the remaining government institutions in Syria. This common task plays in favor of Russian–Iranian cooperation, although each country certainly has its own reasons for saving the remnants of the regime. Russia is largely driven by its security concerns and strong beliefs that the building of a new post-conflict Syria is possible only through the evolution of the old regime, not through its destruction. The confrontation with the West and Putin’s plans to reestablish Russia as an influential world power were the other key factors that led Moscow support the Syrian authorities in their struggle. For Tehran, the necessity to save the government institutions is determined by a different reason. By supporting the Assad government in Syria, Iran fights for its place in the system of the regional affairs. The Iranian conservatives even formulated the concept of the “chain/line of defense” that is comprised of Lebanon, Syria, Iraq and Yemen. According to Iranian conservatives, each of these countries represents the “front line” of Iran’s defenses against its international and regional opponents who strive to undermine its influence in the Middle East.

The beginning of Moscow’s military involvement in Syrian affairs finally gave the Iranian authorities what they had been looking for the last decade: solid political ground for the development of bilateral relations. Since the 2000s, Tehran was looking for a leading world power which could act as a counterweight to US pressure on Iran. Traditionally, Russia was arguably the preferred candidate for this role. Yet during the last decade, Tehran’s attempts to win Moscow’s support typically ended in failure. The Kremlin cooperated with Tehran on a case-by-case basis. Russian authorities closely watched Russian–Iranian cooperation to ensure that it never adversely affected Russia’s dialogue with the West. Nevertheless, even the signing of the JCPOA which substantially eased Iranian relations with the West did not change the plans of Tehran to use Moscow as a counterbalance to the US in the region. Statements made by Khamenei between September–December 2015, showed that the highest Iranian leadership still mistrusted the West and expected its confrontation with the US to continue. Mutual Russian–Iranian interests in saving the Assad government had finally created the long-awaited conditions for strengthening Iran’s cooperation with Russia. Putin’s decision to deploy Russian troops in Syria opened even more options for such cooperation. Since September 2015, both Russia and Iran remain involved militarily in Syria. This, in turn, triggered a greater need for coordination.

However, neither Moscow nor Tehran have any illusions about their ultimately divergent goals in Syria. When characterizing the level of cooperation between Russia and Iran in Syria the advisor to the Supreme Leader of Iran, Ali Velayati, argued that, “each country pursue its own benefits [by supporting Assad], [but] Russia cannot protect its interests in the Middle East and the region alone”. In turn, Iran agreed to help Moscow. Iranian authorities believe that in Syria they are involved in a “small world war” and without Russian support it will be difficult to profit from the war. In other words, Russia and Iran came to an understanding that in order to secure their own interests in Syria they need to cooperate. Consequently, Moscow and Tehran formed a marriage of convenience where each partner tries to reach its own goals through joining efforts. Such an approach implies that the partners not only coordinate their activities, but also try to avoid unnecessary confrontation over issues of secondary importance. They make concessions by temporarily postponing any discussion of disputed issues which may prevent either side from the achieving their primary goals.

Yet, No Alliance Is Expected

In spite of the positive dynamics in Russian–Iranian dialogue, there are, at least, several factors that substantially limit the cooperation between the two countries. First, the formation of any comprehensive strategic alliances with Tehran is not in Moscow’s interest, as this may seriously harm Russian dialogue with several other countries of the Middle East including the Gulf Cooperation Council (GCC) countries. Moscow has no wish to be part of an Iranian pro-Shia camp confronting the GCC-led Sunni coalition. This would affect Russian security as its Muslim population of 15 million is largely Sunni. Salafi groupings in the Gulf have depicted Russians as new crusaders since the beginning of the civil war in Syria. In October 2015, Moscow received a warning when approximately 50 Saudi clerics signed an open declaration calling for jihad against Moscow. Tehran is also concerned about being involved in the wider Russian confrontation with the West while it seeks European technologies and money.

Second, Moscow guaranteed Israel that Russian actions in the Middle East would not pose a threat to Israel. This, of course, is contrary to Iran’s interests. Iran will attempt to increase its presence in southern Syria to have better access to Hezbollah and the Israeli borders. The Iranians also expect a pay-off from Syria when the conflict is over. Now, they will need to share this pay-off with Moscow. This could undermine any revival of the Iran–Iraq–Syria-Mediterranean gas pipeline project that Tehran wants but is a concern for Russia. Moreover, a part of the Syrian elite welcomes Russia’s presence as a means to balance Tehran. This will inevitably concern the Iranians whose military leaders do not see Assad as just a mere foreign policy tool.

Third, in some issues Russian and Iranian positions could be close but it is not necessary that they will coincide. Thus, the two countries have different views on the settlement of the issue of the legal status of the Caspian Sea. As opposed to Russia, Iran is much more loyal to Assad as a person, and it is not ready to accept the scenario of a post-Assad Syria.

In terms of economic cooperation, the Russian–Iranian dialogue also has its limits. Apart from ferrous metals, wood and petrochemical products, Russia has a very limited range of goods to offer Iran—and a continually shrinking range at that. It is not only the international sanctions but mere technological backwardness which prevents Russian companies from dealing with Iran. Thus, Iran currently lacks engineering and technological support as well as equipment for the upgrade and construction of oil refineries and Liquefied Natural Gas (LNG) producing plants. Russia is unable to provide Iran with all the required assistance, equipment and technologies and moreover, is badly in need of them itself.

About the Author

Nikolay Kozhanov is an Academy Associate at the Russia and Eurasia Programme of Chatham House. His recent publications include: Russia and the Syrian Conflict: Moscow’s Domestic, Regional and Strategic Interests (London, Berlin: Gerlach Press, 2016).

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Russian–Iranian Relations: Recent Trends and Developments

Abstract

While some in Moscow may have feared that the Iranian nuclear accord would lead to an overall improvement in Iranian–Western relations which would result in Tehran de-emphasizing ties with Russia, this has not occurred. If anything, Russian–Iranian cooperation has increased recently both in the security and the economic realms. Important differences, though, remain between the two countries, as recent events have shown. These differences, however, do not appear to be strong enough to derail their increased cooperation.

Introduction

Russian observers have long understood that Iranian–American hostility has been a factor motivating Tehran to seek close ties to Moscow despite lingering Iranian resentment regarding Tsarist and Soviet interventions in Iranian affairs and ongoing differences over numerous policy issues (including the delimitation of the Caspian, oil production levels, and Russia’s cooperation with Iranian adversaries in the region). Even areas of Russian–Iranian cooperation—such as Russia’s completion of Iran’s Bushehr nuclear reactor and weapons sales to Iran—have proved contentious due to delays, disputes over contract terms, and even cancellation of agreements (such as when President Dmitry Medvedev announced that Moscow would not deliver S-300 air defense missile systems to Iran in 2010 even though Tehran had already paid for them).

Many Russian observers, then, have expressed concern that if Iranian–American relations ever improved, this would lead to an overall Iranian turn toward the West and away from Russia. As progress was made toward the achievement of the Iranian nuclear accord (which was a high priority for the Obama Administration in particular), some Russians feared that the time had come when the Iranian–American rapprochement they feared which would soon result in less Russian influence in Iran. Some had called for Russia to somehow derail the talks, but others pointed out that so long as Washington and Tehran wanted to achieve a nuclear accord, any effort by Moscow to stop it would only lead to an agreement being reached without Russian participation, and that would make Moscow appear weak and unimportant.

By now, though, it is clear that the coming into force of the Iranian nuclear accord has not resulted in an overall Iranian–American rapprochement, nor is it likely to any time soon. This being the case, there has not been an attenuation of Russian–Iranian relations that many in Moscow feared that the Iranian nuclear accord would lead to. Indeed, Russian–Iranian cooperation has increased recently.

Converging Interests

One factor contributing toward Russian–Iranian cooperation is the joint fear on the part of their top leaders that America and the West seek to topple them through supporting “color revolutions” against them. Iranian Supreme Leader Ayatollah Khamenei has placed a prohibition on expanding Iranian–American ties beyond nuclear cooperation. In an article published in The National Interest on May 3, 2016, the Iranian dissident author, Akbar Ganji, wrote that, “in Khamenei’s view antagonism toward a common enemy, the United States, is the basis for unity between Iran and Russia.”

Moscow and Tehran, as is well known, have also been pursuing the common goal of protecting the Assad regime in Syria against the domestic opposition that arose against it during the onset of the “Arab Spring” in 2011. Before September 2015, forces from Iran (as well as Iranian allies from Hezbollah and various Iraqi and Afghan Shi’a militias) undertook the main burden of defending Assad while Russia played more of a supportive role in supplying arms to Damascus. But with the Assad regime losing ground during the summer of 2015 despite their support, Putin decided to ramp up Moscow’s role through sending Russian air force units to Syria where they launched a bombing campaign that not only put a stop to the Assad regime losing ground, but to its regaining lost territory from its opponents. Russian and Iranian press accounts stated that joint planning for the Russian intervention began months in advance. Further, the combination of Russian air power and Iranian (plus allied militia) ground forces has proven highly effective.

Other forms of Russian–Iranian military cooperation have also increased. In April 2016, TASS confirmed that Russia had begun supplying S-300 air defense missile systems to Iran. Moscow had originally agreed to do so in 2007, but President Medvedev had then canceled the deal in 2010, perhaps as part of his effort to secure U.S. Senate ratification of New START (Strategic Arms Reduction Treaty). The subject of Russian–Iranian contention afterward, President Putin announced in April 2015 that progress on the Iranian nuclear accord allowed Russia to lift the ban on selling S-300s to Iran. In addition, TASS also announced in April 2016 that Russia might supply radiolocation and electronic warfare systems to Iran. Trilateral security cooperation among Russia, Azerbaijan, and Iran also advanced.

In addition, Russian–Iranian economic cooperation has expanded recently. Majlis Speaker Ali Larijani declared that Iran will give Russia priority in any industry it wants to invest in. A top Russian customs official announced that Iran had promised to replace Turkey (whose ties to Russia soured dramatically after the shoot down of a Russian military aircraft by Turkish forces in the vicinity of the Syrian–Turkish border in November 2015) as s supplier of perishable foodstuffs. In addition, Moscow and Tehran signed a memorandum of understanding on railway development, and have discussed Russian investment in Iranian transportation infrastructure (including seaports). Moscow and Tehran have also agreed to explore for underground sources of water in Iran. And the two sides are working on expanding Russian–Iranian educational cooperation.

On the diplomatic front, Iranian Foreign Minister Zarif expressed hopes that Russian–Iranian cooperation could lead to progress on resolving the Nagorno-Karabakh dispute as well as delimiting the Caspian Sea. Many news reports suggest that Iran may soon achieve its long sought goal of joining the Shanghai Cooperation Organization, though this has not yet occurred.

Diverging Interests

Russian–Iranian cooperation, then, did not just remain strong after the Iranian nuclear accord was agreed upon, but has actually increased since then. Nevertheless, ties between Moscow and Tehran are not completely harmonious. The Iranian press frequently refers to long-standing Iranian grievances against Russia, including the loss of territory to Tsarist Russia in the early 19th century, Tsarist and Soviet interventions in Iran in the 20th century, Soviet support for secessionism in Iran’s northwest after the two World Wars, and Soviet support for Baghdad during the 1980–88 Iran–Iraq War. Akbar Ganji has noted five more recent grievances: 1) Russia’s failure to veto UN Security Council resolutions against Iran over the nuclear issue; 2) the lengthy delay in Russian completion of the Bushehr nuclear reactor; 3) Russia’s failure to sell weapons (including fighter aircraft, tanks, and various missiles) that Gorbachev said Moscow would sell to Tehran; 4) Russian pursuit of aims in Syria “which may sometimes be against Iran’s;” and 5) Russia’s close relations with “Iran’s archenemies,” Israel and Saudi Arabia.

A recent episode suggested that Moscow is not quite as committed to working with Tehran in the security realm as Iranian leaders would like. Ali Akbar Velayati (currently foreign policy adviser to Iran’s Supreme Leader and previously Iran’s foreign minister) in early February 2016 declared after a visit to Moscow that there are “prerequisites” for the creation of an alliance between Iran, Russia, Syria and Hezbollah. Soon thereafter, though, a Russian Foreign Ministry official, described Velayati’s statement as “speculative,” and declared that, “there are no plans of creating such an alliance.”

Another such episode occurred in August 2016. The Russian press announced with great fanfare that Russian bombers were flying missions over Syria from an airbase in northwestern Iran (a much shorter distance from Syria than southern Russia, thus allowing Russian bombers to carry less fuel and more bombs). This announcement, though, aroused widespread criticism inside Iran, and the arrangement was terminated after just one week.

There are also limits to Russian–Iranian cooperation in the economic realm. In the same interview in which Majlis Speaker Larijani said that Iran will give priority to Russian investment, he also admitted that, “Iranian businessmen traditionally work with Europe.” Further, while Russia and Saudi Arabia both expressed their willingness to join with other oil exporters in freezing production in order to support oil prices, Tehran refused to do so and insisted that it would expand its oil production to levels that it had reached before the imposition of UN Security Council sanctions against Iran. To the extent that Iran’s actions serve to increase the overall supply of oil, of course, they serve to keep oil prices low for all oil exporters, including Russia. Further, while Iran sought to take advantage of poor relations between Russia and Turkey (which have recently improved) to increase Iranian exports to Russia, Iran also sought expanded economic ties with Turkey.

With regard to Syria, Moscow seems more eager to arrange a negotiated settlement between the Assad regime and at least some of its opponents than Iran does. In addition, while Russia has been supportive of Syrian Kurds as well as their hopes for a “federal solution” that would allow them autonomy inside Syria, Iran has sided with Turkey in opposing these Kurdish aspirations. Turkey and Iran, of course, both fear Kurdish secessionism within their own borders too.

While Iran joining the Shanghai Cooperation Organization, when it occurs, may appear as a sign of closer Russian–Iranian ties, the SCO is not a military alliance and its members are not bound to come to one another’s defense. Indeed, if reports that Moscow long favored Iranian membership in the SCO while Beijing did not are true, then Iran’s eventual admission may be more a sign of warming Sino–Iranian ties than Russo–Iranian ones.

Further, while Moscow delivering S-300s to Tehran is clearly an indication of improving Russian–Iranian relations, it must be noted that these are not the more advanced S-400 air defense missile systems which Russia is deploying to protect its own forces in Syria. Finally, in reaction to Putin’s March 2016 announcement that he was withdrawing the “main part” of Russian forces from Syria, Israeli President Rivlin immediately sought—and reportedly received—assurances from Putin that this would not result in Iran and Hezbollah being in a stronger position to threaten Israeli interests. Such reports must have left Tehran wondering whether Moscow had previously made the case to the Netanyahu administration that the Russian presence in Syria served to restrain Iran and Hezbollah from undertaking actions detrimental to Israel. Just as America’s Arab (as well as some other) allies are frustrated by Washington’s close ties to Israel, Iran is frustrated by Moscow’s close ties to the Jewish state.

Conclusion

The Iranian nuclear accord has not led either to an Iranian–American rapprochement or a diminution of Russian–Iranian cooperation. If anything, Russian–Iranian cooperation has increased since the accord came into effect. Nevertheless, while Moscow and Tehran have shown that they can cooperate effectively on common concerns, neither feels the least compunction about pursuing policies that the other does not approve of when their interests diverge.

So far, they have agreed to disagree on issues where their interests diverge and not allow these disagreements to affect their cooperation on those issues where their interests converge. This seems likely to remain true unless their interests sharply diverge on issues that are of great importance to either or both. These might include Russia becoming more willing to accommodate Sunni Arabs in a Syrian peace settlement than Iran is, increased Russian support for Kurds in Syria and (more ominously for Iran) elsewhere, or a strong improvement in relations between America and the West on the one hand and Russia or Iran (but not both simultaneously) on the other. None of these or other such contingencies, though, seems likely to emerge at present, and so the current pattern of Russian–Iranian cooperation on some issues and lack of it on others appears likely to continue.

About the Author

Mark N. Katz is a professor of government and politics at George Mason University (Fairfax, Virginia, USA).

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