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The Strategic Meaning of Russia-Iran Relations

Saturday, 04 October 2014 08:14
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by Gregorio Baggiani*
EPOS Insights



Relations between Russia and Iran date back at least to the 18th century, and the two countries have been territorial neighbours since the Russian conquest of the Caucasus in the early 19th century. As a bordering country, the Russian Empire, needed to establish diplomatic, trade and political relations Persia, as Iran was then called. With the 1813 Treaty of Gulistan Iran lost several Caucasian territories, such as Georgia and some regions of current-day Azerbaijan to the Russian Empire. Relations between Russia and Iran continued into the 20th century and right up to the Second World War, when in 1941 Iran was portioned out between the United States, Great Britain and the Soviet Union not only to guarantee military supplies to the latter, then engaged in the war against Nazi Germany, but also because the country's government had shown pro-Nazi sympathies.

During the Cold War, Soviet-Iranian relations remained quite tense, due to the regime of Reza Pahlavi, who was an anti-communist to the core and strongly supported by the United States. The tension reached its height during the Soviet invasion of Afghanistan in 1979, when the revolutionary Iran of Ruhollah Khomeini played a crucial role in the USSR's decision to invade Afghanistan. The Soviet Union, just like the USA, feared and needed to contrast Shia expansionism in the region, above all to safeguard its Central Asian regions, which had Sunni majorities, even though this expansion was to be considered quite unlikely, due to the intrinsic confessional differences between Sciahas and Sunnis. With the demise of the Soviet Union the consistency of the Russian-Iranian border decreased, but the southern Caucasus still represents a common area of interest between the two countries.

The Present

To this day good relations with Iran mean for Russia containing to a certain extent a potential increase of terrorism in the Russian Northern Caucasus. Shia Iran actually represents an obstacle to the spread of Sunni terrorism, essentially originating in Saudi Arabia, a state with which, for different reasons, neither the Russian Federation nor Iran have good relations. Iran, on the other hand, and in particular on the basis of Russia's Euroasist vision, which means a substantial rejection of cooperation with the West and hence the search for alliances in the East, is part of a list of countries (which include China and India) with which Russia has established an alliance capable of effectively contrasting the West; for example, opposing US sanctions against Iran, but respecting UN ones. Iran, on its part, after the Khomeini Revolution, chose a policy of non-intervention in what it considers the internal issues of the Russian Federation.

At the end of the Cold War and of the bipolar system, relations between Russia and Iran have taken on a less ideological tone and more of an economic and geopolitical one, because the principle of “the enemy of mine enemy is my friend”, (in this case the US play the role of the geopolitical adversary ), make Iran a geopolitical ally. An alliance based not only on ideological reasons, on the challenge to Western, and above all US, hegemony in the Middle Est, but also fuelled by healthy interregional exchanges, concerning mainly the importing of Russian weapons and non-military nuclear technology. Relatively limited exchanges when compared to the economic potential of the two countries, around 1%, but still important for Russian technology exports, which generally do not find outlets at an international level, if not in third world countries or countries which, like Iran, are for political reasons outside the main worldwide commercial flows.

The Issue of Iranian Nuclear Capacity and the Role Played by Russia

Clearly the issue of Iran's military nuclear potential represents a wild card for Russia too, because it could considerably alter power relations in the region, and hence regional balances, including the Treaty on the Non-Proliferation of Nuclear Weapons, which Moscow also considers the mainstay of regional and international security. As we've seen, Russia and Iran effectively cooperate politically and commercially (for example, the two countries have recently signed an oil for goods type contract according to which Russia pays Iranian oil purchases with Russian-produced manufactured goods for a total value of 20 billion dollars). This automatically strengthens Teheran's negotiating position on the nuclear issue, without this necessarily implying any intention on Moscow's behalf to help Iran build nuclear weapons.

Significantly, Russia's interest is to reach a negotiated solution that can somehow satisfy both Iran an the other states participating in negotiations (United States, Russia, China, Great Britain, France and Germany), the so-called 5+1. Moscow cannot afford a swing away of Iran and will tend to do everything it can to prevent the country from moving closer to the West, maybe by continuing to supply weapons and helping it in its race towards achieving a civil nuclear energy programme, while not failing to use its “technological leverage” with the Iranian authorities.

The latter implies the opportunity to build the nuclear power stations, either rapidly or slowly, in such a way as to influence Iran's behaviour in nuclear negotiations, or to reprocess, under Russian control, fissile material for Iranian nuclear plants, ensuring that this isn't enriched to produce nuclear bombs. Russian diplomats are also very good at dragging negotiations on nuclear power with delaying , or would in any case considerably alter its balances in favour of Iran. Possession of a nuclear weapon would give Iran supremacy over the Sunni monarchies of the Gulf, the military potential to attack Israel, international prestige and the power of deterrence, hence the near certainty of not being attacked. All security elements Iran is certainly interested in, but not necessarily Russia.

The hypothesis of an attack against Iran by the US or Israel, because of its nuclear programme, is also seen with fear by Moscow, because “Moscow’s opposition to an Iranian bomb program is not because of concern about an Iranian attack against Russia but to other considerations. Russians worry about the health of the global nuclear non proliferation regime at a time when many potential nuclear weapons aspirants are located in Russia’s vicinity. Even more, they fear that Israel and the United States might respond to an Iranian nuclear weapons program with a military strike, resulting in unpredictable consequences for one of Russia’s neighbours. If tensions surrounding Iran’s nuclear program spark a war, Russia might derive immediate benefits from surging world oil prices, but mass conflict could result in unwanted regime change in Tehran, with a more radical government directly challenging Russian policies toward Chechnya or the Caspian Sea Basin, or threatening other Russian interests.

The prestigious US political analysis journal quoted here stresses why the Russians pay special attention to questions relating to the Iranian nuclear programme: “Even in the absence of war, Iran’s nuclear and missile activities are helping NATO justify its missile defence programs, which Russians profess to fear could eventually degrade their nuclear deterrent.

The Issue of the Legal Status of the Caspian Sea and the Russia-Iran Alliance

Currently Russia and Iran also cooperate in maintaining the legal status quo in the Caspian sea signed by Soviet Union and Iran in 1921 and 1940. But there also exists an aspect related to international maritime law that requires a brief preliminary explanation. The question of the legal status quo in the Caspian Sea was tackled by the 1982 Montego Bay United Nations Convention on the Law of the Sea, which defines the Caspian Sea a sea, rather than an internal lake, without however finding a definitive solution to the age-old problem.

This controversy – is the Caspian Sea a sea or a lake? – conceals Russia and Iran's ambition to prevent, with specious and legally quite vague objections, the full exploitation by the other coastal states – Kazakhstan, Azerbaijan and Turkmenistan – of the oil fields beyond the limits of their territorial waters and hence to fulfil their complete independence from Moscow. This prevents the other coastal states from freely using their oil and gas resources, because the Caspian Sea Treaty enforces a shared use of energy resources. This allows Russia (though it has also signed a bilateral treaty for the division of Northern Caspian energy resources with the other three coastal states) and Iran to keep hostage the other signatories of the Treaty, particularly Turkmenistan and its project for a Trans-Caspian gas pipeline. This is obviously not a secondary factor, because it would allow the export of millions of cubic metres of gas towards the Western markets.

The Treaty in question dates back to the Soviet era (1940), when the Caspian Sea was shared solely between the Soviet Union and Iran. For Ashgabat the construction of the Trans-Caspian gas pipeline would be a strategic element for the development of its energy resources and hence for its economy. Iran is therefore doubly important to Russia, because it allows it to keep substantially at a standstill any talks that question the legal status of the Caspian Sea, which would see Iran's percentage of shore area reduced form the current 20% to 13%, with a marked decrease of its possibilities of oil and gas extraction, which still represent quite a modest quota of Iran's exports and potential exports if US and UN sanctions were repealed.

Indeed, if Caspian Sea oil and gas became, beyond the technicalities, available on the market, without the risk of legal actions initiated by coastal countries challenging extraction rights, this would most probably lead to a considerable reduction in oil prices at an international level.

For this reason a definitive solution of the legal status of the Caspian Sea, and hence of the ownership arrangements concerning the exploitation of energy resources, would allow oil companies – and Western ones above all, including Italy's ENI, which has a strong presence in Azerbaijan and Kazakhstan, as well as in Turkmenistan – to make accurate calculations on the ratio between infrastructure investments and obtainable incomes in concert with the other international partners of the consortium that possesses offshore extraction rights for the Azerbaijan fields. This is a possibility that the oil producing countries with an already solid presence on the market (Russia and Iran) do not of course hope for, interested as they are in maintaining a monopoly (or near monopoly) in the oil market, also by controlling the pipelines that mainly cross Russian territory.

The legal status of the Caspian Sea actually prevents the pipelines from going through shared territories, the ones subject to the exploitation regime determined by the legal status of the Caspian Sea, without prior authorization from the other states holding transit rights. As well as the issue of the legal status del Caspian Sea, which blocks the influx of considerable quantities of gas and oil on Western markets, Iran's position of relative isolation also allows Russia to act as mediator between that country and the West (in particular on the nuclear issue) and at the same time it prevents Iran from opening its own routes towards the West to the Caspian coastal states, hence privileging almost exclusively via Russian territory. It is therefore not difficult to understand why Russia pursues a policy generally tending towards maintaining the regional status quo, which mainly corresponds to its geopolitical and economic interests.

In the Caspian not only Russia, but Iran too, is playing a crucial match for its interests and for its very existence, because a swift change of the legal status of Caspian Sea, and of the regime to exploit its resources, could considerably increase the energy production of the other coastal states and lead to a considerable reduction in energy prices at the international level, with the consequences we can imagine for the Russian balance of payments.

Without calculating the predictable consequences for the country's internal political stability in the mid and long term, a factor that a regime like Putin's, which highly values political stability, can only hold in high consideration. Besides, oil and gas prices have direct effects not only on the stability of the Russian political system, but also on the country's territorial cohesion, because without adequate finances from Moscow the more far-off regions tend to acquire higher levels of autonomy from central power.

In the years Moscow has developed several tools to deal with the price swings of energy products, such as Stabilisation Funds and Sovereign Wealth Funds. Nonetheless, a sharp decrease in energy prices could cause serious problems for the country's stability in the mid to long term. If it's true that Vladimir Putin, particularly during the Crimean and Ukrainian crises, has made a masterful use of brinkmanship to obtain tactical advantages and concessions from the West, he is also quite a careful "gambler", one who knows the extent to which he can push the balances of the international system without causing damage to the Russian political system.

The match being played in the Caspian Sea and in Iran, as well as relations with China, can be decisive for the future well-being of Russia in the decades to come. This allows Putin to obtain the  material resources to go ahead with his military development programme, and hence of re-establishing Russia as a great power (velikoderzhava). But, above all, it allows him to go ahead with his authoritarian policies in Russia, in exchange for a gradual increase in the population's well-being, obviously on the basis of state resources and not on that of a liberal society founded on free enterprise, which would not necessarily make political and social choices in tune with a statist and ideologically conservative ruling class as is Russia's today.


Russia-Iran Relations and the International Context in the Light of the Ukrainian Crisis

What will be the impact on Russia-Iran relations of the partial reconciliation between the US and Iran, also in the light of the current tension between Russia and the US?

What advantages will Iran be able to obtain from this situation and from the relaxation of Western sanctions, and hence of less dependence on Russia?

To what extent will the Ukrainian question allow Iran to “raise the price” in negotiations with a Russia besieged by Western sanctions?

And to what extent, on the other hand, will the Crimean and Ukrainian question as a whole allow Russia to raise its price in negotiations with the West in finding a solution to the Iranian nuclear power issue?

Or will the current state of tension between Russia and the West lead to a further reinforcement of Russia-Iran relations?

With regard to Iran, Russian diplomats face a complex and delicate political situation that concerns non-proliferation, and hence the opportunity of finding solutions capable of avoiding a conflict or regime change, of maintaining regional security, increasing Russian influence in Iran, limiting US penetration in the area and, lastly, maintaining cooperation in the energy sector and economic cooperation in general. The hierarchy of these objectives can only vary depending on the circumstances, leading to a choice between short-term, medium-term and long-term objectives.

It is evident that a softening of relations between the USA and Iran, which has actually been the case since mid-June 2014 with the removal of sanctions, would represent a serious peril for Russia, because it would reintegrate the country once more into the core of the world economy, with a consequent lowering of the price of crude oil at an international level. It would also make cooperation with Russia less crucial for Iran, on top of the fact that the country could become an optimal route for energy from Caspian Sea and Central Asia towards Europe and from the Persian Gulf towards China, a perspective that the United States are obviously not fond of, and which would also make the Russian energy routes towards the West more or less useless.

It is obvious that Russia will try anything to avoid a rapprochement between the United States and Iran as something that would give it a very serious blow: the transformation of Iran from a state at the fringes of the international community, the Western one at least, to one fully integrated into it, with all the evidently positive consequences for Iran of this change of status.

The reintegration of Iran into the international community would then open the way to a whole range of possibilities, from economic ones – like the opening up of Iran as a transit territory for the pipelines and the opportunity to export more crude oil and hence cause a lowering of oil prices on the world market – to the most burning political issues. Amongst these, we could consider the resolution of the Israeli-Palestinian conflict, a pacification in Afghanistan, where the growth of Al-Qaeda would represent a danger both for the West and for Russia and Iran. Iran has a great influence in Iraq too and could, paradoxically, reveal itself as a precious ally for the West, in particular against the dangerous Sunni extremists of Al Qaeda, enemies both of Iran and the United States. Substantially, therefore, the abolition of sanctions against Iran would bring several important benefits to worldwide economics and politics, because sanctions have reduced its oil exports by up to 40%, even though, predictably, the political. A country that once it is newly legitimised to operate will be able to make its voice heard in the international community.


Elements of Convergence and Divergence in Russia-Iran Relations

Though the two countries need each other for political, strategic and economic reasons, their alliance also presents several critical elements. These are due to ideological differences and a mutual distrust, and to conflicting relations in the past, as the US politica analysis journal quoted above stresses: “Ideological differences, historical animosities and a lack of trust in each other’s commitments combine to make neither party fully comfortable relying on the other. Few Russian policymakers see Iran as Moscow’s natural strategic partner in the region. The perceived differences in concrete interests and ideology, as well as the two nations’ legacy of historical tensions, have been too great to make Russians fully comfortable allying with an Iranian regime that seems determined to minimize its dependence on Moscow even as it uses Russian-Iran ties to enhance Tehran’s tactical leverage vis-à-vis third parties.” The situation on the ground, even after the end of sanctions, though quite complex, remains very open-ended and in evolution.


The Regional Context

In 2014, the year ISAF troops leave Afghanistan, what role will Iran play in the stabilization of Afghanistan? And what measures will Russia take to protect its borders from the terrorist threat and from international drug trafficking? Iran thus plays a crucial role in the Post-Soviet space both regarding its relations with the Southern and Northern Caucasus and with the Caspian area, where it plays an equally essential role. Without counting those with the countries of Central Asia – Afghanistan in particular – which Russia considers crucial for its security against threats like terrorism and drug trafficking, which can reach Russian territory relatively easily from Central Asia. For this reason Moscow manages a military base in Tajikistan, with the task of supervising the Afghan border.

Moscow, therefore, particularly appreciates Iran's position of non-cooperation with the Taliban, in particular in view of the imminent withdrawal of ISAF forces from Afghanistan during 2014. The latter fact particularly worries the Russians because of the permeability of their borders in the Central-Asian area. The withdrawal of ISAF forces from Afghanistan will force both Iran and Russia into an intense cooperation to fill the political, legal and institutional void the event will create.

More particularly, both countries will be involved in a containment of terrorism towards bordering countries, the so-called spillover effect, and above all they will be involved in reinforcing their respective positions in Afghanistan, in particular with respect to a feasible use of the tormented Central Asian country as a passageway for oil pipelines.

However, a direct commitment of Russia in Afghanistan would necessarily be very cautious and gradual, considering the historical precedent of the 1979-1989 Soviet war in the country, an event that is still remembered vividly in both Russia and Afghanistan17 Though with different focuses and priorities, it is evident that both Russia and Iran are concerned about avoiding a propagation at a regional or international level of Sunni terrorism from Afghanistan, especially in Russian regions such as Dagestan, with a strong Sunni majority.

Considering the low birth rate among the Russian population, the growth of the Muslim population and its increasing radicalization can only be cause of concern for the government of Moscow. In any case, after the withdrawal of ISAF troops, cooperation between Russia and Iran will necessarily have to be strengthened in order to solve problems that may derive from an increase in Sunni terrorist or propaganda activities in Central Asia or in the Russian Northern Caucasus.

Issues that, as well as representing a danger for Russia, which has a Muslim population of around 20%, also represent a danger for Iran from the point of view of the balance of power, i.e. the fragile balance between Sunni and Shia forces within the Islamic world which Tehran is always trying to turn to its favour, thanks also to the acquisition of nuclear weapons.

Tehran, from Moscow's point of view, is important because it carefully keeps watch on the Persian Gulf, acting as a counterbalance against other states in the region (the Emirates of the Gulf) with close bonds to the United States. Without counting Turkey itself, a fundamental NATO country in the middle-eastern, Caucasian and Caspian areas, and in good relations with Azerbaijan, to which it is akin in terms of language and ethnicity.



Russia-Iran relations represent a key element of the more generic dynamics surrounding Iran and the Persian Gulf area as a whole. If the sanctions against Iran imposed by the US, the EU and the UN were abrogated, as has happened in mid-June 2014, the beneficial economic and political effects will be almost immediately perceivable at the regional and worldwide level, with new opportunities for Italy too in the industrial and energy fields. On the contrary, for Russia a too marked rapprochement between Iran and the West will be negative, because it will decrease its importance as an exporter of civil and military technology and as mediator between the Islamic Republic and the West.

Moreover, such a rapprochement will, in the mid to long-term, weaken a very important element of strategic interest between Russia and Iran, i.e. the attempt to prevent the deployment of US military bases along Russia's southern borders and Iran's northern ones, which include the Southern Caucasus and the Central-Asian states that were part of the Soviet Union until 1991, the so-called Southern Tier.


*Gregorio Baggiani is a contributor of "Il Mulino" - online edition- since 2009; scientific collaborator of the Professorship  of History of International  and Eastern Europe Relations at the University of "Roma Tre"; OSCE electoral observer for the Italian Foreign Office



DISCLAIMER: The views expressed in this article are the author’s own and do not necessarily reflect EPOS WorldView’s editorial policy

Last modified on Friday, 10 October 2014 07:27

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