Does Russia Benefit from the Iran Deal?

By Alexey Ilin & Claire Berger

The nuclear accord between the P5+1 and Iran will have significant implications beyond the Middle East, particularly when it comes to Russo-Iranian relations. As Paul N. Schwartz, a non-resident senior associate with the Russia and Eurasia Program at the Center for Strategic and International Studies, has argued, “Russia is likely to emerge as a key beneficiary of the process.” There is little doubt that the agreement may open new opportunities for Russia’s bilateral relations with Iran, but these rest on shaky foundations and have serious limitations. In fact, convergence between Russia and Iran depends heavily on their respective relations with the United States and the European Union.

Benefits to Russia

So, what particular benefits does the deal offer Russia? Primarily, the nuclear agreement reinforces the integrity of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). In this context, Russia is the party most interested in preserving the NPT and ensuring that the nuclear club remains as small as possible. New nuclear-armed states wither Russia’s great power status, which rests, in part, on its nuclear arsenal. The continued decline of the Russian economy will inevitably undermine Russia’s conventional military capabilities, causing it to rely even more on its nuclear shield.

The nuclear accord also helps shape the Middle East in ways Russia wants. Compared to its neighbors, Iran’s strong military, prospects of economic growth, technological capabilities, and knowledge base make the country an attractive partner for Russia. An emboldened Iran will help ward off the self-proclaimed Islamic State, deter new American interventions in the region, and facilitate greater Russian presence in the Middle East. This is President Vladimir Putin’s ideal vision of the Middle East: keep the United States out, religious extremism down, and Russia in.

Nevertheless, Iran and Russia are not necessarily on a fast track to close friendship. One of the foundations of Moscow-Tehran relations is a mutual distrust of the U.S. government. If Iran-U.S. relations improve, this would threaten Russia’s status in Tehran.

Iran’s Supreme Leader Ayatollah Ali Khamenei recently stated that the nuclear agreement would not change Iran’s foreign policy, which must have given some hope to Putin. Still, the Supreme Leader’s presumed abhorrence of the United States does not necessarily mean there will be an alliance between Iran and Russia. Now that the nuclear deal has been arranged, the two countries simply do not have much, in the way of concrete and significant activities, to do together. While Iran is a central actor in most of the region’s critical challenges, like Yemen, the fight against ISIS, and even Syria, Russia is more of an observer or peripheral party. In fact, during the same speech made after the deal’s announcement, the Supreme Leader said, “we will never stop supporting our friends in the region and the people of Palestine, Yemen, Syria, Iraq, Bahrain and Lebanon.” He did not say anything about Russia.

While this aspect of Iran’s changing international relationships may diminish future political ties with Russia, there is plenty of room for mutually beneficial economic cooperation. First and foremost, both sides are interested in engaging in armaments trade. Iran’s Foreign Minister Mohammad Javad Zarif has already stated that Tehran anticipates the delivery of S-300 surface-to-air missiles from Russia, as well as broadened defense cooperation with the Russian government.

This should be of no surprise. In the 1990s, Russia kept Iran armed, while Iran helped maintain Russia’s military-industrial complex, striking deals worth $3.4 billion from 1991 to 2010. In the 2000s, the arms trade slowed down because of nuclear-related sanctions imposed against Iran.

Unfortunately for the two countries, UN Security Council Resolution 2231, which endorsed the Iran deal and was unanimously adopted on July 20, does not provide for immediately lifting the international arms embargo against Iran. Restrictions will continue to apply for another five years, or until the IAEA verifies various aspects of Iran’s nuclear program. Even after the five-year period has passed, Russia is not guaranteed to have an arms monopoly in Iran. In fact, by 2020, Russian weapons may themselves have become obsolete because of the technological and financial blockade imposed against Russia after its annexation of Crimea in March 2014.

Apart from the arms trade, Russia has an opportunity to engineer a number of unique projects in Iran. In November 2014, Moscow and Tehran signed a contract for the construction of two more power units at the Bushehr nuclear power plant, with a possibility of six more at a different site. Russia’s Rosatom State Nuclear Energy Corporation has recently announced it would start construction on Bushehr-2 this autumn. Other agreements give Iran access to Russian satellite technologies and astronaut training, and provide technology transfers from Russia to Iran in the areas of drilling, mining, metallurgy and railway industries.[1]

Despite ambitious declarations from both sides, however, some of these projects might never be realized. In one infamous example, it took Russia twenty years and $1 billion to complete the Bushehr project. If European and American companies enter the Iranian market, their cheaper and faster operations may push Russia out. In this way, Russia’s precarious advantage in Iran’s industrial and technology markets very much depends on the West’s unwillingness to engage.

The nuclear deal will open a window of opportunity for Russia and Iran to enhance their bilateral cooperation in multiple spheres. But, this cooperation still has its limitations and should not be viewed as inherently threatening to Western countries. Going forward, the Moscow-Tehran relationship will largely depend on the degree of engagement between Iran and the West, as well as the extent to which Russia remains isolated from the Western-led international system.

[1] Contemporary Russian-Iranian Relations: Challenges and Opportunities (Moscow: Spetskniga, 2014), ed. Ivan Timofeev, Timur Makhmutov and Elena Alekseenkova, pp. 27-28.

First published by Muftah