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Growing Iran and Russia relations; new chapter unfolding

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The world has sanctioned Russia and Iran for several reasons and the one among dozens is Kremlin’s-orchestrated invasion of Ukraine, and Iran for supporting Moscow with drones and weapons. The effects of these sanctions are obviously gigantic, but at the same time paved the way for Tehran and Moscow to find some solution, though it is not easy due to the crippling stern sanctions. The only way to get some relief was to engage more and that’s why the more west widens the sanctions the more Russia and Iran gets closer.

Officials from both the countries are now paying working visits and promising new projects. The two capitals also consider increasing their annual trade to a minimum of $40 billion by 2025.

The significantly increased cooperation between the two countries will also encompass the financial and banking sector, oil, gas, petrochemicals, and nuclear energy. Furthermore, the two countries have agreed to conduct bilateral trade in their own currencies.

Russia to invest $4.5b in Iran oilfields

Russian investors and companies on October 31 said they have finalized a contract for developing seven oil and gas fields with Iran worth $4.5 billion dollars. Some projects have already made 7-35% physical progress.

Iranian Minister of Petroleum Javad Owji, who is in Moscow, said that at no time in history relations between Iran and Russia were so close and cordial. The two countries have realized the fact that they need to use this “golden opportunity” in the fields of energy, transportation, economy, industry, healthcare, banking, etc.

Highlighting US and EU sanctions on Russia due to its war in Ukraine, Owji said that Iran has been under sanctions for a long period of time, calling these sanctions as a good “opportunity to neutralize the sanctions with the help of two countries.”

Iran to export 40 gas turbines to Russia

Iran will export 40 homegrown gas turbines to Russia to help the country improve its economy. Iran, who is now capable of meeting 85% of its domestic needs for gas equipment and facilities, is making efforts now to help Russia. There is no immediate information when the turbine will be transferred, but the development came when the Russian energy giant Gazprom had to gradually reduce gas deliveries to Europe via the Nord Stream 1 pipeline due to technical problems related to servicing turbines. The company can’t do the maintenance due to sanctions as it needs some equipment.

One such turbine was supplied to Russia by the German company Siemens, but now it has been stuck in Canada as it was sent for maintenance purposes. However, Germany finally managed to get the turbine back, but it was yet to deliver to Russia as a result gas transportation stopped to Germany.

Russia said that Germany can get gas tomorrow if they get a new turbine, referring to a vital gas pipeline between Russia and Germany, however the West accused Russia of using gas supplies as a weapon.

16th meeting of the Joint Economic Commission of Iran and Russia

Iran’s ambassador to Russia, Kazem Jalali called the 16th meeting of the Joint Economic Commission of Iran and Russia a success where the two countries were able to establish close cooperation in the field of energy, investment in oil and gas fields.

The participants have agreed upon working and planning to further deepen relations in the face of existing tensions with the west. Iran has officially rejected the sanctions against Russia and Tehran repeatedly showed knees to develop trade and economic relations with Moscow.

One outlook is much clearer that Iran and Russia increased cooperation in the fields of security, politics, defense and military following sanctions, which is indeed in the best interest of both the countries in such a tense times.

Russia and Iran signed $40b memorandum of understanding

To further improve the ties and deal with economic hardship, the National Iranian Oil Company (NIOC) and Russia’s Gazprom inked a $40 billion memorandum of understanding (MoU) for oil and gas projects and technological cooperation. The deal includes the development of the Kish and North Pars gas fields, pressure enhancement of the South Pars field, development of six oil fields, gas and product swap, completion of LNG projects, construction of gas export pipelines, and other scientific and technological cooperation.

Russian President Vladimir Putin and Iran’s President Ebrahim Raisi hold a meeting in Tehran on July 19, 2022. SPUTNIK/AFP

The two countries are holding some of the world’s largest gas reserves at the same time, both are under strict sanctions.

In his July visit to Iran, Russia’s President Vladimir Putin met his Iranian counterpart Ebrahim Raisi and the country’s supreme leader Ayatollah Ali Khamenei, who also called for stronger long-term cooperation with Moscow.

Military cooperation in Ukraine war

For years there were many bold headlines in media outlets about the Russian air defense system heading to Iran, but now it is much in another direction as the world accused Iran of sending drones and weapons to Russia to use it in the Ukraine war.

Tehran has recently denied supplying Russia with weapons, but Kyiv and its Western partners accused Moscow of using Iranian-made drones in Ukraine. Iran rejected Kyiv claims and called the report based on political goals fueled by western sources. Iran has repeatedly declared that it is not a party to the war between Russia and Ukraine, and said it is ready to talk with Ukraine to remove misconception.

There are several news were doing rounds that Iranian-made drones, Shahed-136 and Mohajer-6, allegedly used in Ukraine by Russian forces that killed and wounded civilians.

Deepening relationship

Indeed, this deepening relation between Moscow and Tehran would have a positive impact for them, but they are both isolated and embattled by the west. Clearly the two countries became closer after they were abandoned and faced daily restrictions and sanctions.  Both are facing economic sanctions by the US and west – Russia for its war in Ukraine, and Iran for its nuclear program and human rights record.

Now Russia and Iran have made their way, and are trying to find a common ground to fight back US and west sanctions. But this is not an easy task for both the capitals. Apparently, Iran and Russia are somehow making efforts to find more partners in the regional countries. At the moment, Russia may get what it needs from Iran and in return Iran will get what it needs from Russia.

Middle East

Israeli envoy warns red line crossed over Turkish moves in Syria

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Israel’s Ambassador to the US, Yechiel Leiter, stated that Tel Aviv received clear intelligence showing Türkiye planned to expand its military presence in Syria significantly, an action Israel deemed the crossing of a “red line.”

Speaking to The Jerusalem Post, Leiter said: “We are not looking for an escalation or a war with either Türkiye or Syria. But a red line was crossed.”

His remarks follow an Israeli air strike on the Abu al-Duhur Airbase in Idlib, Syria, which drew swift criticism from both the Syrian and Turkish governments.

Leiter continued:

“This was seen as a blatant Turkish violation of the understandings. Those who needed access to the intelligence received it. Those who needed to know what was going to happen knew. We made it clear that this was contrary to our understandings, and that is why Israel acted as it did.”

According to Leiter, the failure to heed these warnings led Israel on Tuesday to strike the Abu al-Duhur airbase, where Turkish forces were allegedly expected to arrive.

Syrian officials stated that the airbase was targeted by at least eight strikes, whilst subsequently released satellite imagery revealed damage to the runways.

Leiter stated that the Turkish move contradicted understandings reached during the Biden administration between Israel and the administration of Syria’s new leader, Ahmed al-Sharaa, which “froze the existing situation” in the country.

According to Leiter, these understandings were reaffirmed during a meeting held in Paris in January 2026, attended by Syrian Foreign Minister Asaad al-Shaibani, US Special Envoy for Syria Tom Barrack, Leiter, then-National Security Council head Gil Reich, and Netanyahu’s military secretary Roman Gofman (now director of Mossad).

Leiter continued:

“This freeze means we do not act as long as the Turks do not act, and they do not force us to withdraw. It is also important to understand: whilst we maintain a security zone of only 78 square miles [approximately 202 square kilometres] in Syria, the Turks have, over the past few years, slowly annexed 3,500 square miles in northern Syria—roughly 5% of the country’s territory.”

According to The Jerusalem Post, with the exception of Tom Barrack, the US Special Envoy for Syria and Ambassador to Türkiye, senior US officials did not condemn the Israeli strike in Syria.

“The administration’s policy is that the previously agreed freeze should continue; that is why even Trump did not condemn the strike,” Leiter said.

Despite the tensions, Leiter emphasised Israel’s understanding that Syria is not seeking an escalation or war.

“It is clear to us that the Syrians do not want a confrontation with us. That is why we tell the Turks not to create conflict. There are multiple indications that the move planned by Türkiye was imposed on the Syrians,” the ambassador said.

Leiter argued that this apparent discord was also evident in the conflicting statements issued by Türkiye and Syria following the strike:

“Whilst Syrian Foreign Minister Shaibani acknowledged that a Turkish delegation was in Syria a few days before the strike, the Turks denied this. They need to resolve this matter between themselves.”

Leiter did not rule out a return to direct talks with Syria, as conducted in the past, but said conditions must be suitable.

“Negotiations can be resumed. We want to continue the face-to-face dialogue we previously conducted with the Syrians,” Leiter said.

Leiter added that Israel is not seeking a conflict with Türkiye and remains open to dialogue with Ankara.

“We are certainly open to dialogue with them, but judging by statements from senior officials in the country, they would prefer to wipe Israel off the map,” the Israeli diplomat said.

Alleging that Türkiye hosts Hamas leaders and “channels funds” to Hezbollah and Hamas, Leiter argued that it was inappropriate at this juncture for “Türkiye to begin expanding its influence in Lebanon and Syria.”

Leiter continued:

“Under current conditions, Türkiye cannot be a force that helps bring calm to the region. If only we could return to the state of relations between Jerusalem and Ankara from several decades ago. Back then, we would have been open to Türkiye’s influence in the region. But in an environment where Türkiye funds terrorist organisations, an increase in its regional influence makes no sense.”

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UAE halts trade with Iran after reported ballistic missile attack

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The United Arab Emirates (UAE) has suspended commercial and economic relations with Iran after announcing that Tehran launched two ballistic missiles towards the Gulf state on Tuesday.

The UAE Ministry of Defence stated that air defence systems detected two ballistic missiles launched from Iran towards its territory.

The incident is considered Tehran’s first direct attack targeting the Gulf country since May.

The event prompted emergency telephone alerts to be sent to residents across the UAE.

The Ministry of Defence stated that assessments indicated the missiles targeted maritime traffic, adding that one missile fell into the sea outside UAE territorial waters and the other landed within territorial waters.

The UAE Ministry of Foreign Affairs later announced that “in light of regional tensions that undermine regional and international peace and security, all trade, commercial relations, and financial transactions with Iran have been halted until further notice.”

Iran denied any involvement in the missile attacks. Iranian Foreign Ministry Spokesperson Esmail Baghaei said the claim “contradicts the principle of good neighbourliness and undermines ongoing efforts to strengthen trust among regional countries.”

The missile strikes occurred after a period in which the UAE and Tehran had sought to reduce tensions between the two countries.

The bulk of Tehran’s military retaliation targeted neighbouring Gulf states, which Iran accused of facilitating US-Israeli attacks.

The UAE bore the heaviest brunt of Iran’s attacks against US allies in the Gulf, sustaining nearly 3,000 missile and drone strikes.

Exhibiting the most hawkish stance against Tehran among its Gulf neighbours, the UAE responded with dozens of strikes against Iran.

However, tensions between the UAE and Iran eased following a memorandum of understanding signed between Washington and Tehran in June.

After the agreement began to unravel in early July, Iran largely redirected its attacks towards Bahrain, Kuwait, and Jordan.

In recent months, the UAE reactivated diplomatic and economic channels with Iran while simultaneously strengthening its military ties with Israel and the US.

Tuesday’s missile strikes threaten to disrupt the atmosphere of normalisation that had returned to the UAE.

While Dubai’s financial district was once again filling with bankers, certain commercial activities between the emirate and Iranian ports had resumed.

Furthermore, several Iranian flights to the UAE had quietly resumed.

UAE authorities had also begun permitting the return of approximately 20,000 Iranians holding UAE residency permits who were outside the country when the war began.

UAE officials have repeatedly emphasised that the country seeks to avoid being drawn further into a broader regional war.

Nevertheless, efforts to de-escalate tensions between the UAE and Iran have come under increasing strain in recent weeks.

This month, the UAE accused Iran of attacking vessels belonging to the Abu Dhabi National Oil Company in the Strait of Hormuz.

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US considers land blockade on Iran involving Türkiye and neighbours

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To date, the US has imposed sanctions on thousands of Iranian individuals and legal entities; however, the Tehran administration continues to bypass these restrictions by rapidly establishing new structures to replace those that have been blocked.

In an assessment citing expert opinions published by the Reuters news agency, the current situation was likened to a game of whack-a-mole.

Whack-a-mole is known as a game of agility and reflexes based on the concept of hitting plastic figures with a mallet as they pop up unexpectedly from their holes.

Speaking to the agency, experts outlined other options that Washington could deploy to increase pressure on Tehran and raise the efficacy of sanctions.

Potential measures include restrictions targeting independent Chinese refineries, known as “teapots,” which account for a quarter of China’s oil refining capacity.

China purchases more than 80% of the oil exported by Iran, and these refineries process the vast majority of those shipments. Nevertheless, these facilities have limited ties to the US financial system, rendering them partially protected against secondary sanctions.

Another option on the table is increasing pressure on major Chinese banks. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has applied secondary sanctions to small firms based in China and Hong Kong accused of executing billions of dollars in transactions for Iranian oil.

The agency has also warned two large banks, though it has not yet included them on its sanctions list.

While taking steps against major banks could deter other financial institutions, such actions carry the risk of Beijing enacting retaliatory measures. Washington seeks to avoid such tension ahead of a potential meeting between US President Donald Trump and Xi Jinping in September.

Experts are also evaluating the possibility of enforcing a land blockade with the participation of Iran’s neighbours: Iraq, Türkiye, Pakistan, Azerbaijan, Turkmenistan, and Armenia.

The Trump administration holds various leverage mechanisms against such nations, including Pakistan, which is requesting a $10 billion swap line, and Türkiye, which seeks to rejoin the F-35 program. Analysts express, however, that implementing such a blockade on the ground and generating the expected pressure inside Iran would be difficult.

Trump has repeatedly voiced threats to impose secondary tariffs on countries that trade with Iran; however, the US Supreme Court struck down the legal basis for such measures.

On the other hand, a anti-Russia “crushing” sanctions bill passed by the Senate includes new restrictions on Iran and grants Trump tariff authority.

This bill must also pass a vote in the House of Representatives; however, the text faces opposition from both Democrats and certain Republican lawmakers.

US Treasury Secretary Scott Bessent announced in mid-August that Trump would disclose new measures designed to raise Iran’s economic isolation to an unprecedented level.

Stating that the US President had instructed the re-establishment of the maximum economic pressure policy against Tehran, Bessent said, “We have moved from Epic Fury to Economic Fury.”

Following Bessent’s statements, Bloomberg noted that Tehran has learned to manage the consequences of a naval blockade and thousands of restrictions. According to the agency’s analysts, the principal obstacle facing Washington is the close economic relationship between Iran and China; indeed, Beijing secures more than 90% of Iranian oil exports. Sanctioning the entities facilitating these purchases would directly reduce Tehran’s oil revenues, yet the US is avoiding this step for now.

Maritime traffic in the Strait of Hormuz remains restricted. On August 11, Iran conveyed its conditions for lifting the blockade in the strait to the US through intermediaries.

Tehran’s conditions included an end to threats and military actions, the lifting of the blockade and sanctions, compensation for damages, and the release of frozen assets.

On August 14, Trump claimed that following the end of the war with Iran, he would declare the Strait of Hormuz to be US territory. Responding to these statements, the Iranian Foreign Ministry warned that the Strait of Hormuz could not be seized “by a tweet, an aircraft carrier, an executive order, or a campaign speech.”

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