Russia and Iran: What next for the world’s most-sanctioned states?

During last week’s visit by Russian Deputy Prime Minister Alexander Novak to Tehran, Russian and Iranian officials signed three memorandums of understanding to increase collaboration in the fields of banking and energy. They agreed to use their national currencies for energy and trade payments. They also agreed that Iran would be able to export petrochemicals and technical and engineering services to Russia, with the involvement of homegrown technology related to catalyst manufacturing, and that Tehran would be able to use Russian territory to conduct deliveries of natural gas to other states.
As noted by one of the speakers at the recent Gulf International Forum’s panel discussing the implications of the Ukraine war on Russia-Iran relations, these states are currently the two most-sanctioned countries in the world. The question is then, to what extent does this status contribute to any further collaboration between them and to what extent will the outcome of the Ukraine conflict shape these relations?
The sanctions against Russia introduced by Western states this year have contributed to slowing down the process of signing a renewed Iran nuclear deal, which was expected to be concluded at the beginning of 2022, as Moscow in March asked for guarantees that the sanctions would not prevent its military and trade collaboration with Iran. Despite confirmation that Russia had received guarantees from the US, the fate of the Joint Comprehensive Plan of Action nuclear deal remains uncertain.
In a leaked interview from 2021, former Iranian Foreign Minister Javad Zarif commented on Russia’s destructive role in the Iran nuclear talks, stating: “The Russians have been trying to prevent the nuclear deal since 2015 and (Russian Foreign Minister) Sergey Lavrov wanted to disrupt everything on the night of the agreement. After the JCPOA, when Lavrov returned to Russia, he was attacked by the Russian media. Why did you allow this agreement to be reached and Iran to get closer to the West?”
At some point in 2022, this will become a very significant question, as a severely sanctioned Russia would almost certainly not want to push Iran closer to the West once again, which in the current reality would challenge Moscow’s interests. Global liquefied natural gas markets are uncertain over the outlook for both Russian supply and demand from Europe and China in the run-up to the peak winter season. Should a new nuclear deal be struck, Iran, which has the second-largest gas reserves in the world after Russia, could be the solution to the European energy crisis, combining its reserves with Qatar (along with other neighbors like Oman, for example). In contrast, the Kremlin’s interests require preserving Europe’s current energy dependency until the winter to put pressure on Ukraine in their negotiations.
In this regard, long-term bilateral relations between Russia and Iran serve as a disadvantage to their national interests: Iran cannot leverage its potential to solve the European energy crisis because of existing sanctions stemming from policies that often undermine its neighbors’ interests. At the same time, Iran’s leaders consider relations with Russia to be central to their foreign policy approach by countering the US and NATO, which, within the context of the Ukraine war, contradicts Iran’s national interests.
Iran has made attempts to look toward the West, such as with this month’s first visit to Iran by a Polish foreign minister since 2014. At the same time, President Ebrahim Raisi stated: “The Islamic Republic of Iran… declares its strong opposition to NATO’s expansionist policies,” repeating Moscow’s narrative and creating obstacles to further developing relations with EU members.
Nonetheless, both countries being sanctioned by the West also brings them together and allows them to develop an anti-Western agenda, which seems to be an ongoing priority. As noted earlier, they agreed to use their national currencies for energy and trade payments. De-dollarization is a strategic move by Russia and China that has been ongoing since 2014. It primarily aims to overcome the challenges of sanctions. Meanwhile, the agreement for Iran to use Russian territory to conduct deliveries of natural gas to other states offers an alternative to smuggling LNG out of the country in order to avoid Western sanctions.
Despite these two contradictory stories, it seems the future of Russia and Iran’s bilateral relations will depend on the global geopolitical leverage of Moscow after the end of the Ukraine war. More specifically, it will depend on the extent to which Russia is able to keep its position in Syria, how it manages relations with Israel and Turkey, and to what extent it will still be able to balance relations with Iran and its Gulf neighbors.
Beyond the Middle East, significant geopolitical dynamics are in play in the South Caucasus, where Russia has played an important role in the Nagorno-Karabakh conflict between Azerbaijan and Armenia. Given Russia’s pressing concerns in Europe, critical questions are being asked about whether it will create a power vacuum in all these theaters, the extent to which Iran determines its national interests to benefit from them, and to what extent it might act against Moscow’s interests.

Russia would almost certainly not want to push Iran closer to the West by allowing a renewed nuclear deal.

Dr. Diana Galeeva

At least in the case of Iran, it has the option to normalize relations with its neighbors and overcome sanctions. In one of the Gulf International Forum’s panel discussions, it was observed that of the two “evils,” the West might choose to deal with the lesser one. In the case of Russia, however, its long-term geopolitical rivalry with the West suggests that its future as a sanctioned state will continue for a long time. The Iranian leadership can calculate the political, diplomatic and military status of Russia after the Ukraine war and, from this, decide whether to stay in the same category or move toward what the West perceives to be the group of more peaceful, unsanctioned states. However, it seems that, either way, Iran must dramatically change the direction of its foreign policies.

• Dr. Diana Galeeva is an academic visitor to St. Antony’s College, Oxford University. Dr. Galeeva is the author of two books: “Qatar: The Practice of Rented Power” (Routledge, 2022) and “Russia and the GCC: The Case of Tatarstan’s Paradiplomacy” (I.B. Tauris/Bloomsbury, 2023). She is also a co-editor of the collection “Post-Brexit Europe and UK: Policy Challenges Towards Iran and the GCC States” (Palgrave Macmillan, 2021). Twitter: @diana_galeeva