Russia Tightens Ties With Iran During Putin Visit

Russian President Vladimir Putin's trip to Tehran this week for talks with his Iranian and Turkish counterparts on Syria and to discuss bilateral relations shows how important the region is for Moscow both politically and economically.

Moscow aims to keep its influence in the region and to expand economic ties in the face of Western sanctions.

Just days before the talks in Tehran, US President Joe Biden visited Iran's regional foes Israel and Saudi Arabia and vowed that the US would "not walk away [from the Mideast] and leave a vacuum to be filled by China, Russia or Iran."

The participants of the talks in Tehran think differently. Despite disagreement about the situation in northern Syria, "we all have some common ground here: All of us believe that US troops should leave this area," Putin told journalists after the negotiations.

"This is the first point. And they should stop looting the Syrian state, the Syrian people, taking their oil illegally," he said.

However, the leaders of the three states failed to agree on the military operation that Turkey wanted to conduct against Kurds supported by the US in the north of Syria.

On the bilateral level, Putin won the backing of Iran's Supreme Leader Ayatollah Ali Khamenei who said at the meeting with the Russian leader that "Nato would know no bounds if the way was open to it, and if it was not stopped in Ukraine, it would start the same war using Crimea as an excuse.”

Teaming up in efforts to withstand sanctions, Russia and Iran are working on a comprehensive agreement on strategic cooperation aimed at elevating relations between the two countries to a new level. The document is to be signed in the near future, according to Kremlin spokesman Dmitry Peskov.

Grand Energy Plans

Putin said that during his meeting with Iran's President Ebrahim Raisi, special attention was paid "to the strengthening of cooperation in energy, industry and transport." He added that the two men had agreed "to implement large joint projects and to make more active use of our national currencies in direct settlements between our countries."

Just hours before Putin's arrival in Tehran, National Iranian Oil Co. (NIOC) and Gazprom signed a memorandum of understanding (MOU) — potentially worth up to $40 billion — for the development of the Kish and North Pars gas fields, raising reservoir pressure at the giant South Pars gas field and developing six oil fields, according to Iran's Shana oil news service.

Gazprom only said the MOU covered cooperation to develop Iranian oil and gas fields, natural gas and petroleum products swaps, LNG projects, construction of natural gas export pipelines and the exchange of technology.

Gazprom had prepared proposals in 2018 to develop four Iranian gas fields — Farzad A, Farzad B, North Pars and Kish — saying at the time that the fields could feed export pipelines to India and Oman, as well as an LNG plant.

Gazprom's oil affiliate Gazprom Neft was saying it would also be interested in returning to Iran if US sanctions are lifted, having signed an MOU with NIOC in 2016 to look into developing two onshore fields: Cheshmeh-Khosh and Changuleh. Gazprom Neft was also earlier eyeing the Azar oil field.

Infrastructure Development

Russia views Iran as an important part of the proposed North-South transport corridor — a 7,200 kilometer network of ship, rail and road routes — that would allow freight to be moved from St. Petersburg to India.

Russia is pursuing the project as a way to diversify markets for its energy resources away from the West, and test shipments have already started, Putin said.

As part of this corridor, Moscow and Tehran are discussing construction of a 146 km railway across Iran by the Russian Railways corporation, according to Putin. The line would also allow cargoes to move between Iran and Azerbaijan.

As part of the plan to switch to national currencies in bilateral trade, Tehran's currency exchange had recently launched direct trading of Russian rubles for Iranian rials. The two countries also plan to link their electronic payments systems: Mir (Russia) and Shetab (Iran).

According to Putin, Moscow is playing a big role in relaunching interaction between Iran and the International Atomic Energy Agency as part of the efforts to revive the 2015 Joint Comprehensive Plan of Action on Iran’s nuclear program that the US stepped away from in 2018.

Russia-Turkey Negotiations

During the meeting with Turkey's President Recep Tayyip Erdogan, the focus was on Ukrainian grain exports. Putin insists it should be a "package" decision, meaning Moscow "would facilitate the Ukrainian grain exports provided all the restrictions on the potential exports of Russian grain are lifted."

The sides also discussed a switch to national currencies and linking their respective payment systems.

For more coverage of the Ukraine crisis, visit Ukraine Crisis: Energy Impact