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Iran-Russia ties deepen as sanctions bite

July 18, 2022

Russian President Vladimir Putin is set to visit Tehran on Tuesday, in a sign of growing ties with Iran since his invasion of Ukraine. But the two nations remain competitors in the oil market.

Russian President Putin (r) and Iran's President Raisi (l) in a meeting in Turkmenistan
Iran-Russia strategic ties are as close as ever but have not yet developed into an allianceImage: Iranian Presidency/Zuma/picture alliance

In his second trip abroad since the outbreak of the war in Ukraine, Russian President Vladimir Putin is set to visit Iranian President Ebrahim Raisi in Tehran on Tuesday.  

Putin's trip to Tehran follows US President Joe Biden's tour of the Middle East last week, where Iran and its nuclear program were among the main topics of discussion

Putin will be joined in Tehran by Turkish President Recep Tayyip Erdogan and the meeting will address the situation in Syria, where Iran, Russia and Turkey all have a strong military presence.  

But the meeting will also provide a chance for Moscow and Tehran, both under severe Western sanctions, to showcase their military and economic cooperation, demonstrating to the West that they are not isolated.  

Iran allegedly supplying drones to Russia 

Iran and the Kremlin have increasingly found common ground of late, with officials from both countries repeatedly stating their willingness to expand commercial and political cooperation. 

Putin's visit comes about a week after the White House said Tehran is preparing to sell armed drones to Russia for use in Ukraine. Iran has said technological cooperation with Russia preceded the war, without confirming or denying the US claim.

A line of drones in an underground bunker
Russia has reportedly solicited Iranian drones for its ongoing war in UkraineImage: Iranian Army Office/ZUMA/IMAGO

Amid growing diplomatic isolation, increased trade with Russia could create relief for Iran's economy, which has been foundering under US oil and banking sanctions for years. Russia, on the other hand, sees Iran as a potential arms provider, offering a trade route and expertise in dodging sanctions and exporting oil. 

Ukraine war changes calculations 

The military partnership between Tehran and Moscow has been growing since the outbreak of the decade-old conflict in Syria.  

"But it mostly has remained a tactical cooperation over the matters of mutual interest in the region," as Abdolrasool Divsallar, a visiting professor of Middle Eastern studies at Universita Cattolica del Sacro Cuore in Milan, Italy, told DW.   

Russian Foreign Minister Sergey Lavrov (left) and Iranian President Ebrahim Raisi (right) stand together in an ornate room in Tehran, Iran
Russia and Iran have grown closer as both face increasingly harsh Western sanctionsImage: Iranian Presidential Office/Zuma/picture alliance

Iranian leaders, especially the conservative hard-liners currently ruling the country, had always sought to develop their country's ties with Russia but the war in Ukraine has now made Iran a more central element in Putin's diplomacy. 

'Competitors in the energy market' 

Over the past few months, trade between the two countries has expanded, according to several reports by Iranian media.  

During a meeting with Iranian President Raisi on the sidelines of a regional summit in Turkmenistan last month, Putin noted that trade between the two countries was up 81% last year.  

North-south corridor map
Together with India, Iran and Russia have been working to create a new, shorter trade corridor

Despite that, relations between the two countries are complicated by energy concerns as Russia increasingly cuts into Iran's market share in its push to find new buyers for its own oil. 

"Russia and Iran are in fact trade competitors, especially in the energy market," Hamidreza Azizi, a researcher at the German Institute for International and Security Affairs (SWP), told DW. 

Currently, Iran seems to be losing its already narrow share in the energy market to Russian oil, which now comes at a more discounted price.  

In the last three months, for example, Iran's monthly exports of oil byproducts dropped from 430,000 tons to 330,000, Hamid Hosseini, general secretary of the Iranian Oil, Gas and Petrochemical Exporters' Union, told the Iranian Labor News Agency in late June.  

Iran's largest steel buyers, including China and South Korea, have also shifted to buying discounted Russian steel, the Iranian daily newspaper Shargh reported on May 21.  

With sanctions severely curtailing Iran's revenues, oil exports are vital for the country, which is now facing economic crisis. The inflation rate is above 50%, but Iran has reportedly been forced to slash its oil prices to keep up with Russian discounts.   

'Iran and Russia are not allies yet' 

Back in March, Russia nearly sabotaged negotiations over the Joint Comprehensive Plan of Action , or Iran nuclear deal, the resolution of which could lead to the relaxation of some sanctions on Iran's economy.  

Talks in Vienna appeared to be moving toward agreement until Russian negotiators demanded their trade with Iran be exempted from recent Western sanctions on Russia over its invasion of Ukraine.  

"Iran and Russia are not allies yet," said Divsallar. "Iran has been reluctant to condemn Ukraine's invasion but they have repeatedly opposed the war, which is very different from what allies are expected to do."  

Tehran's stance is based on opposition to war everywhere in the world, Iranian Foreign Minister Hossein Amirabdollahian told his Ukrainian counterpart Dmytro Kuleba on Friday, according to Mehr, a semiofficial Iranian state news agency.  

Iran a partner in Russia's confrontation with the West 

Rather than supporting Russia in Ukraine, Iran has other motives for getting close to Moscow, Divsallar said. With the nuclear talks now at a standstill, "Iran might just want to show the West that it has an alternative, that it can have an influence that goes beyond the Middle East."  

SWP's Hamidreza Azizi, on the other hand, said Iran's rapprochement with Russia stems from a mutual worldview and has continued to deepen over the past decades.  

"Both countries position themselves against the US domination of international relations and both share an ambition to counter it," Azizi said. "In addition, the tensions between Iran and Western powers have risen continuously, ever since the Islamic republic was founded in 1979."  

A woman with a blue headscarf alongside other customers in a luxury goods shop in Tehran, Iran
US sanctions have severely hampered Iran's economy but have failed to completely isolate the countryImage: Morteza Nikoubazl/NurPhoto/picture alliance

Such chronic tensions are unlikely to go away soon, Azizi noted, and will most likely mean that Iran will keep looking to the East.  

Unlike Azizi, Divsallar is of the opinion that a revived nuclear deal and its subsequent sanctions relief could limit Iran's relationship with Russia by giving the country the option to build trade relations with the West instead.  

"A major part of Iran's motive to work with Russia is driven by its urgent economic needs and lack of alternatives," he said. "Iran cannot dismiss its relations with Eastern powers like Russia, as long as there are no options in the West." 

Edited by: Jon Shelton