Russia – Iran: Putin’s visit to Tehran could become prerequisite for breakthrough

Less than two weeks after Iran’s nuclear deal, firm conclusions are grabbing headlines. Perhaps, it is a result of long months of expectations from the years-long marathon talks called “nuclear talks with Iran.” Meantime, loud epithets addressed to the deal achieved in Vienna and harsh criticism by well-known Middle East rivals of Iran are far from reality. It is extremely unreasonable to speak of both “a historical success” or “a historical mistake” until the nuclear deal is implemented.

What we have now is a preliminary result which even the signatory-states have not understood thoroughly. The Vienna deal is a typical model of the international enactments that undergo extremely politicized process of elaboration. Only implementation of this agreement will unveil the true interests and power balance of not only P5+1 mediators, but also the entire Middle East.

The praising comments on the 100-page document and several enclosures to it – part of them are strongly confidential and concern only Iran and IAEA - are ahead of the curve. There is no true breakthrough in the relations of the West and Iran so far. There are prerequisites to it, preliminary agreements, declarations of intentions, but no breakthrough. We are witnessing a race of P5+1 for Iran’s favoritism. German Deputy Chancellor and Minister for Economy and Energy Sigmar Gabriel travelled on a three-day (!) visit to Tehran. A delegation of the French government is expected to visit Iran too.  If the warmth in the relations of the West and Iran continues, top officials from Washington may visit Tehran too.

Meanwhile, we need to focus on the prospects of the Russia-Iran relations in the new conditions when preparations are underway to launch the provisions of the Vienna agreement. Russia was not on a leading position in the nuclear talks with Iran just because Moscow and Tehran had no disagreements over any regional and international issue. Yet, it is hard to overestimate Russia’s efforts towards achievement of the deal, as Moscow supported the formula of gradual and mutual efforts to settle the problems around Tehran’s nuclear program. What depends on Russia now is the successful implementation of the nuclear deal.

Why? At least, because Iran’s civil nuclear program can be implemented only with the support of Russia. The Bushehr NPP is put into operation. Moscow and Tehran are keen to build new nuclear power capacities and have already made preliminary arrangements concerning it. In addition, due to the geographic location of Russia and, maybe, because Iran trusts Russia more than the other five super powers, the problems with Iran’s so-called “surplus” enriched uranium will be settled with Russia’s active participation.

Russia will not have high return from implementation of the Vienna deal due to some objective reasons. Here is one of those reasons – Iran looks to restore equal relations with national and international fiscal institutions. As the West dominates on the global financial market, it decides whether to give Iran access to such benefit of the global financial system as, for instance, SWIFT system of international e-payments. Iran was denied access to the SWIFT system at the beginning of 2012, and the country’s economy has occurred on the verge of collapse. What Iran cares most now is to regain access to the SWIFT, not to bring as much oil to the market as it did before the sanctions – 2.5 million barrels daily.

It is only one example of how the West can gain Iran’s disposition. Iran extremely needs foreign investments and high technologies for its industrial sectors – nearly 50 oil and gas projects for $185 billion need foreign investments and industrial technologies of Western energy corporations.

The sanctions-induced losses and the lost benefits of Iran have led to what many authoritative world media call “astronomic” losses for Iran’s so-called “common resistance against economic sanctions.” For instance, Bloomberg said Iran has been losing an estimated$133 million per day in the oil sector because of the sanctions. In 2011, Iran received nearly $100 billion from export of oil, but in 2013, it received only $35 billion.

Considering that Iran’s frozen billions are on the accounts of American and European banks, not the Russian ones, everything becomes more than clear.

Moscow has always had its own interests, which it had to sacrifice at the final round of talks in Vienna, but it has no intention to abandon them finally. When Iran gets rid of the international sanctions, Russia will have an opportunity to make impressive arms deals in the market of that Middle East country. Only Russia could manage to launch a number of projects in the military and technical field, meet the need of the Iranian client in advanced defensive systems from the six super powers. Russia’s experience in the military-technical cooperation with Iranian partners did not avoid failures, but the bilateral cooperation in the field is solid. (1)

The United States cannot meet Iran’s demand for weapons, as it has special treaties in the field with Israel. Germany is in a similar situation due to its post-war commitments to improve the defense capabilities of Israel. Great Britain and France have less restricting factors, but these countries prioritize the military technical cooperation with Arab monarchies of the Persian Gulf that, to put it mildly, will not be happy if Paris and London start supplying weapons to the Iranian market. Meantime, China may become a potential opponent of the Russian producers and exporters of military products to Iran. However, most of China’s export oriented military products is a “copy” of the Russian models and Iran is well aware of that.

Russia has good starting positions not only in the field of military-technical cooperation with Iran. However, it was the very field where Russia could make specific agreements and enter the promising market of Iran immediately after the UN Security Council lifted the sanction from Iran. Unfortunately, Russia did not succeed in it. Moscow’s idea to lift the arms embargo from Iran immediately or within a short period of time was not welcomed at the talks in Vienna. It is interesting that Iran did not insist on this component of the days-long talks in the Austrian capital, and eventually, agreed on a 5-year term of lifting the embargo on supply of advanced arms and military equipment to it. The reservation that some types of weapons may be supplied to Iran before the expiry of the “five-year ban” after the country undergoes the procedures of notification and verification by the UN Security Council offered cold comfort to Russia. However, considering the current and future relations of the West and Russia, it is not hard to guess what “surprises” Moscow may face with every such procedure at the UN Security Council.  On the first days after the Vienna deal of July 14, Russia received bad news – delivery of S-300 Russian missile systems were not included in the UN Security Council’s Resolutions 2231 dating back July 20. Iran's Deputy Foreign Minister for Legal and International Affairs, Dr. Seyed Abbas Araghchi, said the purchase of S-300 systems is not within the jurisdiction of the latest resolution of the UN Security Council. He explained that the resolution contains several restrictions, but nothing concerns the supply of S-300 systems.

Yet, it’s not all that simple here. The Iranian buyer demonstrates a keen interest in termination of that long-suffering deal for supply of S-300 missile systems, at the same time demanding supply of at least one set of the air defense system before Tehran finally recalls the lawsuit it filed to the international arbitration against Russia over failed contract in 2010. Russia suggests Iran to buy a set of defense systems, as it hopes defensive weapons will be verified by the UN Security Council. Russia says it is expedient for Iran to buy long-, medium-, and long-range systems and related airspace control radars. (2)

Meanwhile, delivery of the advanced models of the Russian weapons and military equipment is still alarming for the Shia country’s rivals in the region irrespective of whether it is defensive or offensive weapons. The United States cunningly uses these sentiments of Israel, Saudi Arabia, UAE, and maybe, Turkey and Egypt. These countries of the Middle East region do not want Iran to have advanced air defense systems. They blame Iran for too big ambitions in the region and its intention to buy advanced military equipment and weapons from Russia.

Considering the problems Russia may face when trying to gain foothold in the arms market of Iran, it is necessary to understand once and forever that arms supplies – no matter how large-scale they are – are not enough to achieve a new level of relations between Moscow and Tehran in the post-sanction period. So far, they are speaking of S-300, supply of bigger volumes of Iranian oil to the world market and the slump of the oil price it will result in. Reportedly, Iran may buy civil aircrafts and more technological and engineering equipment made in Russia. All this narrows down the field of the Russian-Iranian cooperation, commercializes the issue, stripping the important geopolitical basis of the two countries’ natural partnership. For the time being, the economy of the relations of Moscow and Tehran is maybe important as never before. The decline of mutual trade over the last years of the West’s sanctions against Russia proved too sensitive for the two countries not to think to restore their erstwhile cooperation. (3)

Yet, Russia and Iran are connected with much more large-scale tasks of vital importance for them in the regions of the Caucasus, Central Asia, and Middle East. The Islamic States is expanding the war from Syria onto Turkey, though a few weeks ago, it was unlikely for Istanbul to face the threat of Jihad in its territory. It turns out that no country in the Middle East, including Iran, is safeguarded against internal shocks directed from outside.

Many analysts are yet to understand several layers of the game the United States and the West are playing in the Middle East. Barack Obama uses the nuclear deal as part of its foreign policy propaganda that retouches a deeper sense. The Vienna deal has resulted in the domestic policy ferment in Iran where the local conservatives and reformers have different stands on the nuclear deal. A question arises: what will Tehran face when the agreement is implemented, if its signing has already irritated the military and political circles of Iran, the commanders of the Islamic Revolutionary Guard Corps supporting the country’s missile program.  Will it split the Iranian public into the young generation that supports the nuclear deal and the old one that experienced the hardships of the Iranian-Iraqi war of 1980s and other nation-wide challenges? Maybe, it will lead to a new level of internal consolidation that will let Iran overcome the transitional period with fewer losses for the political regime and the public peace. The latter is not in favor of all the six international broker-countries. So far, the United States, Great Britain, Russia and China are ready to accept Iran the way it is now.

The nuclear deal is not just a big economic opportunity for Iran. It is also a political challenge which is hardly possible to meet without Russia’s support. Perhaps, it is high time for Iran to think of its political rear inside the country and start a close dialogue with Russia – the country considers Iran the only partner in many regional problems – on a number of combined actions in the Caucasus, Central Asia, and in the Greater Middle East. Only afterwards, Iran can afford trade and investments of the West, the more so as the political consequences of that partnership is not that clear for the political regime of Iran. In this light, a visit of Russian President Vladimir Putin to Iran by the end of the year would be natural for a breakthrough in the Russian-Iranian relations.

(1) Despite its regress in the bilateral trade and economic cooperation for 2000-2007, Iran was still among top three consumers of Russia’s weapons – it made deals for $1.96 billion in the given period. Russia accounted for 85% of Iran’s total military import for 2000-2007.

(2) By some data, if the arms embargo against Iran is lifted, the military and trade cooperation of the two countries may reach 5 billion dollars. It may seem an exaggerated forecast, but it does not preclude the billion-strong arms deals of Russia and Iran in future. At the same time, it is necessary to assess the situation soberly. In visible future, Iran will not be able to reach Moscow’s two key military partners: in 2014 China and India bought arms and military equipment for $2.3 billion and $1.7 billion from Russia.

(3) Reportedly, the annual trade turnover of Russia and Iran is growing and will reach $10 billion from the current $1.5 billion in 2020. Russia seeks to increase export of grain and vegetable oil, cars and equipment, as well as rolled ferrous metal products to Iran within the coming 5 years.  Import of fruits and vegetables, construction materials (cement, natural trip stone), oil and chemical products from Iran will be increased too. In 2010, the trade turnover of the two countries totaled $3.65 billion – a 19.6% more than in 2009. Since 2010, the Russian –Iranian trade has been shrinking year by year. For instance, export of the Russian cars and equipment fell tangibly.

EADaily analysis