Russia’s Iran Strategy

Another piece that I wrote for Oxford Analytica has been picked up (in edited form) by CNN. Here’s the repost.

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In response to Tehran’s announcement of advances in its civilian nuclear capabilities, the Russian Foreign Ministry on February 15 urged the international community to re-engage Iran in serious negotiations, with the aim of forestalling the development of a credible nuclear weapons program. While Russia is often portrayed as uncritically supportive of Iran, the bilateral relationship is more complicated than it appears.

Most Russian corporates have complied with international sanctions, which have made it difficult for multinationals to pursue opportunities in Iran. Large contracts have been repeatedly called off or postponed. Yet economic cooperation, especially in the civilian aviation, telecom and hydrocarbons sectors, remains significant.

While Iran used to be one of Russia’s leading defense industry customers, this relationship has almost completely collapsed in the wake of President Dmitry Medvedev’s September 2010 decision to ban sales of missile systems, armored vehicles, warplanes, helicopters and ships to Iran. This went beyond the U.N.-mandated sanctions. Since then, Russian military sales have been limited to equipment needed to modernize previously transferred anti-aircraft defense systems and electronic warfare and reconnaissance systems.

While bilateral ties have been periodically difficult, Moscow is well aware of Iran’s important geopolitical role – not just in the Middle East, but also Central Asia and the Caucasus. Russian leaders have long believed that protests such as the 2009 Green Movement could destabilize a great many states in Russia’s ‘south’, and this view has only been confirmed by the ‘Arab awakenings’. They also fear that an Israeli strike on Iran would be the first step in a regional conflict that could engulf the entire Middle East and generate massive refugee flows into Russia via Azerbaijan. At the same time, Russian policymakers are also concerned about the possibility of Iran creating instability on Russia’s southern border, especially in light of difficult relations between Iran and Azerbaijan.

Russian military planners recently announced that next autumn’s large-scale military exercise would take place in the Caucasus and involve the premise of a war that begins with an attack on Iran, but turns into a regional conflict that draws in Russia.

Russian leaders believe that Iran already has the technical ability and materials to build a nuclear weapon should it choose to do so. For this reason, it opposes the use of air strikes (or other military means) to damage the Iranian nuclear program. The logic is that while military strikes would certainly set back the program in the short term, they would only reinforce Iran’s determination to acquire a nuclear weapon in order to deter potential future attacks. From Russia’s perspective, negotiations are thus the only means to prevent Iran from developing a nuclear arsenal.

Russia would like to see a comprehensive agreement, whereby Tehran agrees to stop its nuclear weapons program in return for the end of sanctions and reintegration of Iran into the international community. Should Iran make the first aggressive move by following through on its threat to close the Strait of Hormuz, Russia will benefit in the short term from higher oil prices. However, this would be more than off-set by a subsequent intensification of regional instability. Over the longer term, Russia would be best served by stable oil prices, not extremely high ones.