Iran Seeks Permanent, Strategic Ties With Russia

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.
Pavel Bednyakov/Sputnik via AP

President Ebrahim Raisi of Iran arrived for high-level talks in Russia this week bearing a draft for a 20-year strategic cooperation agreement between the two countries.

During talks with President Vladimir Putin, Raisi said Tehran wants "stable and comprehensive" ties with Moscow and that the relationship should also be "permanent and strategic."

He arrived in Russia on Wednesday for a two-day visit, during which he met Putin in person for the first time since prevailing in Iran's presidential election last June.

The visit comes at a time of heightened tensions between Russia and the West, with Moscow voicing concerns about eastward expansion of Nato and Western countries alarmed by a recent buildup of Russian troops on the border with Ukraine.

Iran, meanwhile, has been hit hard by US sanctions, with no tangible progress made so far in talks aimed at reaching an agreement that would lift the sanctions in return for Tehran accepting limits on its nuclear program.

Raisi told Putin that "today's exceptional circumstances require significant synergy between our two countries against US unilateralism."

He noted that Iran and the US have been in conflict for more than 40 years, but added that Tehran will not be deterred by "sanctions and threats."

New Impetus

Details of the proposed cooperation agreement have not been disclosed, but Raisi said it would cover areas such as economic ties, science, technology and defense.

Foreign Minister Sergei Lavrov said Moscow will carry out a review of the continuity of bilateral relations that will take account of "the changes in the leadership of Iran."

Russia and Iran are both major oil and gas producers and energy cooperation is likely to remain a cornerstone of their relationship.

On the eve of Raisi's visit, Iranian Oil Minister Javad Owji had meetings in Moscow with Deputy Prime Minister Alexander Novak and Energy Minister Nikolai Shulginov.

Novak cited the cooperation between the two countries within the Opec-plus alliance of oil producers and within the Gas Exporting Countries Forum.

"It was one of the most productive trips, and we achieved much more than we expected," Owji was quoted as saying by Iran's Shana energy news service.

He said the two sides had talked about upstream oil and gas development, refinery construction and transfer of technology.

Energy Deals

Russia's Rosatom has been building a nuclear power plant at Bushehr in Iran, but Iran is in arrears on its payments because the US sanctions have slashed its oil revenues.

Russian oil and gas companies have also shown interest in upstream projects in Iran although work on such projects has stalled since the US walked away from the Iran nuclear deal in 2018 and imposed sanctions.

Iranian sources have claimed that Tehran continues to talk with Russian companies about upstream oil and gas projects.

Major Russian companies have indicated that they are not actively pursuing projects at this time, but will be ready to return if and when sanctions are lifted.

Lukoil and Gazprom Neft were negotiating deals in Iran in 2016-18 but have put them on hold as long as US sanctions remain in place.

State-controlled Zarubezhneft signed Iran Petroleum Contract deals in 2018 to develop the West Paydar and Aban fields and set up a company called ZN-Vostok for that purpose.

But after the US reimposed sanctions on Iran, Zarubezhneft sold ZN-Vostok to Promsyryoimport — a firm with ties to the Russian energy ministry that was also involved in an oil-for-goods/services scheme between Russia and Iran.

It's unclear whether Promsyryoimport has continued to operate in Iran, but it does not appear to worry about facing US reprisals, having already been sanctioned for shipping crude oil to Syria.

Policy and Regulation, Sanctions, Nuclear Policy
Wanda Ad #2 (article footer)
Mumbai-based Gatik, which has become one of the largest shippers of Russian crude, may be unable to insure its ships after being struck off by US and UK registries.
Thu, Jun 1, 2023
Despite a Spanish minister's suggestion that the EU could ban imports of Russian LNG at some point, such a move looks unlikely any time soon.
Thu, Jun 1, 2023
Victory in landmark elections means Erdogan's era of political hegemony will extend into a third decade, with major implications for both Turks and global geopolitics.
Thu, Jun 1, 2023