Iran-Russia Relations Take Giant Steps Forward

Developing Just Leadership

Waseem Shehzad

Muharram 03, 1444 2022-08-01

News & Analysis

by Waseem Shehzad (News & Analysis, Crescent International Vol. 51, No. 6, Muharram, 1444)

One of the logical outcomes of America’s unrelenting hostility toward the Islamic Republic of Iran has been to push it closer to Russia and China. The American warlords have made the additional folly of taking on Russia and China at the same time. Despite its $813 billion annual military budget, the US has no capacity or stamina to take on multiple enemies but such is the stranglehold of weapons manufacturers that they continue to create new crises even while ordinary Americans reel under rising food and fuel prices.

Washington’s folly was most clearly visible in the trilateral summit in Tehran on July 19 between Iran, Russia and Turkey. Its significance cannot be over-emphasized. The visiting presidents not only met their Iranian counterpart, Ibrahim Raeisi but they were also received separately, by the Rahbar, Imam Seyyed Ali Khamenei.

In his talks with the two visitors, the Rahbar cautioned Turkish President Recep Tayip Erdogan against launching any fresh military operations in Syria. He said this would not only be detrimental to Syria, it will also destabilize the entire region. Erdogan has threatened to launch fresh military operations in Syria, ostensibly against the Kurds but his expansionist ambitions are no secret. Given that both Iran and Russia are opposed to such adventures and the trilateral summit was meant to advance peace in the war-torn country, Erdogan would find it difficult to go against such advice.

His militaristic bluster is designed to garner support at home for the presidential elections due next year. His popularity has plummeted amid a tanking economy reflected in rising inflation and unemployment and a free-falling lira. Opposition parties smell blood and are sharpening their attacks on Erdogan’s failed policies. They were even able to force him to change policy on Syrian refugees in Turkey.

Th true significance of the Tehran summit lay in the agreements signed between Iran and Russia. They have major implications for global political and economic relations and are another nail in the coffin of US unilateralism and regional hegemony.

Faced with similar threats from the US—illegal sanctions, sabotage and refusal to honour even signed agreements—Iran and Russia have moved closer to each other. Russia’s war on Ukraine, euphemistically called special military operation, has acted as a major stimulant to enhance economic, military, and political cooperation between Moscow and Tehran.

Let us look at the details. Russian-state-owned Gazprom offered to invest $40 billion in Iran’s oil and gas industry. The Memorandum of Understanding was signed via a video link the same day as the trilateral summit was about to get underway. The details were naturally worked out long before July 19.

According to media reports, Gazprom will assist the National Iranian Oil Company (NIOC) to develop oil and gas fields and construct LNG pipelines. Iran has developed considerable indigenous expertise despite US sanctions but lack of foreign investment has hampered its efforts to realize the true potential of its oil and gas reserves. Tehran has successfully bypassed American attempts to block its oil exports. It has shared such information with allies including Venezuela and to some extend Russia. Besides, both Russia and China have refused to abide by these illegal US sanctions, being themselves victims of American bullying.

As part of the agreement, Gazprom will invest $10 billion in the Kish and North Pars gas fields in the Persian Gulf. Another project worth $15 billion will enhance pressure in South Pars, the largest gas field shared by Iran and Qatar.

Mohsen Khojasteh-Mehr, Director of the NIOC, described the $40 billion memorandum as “one of the biggest foreign investments in the history of Iran’s oil industry.” It will account for about one-fourth of total investments in this sector in 2025, according to Shana, the Iranian oil industry news agency.

The Rahbar, too, stressed the importance of such cooperation in a communiqué issued by his office. “The long-term cooperation between Iran and Russia is very beneficial for both countries,” the communiqué said. “There are agreements and contracts between the two countries, notably in the oil and gas sectors, that must be pursued and fully implemented,” the Rahbar emphasized.

Equally significant is the two countries’ plan to expand cooperation in the banking and finance sector. China, another victim of US sanctions, is also keen on such expansion. Both Russia and China have launched plans to create their own mechanisms for payments transfer bypassing the SWIFT system. Once the China-Russia system becomes fully operational, dollar as the currency of exchange for major transactions will lose its importance. American attempts to blackmail other countries through sanctions will also collapse. The five-country BRICS alliance has announced the creation of an international reserve currency that will bypass the US dollar. A number of countries, among them Argentina, Iran and Egypt, have shown interest in joining BRICS. Obviously, it will become BRICS-plus!

There was also another news item of interest. The US National Security Advisor Jack Sullivan spoke about a potential Iran-Russian drone deal. Moscow did not comment and Tehran issued a pro forma rebuttal. Is something in the works? If true, it suggests that Iran’s drone technology is so advanced that even a country like Russia is interested in acquiring Iranian-manufactured drones. Further, that Iran is perhaps the only country that can dismiss American threats of not dealing with Russia.

Despite the sanctions, Iran has taken major strides in all fields including political, scientific, military and economic to be courted by major powers. They also know that unlike the US and its allied western regimes, Iran is a reliable partner.

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