IRAN and

RUSSIA
Relations after Cold WAr

Abbas Maleki
maleki@caspianstudies.com

IPIS
Feb. 26, 2008
Introduction
 Iran and Russia: Their relations and its impacts
on 4 levels
-International
-Regional
-Bilateral
-Provincial
 Conclusions

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Russia: The Biggest Country
in the World

Iran and the North, Abbas Maleki 3

 Russia at a glance

 Population: 143.2 million (UN, 2003)

 Capital: Moscow
 Major language: Russian
 Major religions: Christianity, Islam
 Life expectancy: 61 years (men), 73 years (women) (UN)
 Monetary unit: 1 ruble = 100 kopecks
 Main exports: Oil and oil products, natural gas, wood and
wood products, metals, chemicals, weapons and military
equipment
 GNI per capita: US $2,130 (World Bank, 2002)

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Iran at a glance
 Population: 68.9 million (UN, 2003)
 Capital: Tehran
 Area: 1.65m sq km (636,313 sq miles)
 Major language: Persian
 Major religion: Islam
 Life expectancy: 69 years (men), 72 years (women)
(UN)
 Monetary unit: 10 Iranian Rials = 1 Toman
 Main exports: Petroleum, carpets, agricultural products
 GNI per capita: US $1,720 (World Bank, 2002)

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International
Level
 World New Order
 NATO expansion to the East
 UN Security Council
 Nuclear Issue
 Asian Identity
 North-South Corridor

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Regional Level
 Symmetric Interests in Central Asia
-Tajik Civil War
 Asymmetric interests in Caucasia
-Nagorno-Karabakh Conflict
-Chechnya
 Bi-polar Roles in Afghanistan
-Northern Alliance
 Caspian Sea Legal Regime
 ECO

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Bilateral Level
 Economic Relations
Non-military ties are not more than $800 millions
in 2004
 Educational and Scientific ties
Launching Satellite
Assembling airplanes, textiles, heavy industries
Pharmaceutical, Biotechnology, Polymers
 Nuclear Technology
 Air Space Technology
 Energy
-Electricity
-Oil and Gas
 Defense Cooperation
Missile Defense Systems
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Provincial Level
 Connections between Iranian
provinces and Russian
Federation’s Republics:
-Gilan and Astrakhan
-East Azerbaijan and Dagestan
-Kerman and Moscow

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Soviet’s Foreign
Policy
 Soviet’s Foreign Policy was the conclusion of
interaction between national interests and
Communism ideology
 Marx: Proletariat doesn’t have the country.
 From 1947, Soviet competition with US:
-Cold War
-Peaceful Coexistence
-Detent
-Deterrence
 Gorbachev and Regan meeting in Iceland, 1986:
-2 superpowers nuclear weapons reduction
-Soviet economic deterioration

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Russia’s Foreign
Policy (1)
 1992-1996: Full coordination with
US, idealism and democracy
 1996-2000: Strategic alliance with
China and India, focus to Asia,
Middle East
 2000-Sep. 20001: Eurasianism
 Sep. 2001-now: acceptance of
unipolar system

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Russia’s Foreign
Policy (2)
Schools of
Thoughts
 Westerners (Atlanticism):
 Andrea Kozyrov (Aug. 1991-Dec. 1992)
 Jion to Democratic Club,
 Cooperation with EU, NATO, IMF, WB, OECD, G7
 Reduction of relations with Near Abroad
 TWO GROUPS:
Kozyrov’s Followers: Assertive to the West
Liberal Politicians: Civilized dialogue both with
the West and CIS

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Russia’s Foreign
Policy (3)
Schools of
Thoughts
 Eurasianists
Response to the Westerners.
Focus on Russian’s Geopolitics
TWO GROUPS:
-The Democratic Version
(Reformists)
-The Slavophil Version
 Derzhavniki (National Power)
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Countries with Oil Reserves >1 bill. t and Strategic Ellipse

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 Oil Proved Reserves
At end 2002 At end 2003

Thousands Thousands
Proved reserves million barrels million barrels Share of total R/P ratio

Russian
Federation 67 69.1 6.00% 22.2

Iran 130.7 130.7 11.40% 92.9

Total World 1146.3 1147.7 100.00% 41

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US behavior impacts on
Iran and Russia
 United States is the world’s largest
energy producer, consumer, and
importer as respectively 7.45,
20.07, 12.85 mbd
 US various sanctions on Iran like
ILSA
 May 2002 Summit between Bush
and Putin: Signing an agreement
on “Energy Partnership”.
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Russia’s
Policies after
9/11
-Each country has its specific
terrorists
-Russian long-term
Cooperation with US in
energy market
-New Terminals in Murmansk,
Primorsk,

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Iran: an OPEC Member
Russia: a non-OPEC
 Iran is obliged to OPEC share and therefore is avoiding
flooding the market with its oil.
 Russia is not obligated to abide by any quota system.
 Russia as a non-OPEC producer, has produces and export
more of its oil since the late 1990s and most of the increase
in non-OPEC production has come from Russia
 This surge in Russia’s share in global oil markets is at the
expense of OPEC.
 But OPEC and Russia have sought Moscow’s cooperation.
-To restrain production to a certain level to prevent a
collapse of oil prices
-The investment in Siberia was very high
-Russian oil companies wanted to recover market shares
lost since the demise of the Soviet Union.
 Russia cut only 150,000 bdIranin& the first quarter of 2002.
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 Hurdles of Cooperation
between Iran and
Russia’s oil and gas

sectors:
Major oil and gas industries in Russia has been largely
privatized.
5 companies have 70% of country’s oil production:
Yokus, LUKoil, Surgutneftegaz, TNK and Sibneft.
 All of Iranian oil and gas companies are SOEs.
 Mergers like TNK-BP means more barriers for
Russian companies for investing in Iran.
 Production costs are much higher in Russia than in
Iran. Iran makes money at $10 per barrel, but
production becomes unprofitable for Russian
companies at this low price.
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Caspian importance
for US
 Caspian is not important for US as it was before 11/9
-War against terrorism
-The change in US strategy in the region
from political-economic to security-military
approach
-The importance of countries with strong
ability to fight against terrorism instead of
rich energy countries.

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Agreements among 5
Littoral States
 The Convention on Environment was
signed in November 2003 in Tehran.
 Consensus over transportation as 1940
agreement says
 The different agreement on species of
the Caspian, 50% of sturgeon trade is for
Iran
 The next summit will be in Iran in 2006??
 14 round of negotiations among littoral
states
 Several bilateral, trilateral discussions.
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 PIPELINE
ROUTES: AN
IMPRESSION
Bottlenecks and
Pipelines
 11 oil pipeline
projects/ 6
operational
 6 natural gas
pipeline
projects/2
operational.
 Of particular
notice:
 CPC
 BTC
 TCP
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Relations with China
 China’s Asymmetric Deterrence: China with
modernized military is ready to fight along its border without
permit the third party to intervene.
 Instability inside China: Socio-economic crisis in
Northern part of China causes vast emigration to Russia
 Islamic Fundamentalism: Xinjiang independence
should be a bed for Islamic fundamentalism and a copy for
Central Asia.
 Future of Relations: Russians don’t know Chinese
tendency after economic growth and solving Taiwan problem:
-Shift to the South, no threats on Russian borders
-Shift to the North, tension increases in China-CIS borders.

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Differences
 Caspian Sea Legal Affairs
 Military presence in Caspian Sea
 Interactions with US, Israel
 Iran’s Nuclear file
 Energy Security concerning Supply
to Europe

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 Conclusions (I)
1. Russia wants to have good relations with Islamic countries.
Iran is frontier of Islamic countries.
2. Iran is eager to show to the US, Policies such ‘regime
change’ is not working.
3. The large hydrocarbon reserves can be used as a basis for
either cooperation or rivalry between Russia and Iran.
4. Iran-Russia energy policies should not be seen in zero-sum
terms.
5. More cooperation between two countries means enhancing
global energy security.
6. Both countries are heavily dependent on oil revenues
7. Both countries are dangerously vulnerable to the
fluctuations of oil prices.
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Conclusions (II)
 Iran could join to Shanghai Cooperation Organization
 Two countries benefit from keeping prices at a certain
level (roughly between $25-30).
 OPEC’s policy of reduced production benefits Russia by
keeping prices high and enabling Moscow to sell more of
its oil.
 Iran’s share of the world’s proven reserves (11.4%) higher
than Russia (6%), encourages Russian companies to
invest in Iran.
 Iran’s Transportation network is complimentary of
Russian system and can support more oil production in
Russia.
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 Conclusions (III)
 North–South Corridor should embrace new members
 Partnership on gas industries between the first and
second gas owners: Iran has huge underexplored
and unused gas deposits. Russia has the
technological skills and expertise to develop them.

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