TSG IntelBrief: Russia-Iran Relations: Portrait of Mutual and Competing Interests
December 9, 2013

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 Russia will continue to have significant influence over a final nuclear settlement between Iran and the international community

• Although Russia wants to ensure that Iran remains a non-nuclear armed state, Russia and Iran remain strongly aligned on regional issues, particularly Syria

• Both Russia and Iran also seek to roll back the extensive US military and strategic presence in the Middle East and Central Asia region

• Russia does not want Iran to rapidly recover from sanctions that have diminished its competitiveness with Russia in both the energy market and regional influence

• Russia also seeks to block Iran from exerting leverage in Russia’s “sphere of influence” in the Caucasus and Central Asia.
 
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Russia-Iran Common Interests

As of early December 2013, Russia has emerged as a pivotal player in the US-led effort to check Iran’s nuclear ambitions. Russia has won Iran’s trust over a number of years, through efforts that include trying to remove some of the harshest provisions from the major 2010 UN Security Council Resolution 1929 that sanctioned Iran for its nuclear program. Since 2011, Russia and Iran have moved strategically closer by supporting, with funds, arms, and training, the government of President Bashar al-Assad against an armed rebellion in Syria. Iran views the Assad regime as a major strategic ally. Russia, for its part, has had a historic strategic relationship with the Assad regime since the rule of Bashar’s father and predecessor, Hafez. Iran has appreciated Russia’s moderate role in the Security Council deliberations on Iran, and was particularly supportive of Russia’s recent role in brokering a diplomatic solution following accusations of Syria’s use of chemical weapons in August 2013—a diplomatic solution that prevented a US military strike on al-Assad’s regime. That diplomatic solution was welcomed by the Obama Administration as a way out of a policy dilemma involving the risks of a military strike and a possible vote against a strike by the US Congress.

Russia and Iran share common interests beyond the preservation of the Assad regime. They share, first and foremost, the goal of limiting US influence in the Middle East, the Caucasus, and Central Asia. Both Russia and Iran view US policy as aggressive in these regions, and part of a US effort to perpetuate its singular superpower status and global hegemony. Russia considers the Caucasus and Central Asia—which consist of states that were part of the former Soviet Union—as its “sphere of influence.” Russia has resented the close US relationship with Azerbaijan, and the US use of military facilities in Kyrgyzstan and Uzbekistan, in particular, as part of a US effort to encircle Russia. This perception was bolstered by the US effort to expand the NATO alliance to Russia’s border. Iran similarly fears US encirclement and has worked—unsuccessfully to date—to undermine the US signing of strategic framework agreements with Iraq and with Afghanistan. Iran took such a position even though US military intervention in those countries removed Iranian enemies Saddam Hussein and the Taliban.  

Both Iran and Russia support Armenia as a counterweight to the US strategic alliance with Azerbaijan, despite the fact that Azerbaijani are majority Shi’a. Russia and Iran have consistently singled out Saudi Arabia as the birthplace of radical Sunni Muslim terrorism exemplified by al-Qaeda, which sees its most implacable foe in Shi’a Muslims. Russia has criticized Saudi support for Islamic revival in the Central Asian states while praising Iran for restraint on that issue. Iran and Saudi Arabia are competing intensively for influence in the Middle East. Russia has suffered attacks by radical Sunni terrorism largely inspired by conflict in Chechnya.

It is these common interests that have led Russia and China to grant Iran “observer status” in the Shanghai Cooperation Organization (SCO), a grouping of Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. One month after his August 2013 inauguration as Iran’s new president, Hassan Rouhani attended an SCO meeting in Bishkek, Kyrgyzstan and met there with Russian President Vladimir Putin. Russia has resisted Iran’s entreaties for full SCO membership on the grounds that Iran is under international sanctions. Fundamentally, Russia reportedly does not want the SCO to be perceived as an alliance of authoritarian, anti-US states.

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Arms Supply Relationship

Russia’s arms and nuclear industries have benefited from Russia’s relationship with Iran. In the early 1990s, Russia sold Iran a major package of arms, including tanks, MiG and Sukhoi combat aircraft, and two Kilo-class submarines. In 1995, Russia contracted to complete the unfinished nuclear power reactor at Bushehr. That contract, initially valued at nearly $1 billion, has generated substantial ongoing fees in the form of Russian supervision, training, and provision of nuclear fuel. Russia did not see Bushehr as of proliferation concern because of its insistence on reprocessing all spent nuclear fuel. The US saw the project as giving Iran the knowledge to expand its nuclear program into more worrisome areas such as uranium enrichment.    

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Russian Concerns About Iran

There are also issues that divide Russia and Iran, and explain why Russia has voted for all UN Security Council resolutions that have sanctioned Iran for its uranium enrichment program. Russian concerns about Iran also explain why Russia has responded to US pressure and voided the 2007 sale to Iran of the S-300 air defense system. Russia also has proceeded much slower than expected in constructing the Bushehr reactor, apparently to signal Iran to suspend uranium enrichment.    

Russia does not want another strong power in or near its sphere of influence. Russia has expressed substantial fears about Pakistan’s nuclear weaponry and its potential to fall into the hands of radical Islamists. Russia has similar fears should Iran become a nuclear-armed state. Russia also worries that a nuclear-armed Iran would be a far more attractive and formidable competitor for influence among the Muslim states of the former Soviet Union than Iran is now. Russian policy has been to keep the states of the Caucasus and Central Asia as dependent on Russia for protection as possible, and it does not want a strong Iran undermining that Russian effort.

Russian firms have also apparently ceased supporting Iran’s ballistic missile program. Iran’s missile programs compelled several former Warsaw Pact states to agree to host missile interceptor components—incurring sharp Russian opposition. Russia seeks to ease Western concerns about Iran’s missiles in order to thwart missile defense plans that Russia believes undercut Russia’s own strategic deterrent.  

Russia’s role as an energy supplier is also a major factor in Russian policy toward Iran. As oil exporters and large holders of natural gas reserves, Iran and Russia are natural competitors. A prosperous Iran would have the financial resources to challenge Russia’s sphere of influence. Russia-supported UN sanctions on Iran not only work to prevent Iran from becoming a nuclear-armed state, but also to marginalize Iran in the global energy market. Russia publicly criticized US unilateral sanctions that sharply reduced Iran’s oil exports to 1 million barrels per day (from 2.5 mbd in 2011), but it has been quietly pleased that Iran’s falling exports have kept oil prices high at a time of greatly increased US and Iraqi oil production. Russia has also been helped considerably by US sanctions such as the Iran Sanctions Act that has deterred major international energy firms from exploring for oil and gas in Iran and thereby bringing new supplies to the market.    

Russia and Iran are also on opposite sides in the regional struggle for control over energy routes. The US has supported routes that involve neither Iran nor Russia, but Iran’s marginalization has narrowed the alternatives and left Russia in a stronger position to determine eventual export routes. Still, both countries are involved as investors in most of the oil and natural gas projects in the Caspian Sea.

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• Russia will likely play a pivotal role as a negotiator of a final status agreement on Iran’s nuclear program

• Russia will continue to work closely with Iran on regional issues in their mutual interest, such as supporting the Assad regime in Syria

• However, Russia will continue to try to keep Iran’s role in the Caucasus and Central Asia limited, both strategically and economically

• If international sanctions on Iran are lifted, Russia will likely resume sales of major combat systems to Iran, but will not provide Iran with any weaponry that would enable Iran to project substantial power in the Caspian Sea or Central Asia.

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