Wednesday, 15 July 2015

Russia And The Iran Nuclear Deal, by Kanak Gokarn

Russia And The Iran Nuclear Deal, by Kanak Gokarn  July 15, 2015  
After a number of missed deadlines, finally a deal has been reached between the P5+1 members and Iran. The deal would curtail Iran’s enrichment capabilities for the next decade while allowing it to pursue its civilian nuclear program. In exchange, the sanctions that have been putting a heavy burden on Iran’s economy will be lifted. While the deal is a small step towards overcoming decades of tensions between Iran and the United States, the role played by other mediators, such as Russia, cannot be discounted.
Ties between Russia and Iran go far back, to the Persian Empire and the Grand Duchy of Moscow. Their relations have not always been friendly and have fluctuated considerably. Periods of peace and prosperity were interspersed with a series of wars; as a consequence, the North Caucasus is now a part of Russia. Armenia, Georgia and Azerbaijan were a part of the Persian Empire as well. Even in recent history, the relations between the two countries have wavered. The USSR was the first to recognize the Islamic Republic of Iran, but was also one of Iraq’s largest arms suppliers during the Iran-Iraq War, according to SIPRI. The relationship has evolved from one where the USSR saw Iran as a way to exert its influence in the Middle East, to one where Moscow and Tehran are on a more equal footing.
Russia has in the last several years attempted to nurture closer ties with Iran in the face of isolation by the West, and it believes an Iran unburdened by Western sanctions is in Russia’s interests and useful for maintaining stability in the region. Russia would prefer an Iran without nuclear weapons, as southern Russian territory would be within their range. However, a nuclear-armed Iran is not a “nightmare scenario” for Moscow as it is for Washington, says Steven Pifer, a senior fellow at Brookings. In addition, Foreign Minister Sergei Lavrov, in his speech given after the deal was reached, mentioned the strategic benefit of a nuclear weapon-free Iran- it would negate the need for a missile defence system in Eastern Europe. Russia has claimed that this system, which was intended to counter possible Iranian missiles, would affect their own deterrent capabilities. He has also been critical of using pressure tactics to get Iran to concede and has been supportive* of a diplomatic solution that allows Iran to determine its own path.
Russia and Iran have both at times been at odds with the West and the former has spoken out against the “unipolar” world that has been created. Russian President Vladimir Putin has stated that he believes in a nation’s right to sovereignty and decries the West’s use of punitive measures against other countries. Moscow has reached out to and has deepened ties with growing non-Western economies, most notably China, in an effort to counter the growing distance between it and the West. Iran is a likely ally in this regard. Russia, and other members of the newly established Eurasian Economic Union (EAEU) such as Armenia have called for the inclusion of Iran as a member. Iran’s application for member status of the Shanghai Cooperation Organisation (SCO) was blocked in 2010 because of UN sanctions. However, it seems increasingly likely that it will be granted member status after the sanctions are lifted. There is also scope for cooperation in other energy sectors through the Gas Exporting Countries Forum, where Russia and Iran, along with Qatar, possess the largest reserves of natural gas.
Russia, as current chair of BRICS, is an advocate of institutionalising the group and for it to have a greater role in global governance. China and Russia are both members of the P5+1 group negotiating with Iran and are opposed to sanctions in general. In 2012, the BRICS countries agreed to abide by UNSC sanctions but agreed that they were not bound by sanctions imposed by other countries. India and China are two of the largest importers of Iranian oil, and India has increased its imports once again. In 2013, the countries signed a declaration that reaffirmed their support of the resolution of the problem with Iran’s nuclear program through “political and diplomatic means”. Relations between Iran and Brazil, and Iran and South Africa are also cordial. With the growing importance of the group itself, and with its Russia’s influence within it, it can facilitate greater cooperation with Iran.
Opening up the Iranian economy to the world will also create a new market for Russian weapons and nuclear technology. There is the case of the S-300 anti-aircraft missile system, the sale of which was banned back in 2010. That ban was recently lifted, and some consider it to be a symbolic gesture to Iran to show that Russia is willing to cooperate. Iran will be in greater need of defensive weapons, and lacking a nuclear deterrent it will have to build its military capabilities in other ways. The two countries also recently announced an “oil-for-goods” deal that would allow Iran to sell oil through Russia, which could even make its way into Europe through the Turkish Stream pipeline. There is talk of it providing assistance in the nuclear energy sector, an area that Russia would do well to promote as an alternative to acquiring weapons. Establishing early ties with Tehran would give it an advantage over American or European firms.
However, the possible lifting of sanctions, especially those affecting oil exports, has raised concerns about a further drop in oil prices. Russia’s break-even oil price is $98 per barrel, and prices are currently hovering around the $60 per barrel range. Russia’s economy is already feeling the effects of low prices. There is an added burden from the sanctions that have been imposed on its banks, energy and arms sectors following the Ukraine crisis. Lower prices will hurt the economy, but it the benefits of having Iran as a committed, stable partner in the region outweigh the loss of revenue.
Iran and Russia’s links to the Middle East are equally important. They support the same side in the Syrian conflict, a fact that has no doubt built some goodwill between the two nations, and all countries in the negotiations are united in their campaign against ISIL. What is interesting for Russia is how greater cooperation with Iran will affect its ties with other Middle Eastern nations such as Israel, which has been a vocal opponent of a nuclear deal with Iran. Israel however does not occupy a special position in Russia’s foreign relations as it does for the United States. Moscow and Tel Aviv’s close relationship is unlikely to be affected by this deal, although Iran getting Russian missiles has been a cause of worry for Israel. The S-300 is a defensive system, so Russia will likely be more realistic about their apprehensions.
Russia and the other major player in the region, Saudi Arabia, have not been particularly close. Iran and Saudi Arabia are opposed on a number of issues, primarily religion and their dominance in the region. The Yemen conflict between a local Zaidi Shiite uprising and Shafi’i Sunnis has been frame as a proxy war between the two. Iran and Russia are also at odds with Saudi Arabia in the conflict in Syria and Iraq. Moscow’s closeness with Tehran has aggravated tensions with the Saudis, but recently there have been shows of increased cooperation between the two. A number of agreements have been signed between the two countries, most notably a deal to invest $10 billion in Russian sectors such as agriculture, retail and transport. In return, Russia has agreed to cooperate with the Saudis in the nuclear energy sector. By aiming to increase bilateral cooperation and maintaining cordial relationships between two ideologically opposed nations, Russia can improve its standing in the international arena by mediating between them should the need arise, a role it played during the negotiations over Syria’s chemical weapons, and in these negotiations as well.
In all, if the deal goes through, Russia is likely to lose some in concrete terms such as oil sales but gains a valuable ally willing to cooperate with it and other countries on regional issues. Although relations between the United States and Iran will no doubt improve, one deal will not be enough to undo decades of mistrust. Iran also provides a new market for Russian defence equipment and its influence in the region will go a long way in stabilizing it. Russia’s policy of building closer ties to countries such as China and Iran can be useful at a time when its ties with the West are at a new low. It can use the building of closer, more equitable ties with regional powers as a platform to improve its position and credibility in international affairs.
*Kanak Gokarn is a Research Intern at Observer Research Foundation, Delhi

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