Russia - Iran: risks and prospects

President Putin's visit to Iran ended November 1st had two key planes, the geopolitical and economic one. Both of them are interrelated, however, they have their direct objects, too. If politically the relations of Moscow and Tehran should be considered, first of all, in the context of the situation in Syria and Iraq and counteracting to the American policy, then economically the cooperation is sooner directed to the East, regarding Pakistan, India and China.
The key geopolitical aspect of the Russian-Iranian interaction is strengthening positions of Moscow and Tehran in the “Greater Middle East” (using the popular American term), as well as settlement of regional crises. For Russia, it is more Syria and to a smaller extent, Iraq. For Iran, besides the above countries, the situations in Yemen and Bahrain are also important as it is in a state of indirect war with Saudi Arabia and its allies under the Cooperation Council for the Arab States of the Gulf (CCASG).
In his speech about the Russian-Iranian interaction in the Syrian crisis, IRI president Hassan Rouhani specially underlined the fact of this format’s extending through Turkey inclusion. “It is very pleasant that, besides promoting bi-party relations, our countries play an important role in peacemaking and stability raising process in the region. One of the consequences of such relations is destruction of one of the most dangerous terrorist organizations. Three-party Corporation in the format of Russia — Iran — Turkey is an evidence that Syria is coming back to peace and stability”, the Iranian president said. (kremlin.ru)
Many Western mass media are even more open commencing Vladimir Putin's visit to Iran. “War in Syria has two-and-a-half winners: Russians under President Putin's command, Iranians supervised by Hassan Rouhani and, as a half, Bashar Assad, head of Syria,” German Die Welt writes. [welt.de]
Of course, we can argue with the German edition as to the mathematics of War, but what is undoubted is the decisive role of Russia and Iran in defeating ISIS and other terrorist organizations in Syria, as well as the political influence of Turkey in the format of Astana settlement.
Turkey did not participate in the Russian-Iranian negotiations in Tehran, however its indirect representative is Azerbaijani President Ilham Aliyev who participated in a three party summit with his colleagues Vladimir Putin and Hassan Rouhani. “Besides the issues of economic cooperation, we talked about regional cooperation, three-party cooperation between Iran, Russia and Turkey in this sphere,” the Iranian president commented on the results of three-party negotiations: “All three countries confirmed a necessity of regional stability, fight on terrorism, struggle on distribution of narcotic drugs and organized crime.” (kremlin.ru)
“The three-party cooperation is absolutely natural, as our people are linked with common history and geography. For centuries our people we're in a close link with each other. A format of three-party cooperation means a lot for the regional security. I think that our successful cooperation plays a big role in providing security and stability in the region,” Ilham Aliyev said in his turn.
Still, when talking about improvements in Russian and Iranian cooperation, we must bear in mind the difference of interests and aims of Moscow and Tehran. The Iranian party considers such a cooperation, first of all, the military and political one, as a means of raising its own positions in the region, as well as a way to put pressure on the USA, including the russian-american controversies. The Supreme leader of Iran Ayatollah Ali Khamenei called to Moscow and Tehran to coordinate their actions in the international arena, in order to “isolate USA”. “Final settlement of the Syrian crisis requires better cooperation between Iran and Russia. As a result, we can isolate America and recover stability in the region,” Ali Khamenei said. (rbc.ru)
It seems that such approach and targets are not fully compatible with a wider and deeper character of external political interests of Russia. For Moscow here it is important to retain the balance between trying to deepen cooperation with Tehran and considering its other partners’ interests, both in the Middle East region and the Persian Gulf, as well as in Europe. In this relation, a very important subject was raised during a telephone call of Russian and French presidents Vladimir Putin and Emmanuel Macron that was initiated by the French party on the next day after Russian-Iranian negotiations ended. During this communication both countries leaders “made declarations in favor of a clearer implementation of the Joint comprehensive plan of actions on the Iranian nuclear program situation settlement” as well as underlined that “this important agreement cannot be reviewed unilaterally,” what US President Donald Trump calls to. (kremlin.ru)
The economic part of Vladimir Putin's visit to Tehran isn't less important. Russian companies Gazprom and Rosneft participating in the Russian-Iranian talks also reached preliminary agreements on multi-billion contracts. Russian Energy Minister Alexander Novak said that Russia and Iran are ready to sign a memorandum of understanding that would be a basis for Gazprom starting to build a segment of a pipeline from Iran to India 1200 km long, with part of its pipeline going through the Persian Gulf bottom. In the framework of a respective project “the gas fields situated in Tehran will be explored with Gazprom’s participation, as well as respective infrastructure will be created to supply gas to India,” Alexander Novak said. He says that Gazprom could start building this pipeline in 2019, together with its Partners from India and Pakistan, and one of the possible routes presumes the pipeline going through the central regions of Pakistan. (vedomosti.ru)
In case this project is implemented, the total length of gas pipeline can run into 2100 km, and its capacity will be 22 billion square meters per year followed by further increasing. The resource of this project will be Iranian offshore gas fields in the northern part of the Persian Gulf, including Farzad-A, Farzad-B, Kish and North Pars.
Construction of a gas axis of Russia, Iran, Pakistan and India is a factor that goes beyond the borders of Western and Central Asia. Moscow and Tehran are in fact guarantors and guides for relations of the other two nuclear powers, that had multiple war incidents in the 20th century and still have very strained relations. Pakistan traditionally accuses Moscow of increasing its military cooperation with New Delhi. India is really one of the key partners of Russia in the technical and military sphere. In 2016 this country ranked first in the amount of Russian weapons imports with supplies performed for 1.2 billion dollars, significantly overpassing China, Algiers and Vietnam. In this context, the future pipeline will inevitably become a factor of possible relations improvement between these two countries. (rbc.ru)
Thus, energy cooperation and building a gas “bridge” from Iran through Pakistan to India is capable to fix the disbalance that Islamabad is worried by.
Rosneft also has very serious plans in Iran and in the region to the east of it. During the presidential delegation's visit to Tehran, company’s representatives signed a “road map” of two-party cooperation with National Iranian Oil Company (NIOC) that presumes cooperation in order to implement joint projects for a total cost of about 30 billion dollars. Rosneft CEO Igor Sechin says that his company will help Iran to increase its own oil exploration by 55 million tons per year, that is 25% of the current level (216,4 million tons in 2016). The agreement signed creates “a platform for strategic cooperation”, and within a year the parties can sign several documents to implement particular projects, Igor Sechin says. (rbc.ru)
Development of cooperation between Russia and Iran in the sphere of oil exploration also plays a very important role for the region. In accordance with the information we have, the Iranian oil can go directly to the oil refinery in Vadinar, the Indian port on the shore of Arabian Sea that Rosneft has recently acquired, another source of oil for this refinery will probably be Venezuelan oil under the contract with PDVSA.
It's clear that the major energy resource exporters, Russia and Iran, “are interested in increasing cooperation in this sphere, especially considering the fact that both countries are under sanctions regime of the USA and EU,” Mohammad Marandi, Tehran University expert says. He thinks that the two-party cooperation potential between Moscow and Iran in this fear is big in this sphere: “We can do a lot in the sphere of Iranian oil and gas industry.” besides that, before Summit integran on October 31st the country officially started construction of the second power block of Bushehr Nuclear Power Plant together with Rosatom, a major Russian state-owned corporation. (rbc.ru)
However, there could be risks in the economic sphere of cooperation with Iran. First, US President Donald Trump said that his country would go out from the international agreement on Iranian nuclear program, even if its other participants refused to amend the document parameters to include Washington's new requirements. This fact will actually mean a comeback of anti-Iranian sanctions imposed by the USA that will also spread to the countries and companies that continued cooperation with Tehran.
Second, when developing relations with Iran, including the ones in the sphere of economics and commerce, for Russia it is important not to push away the countries of the Persian Gulf showing a growing interest for cooperation, such as Saudi Arabia, Qatar (that argues Iran's right to a number of offshore oil fields) and United Arab Emirates.
 Presently Moscow has a unique opportunity to improve relations both with Tehran and with Riyadh, as well as other countries of CCASG considering the controversy existing among them. Such a situation can bring additional dividends to Russia, both political and financial ones.