Growing Iran and Russia relations; new chapter unfolding

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.