Nuclear deal with Iran - Amir Handjani
As Iran and six world powers edge closer to solidifying an accord that puts limits on Tehran’s nuclear program in return for sanctions relief, a unique opportunity presents itself for the West. The United States and its European partners could begin to decouple the unnatural Iranian-Russian alliance to reign in Moscow’s hegemonic ambitions, as well as bring Iran back into the global economic fold. Competition between Moscow and Tehran would reduce Russia’s influence in the Middle East, unlock Iran and may even serve Europe’s future interest as it looks for alternatives to Russian gas.
As Iran and six world powers edge closer to solidifying an accord that puts limits on Tehran’s nuclear program in return for sanctions relief, a unique opportunity presents itself for the West. The United States and its European partners could begin to decouple the unnatural Iranian-Russian alliance to reign in Moscow’s hegemonic ambitions, as well as bring Iran back into the global economic fold. Competition between Moscow and Tehran would reduce Russia’s influence in the Middle East, unlock Iran and may even serve Europe’s future interest as it looks for alternatives to Russian gas.
Iran and Russia share a complicated history rooted in both countries’ imperial past. In fact, over the past two centuries, Iran has ceded more territory to Russia than any other country. After the Second World War, the Soviet Union destabilized and encouraged separatist movements in the province of Iranian Azerbaijan, similar to what Moscow is doing in Ukraine. As recently as the 1980s, Iran backed Afghan rebels in their conflict against the Soviet Union.
The recent Russo-Iranian alliance has been more a marriage of convenience than a genuine partnership. Russia uses Iran as a geopolitical foothold in the energy-rich Persian Gulf and to poke a finger in the eye of U.S. allies in the region. In return, Iran takes advantage of Moscow’s veto power at multinational forums such as the United Nations. An Iran that is engaged with the West in areas such as energy, trade and peaceful nuclear power generation would no longer see Russia as protector of its interests. It is a fact that Iran’s fractured and vitriolic relationship with the West has driven it to form political, commercial and military ties with Russia. Those ties are still fragile, at best.
Russian companies have signed deals that underwhelmed the Iranian market in contentious areas such as energy and nuclear power. Iran’s Russian-built Bushehr nuclear reactor was riddled by delays and cost overruns. Over the past year, Russian firms have been quick to sign all sorts of long-term agreements in aviation, commercial shipping and agricultural trade out of a fear they would be pushed aside by superior Western firms as a nuclear deal looked more likely.
Russia and Iran have competing interests in energy more so than in any other area of strategic importance. If Iran is able to sell its oil unencumbered by sanctions, it would result in downward pressure on global oil prices and hurt Moscow’s bottom line. Furthermore, Iran holds the second-largest natural-gas reserves in the world, which could eventually compete with Russia to meet Europe’s demand. Over the years, Russia has supplied some 40 percent of European gas imports, but Moscow’s use of energy as a weapon and its increasingly belligerent foreign policy have strengthened the European Union’s resolve to pursue energy diversification.
The EU’s gas strategy currently involves a host of solutions, including gas deliveries by pipeline from Azerbaijan and from as far away as Turkmenistan. Iran’s proximity and vast reserves could make it a more likely contender for the European market. But due to the lack of pipeline infrastructure and years of sanctions, Iran has never had the capability to entertain such an opportunity. It has instead settled on mainly delivering gas to its immediate neighbors — Turkey, Armenia and Azerbaijan.
Discussions have recently reemerged on plans to build the Persian Pipeline to supply Europe via Turkey. However, optimism for quick fixes should be tempered. Pipelines are costly projects that can take decades to build and require a unique mix of commercial interests, political will and sizable investments. Iran would have to improve its lukewarm relations with Turkey, which have been strained by the conflict in Syria. It would also have to offer compelling terms to an international consortium of investors that would be initially reluctant to take on Iran as a risk.
Iran’s plans for a liquid-natural-gas export terminal, which to date have been hindered by existing sanctions, are also likely to be revived. While the project may depend less on political accords than the Persian Pipeline, the need for technology and investment would be vital. If Iran adheres to the terms of its nuclear agreement, it is more likely to receive such support from the West rather than financially strapped Moscow.
The pending deal between Iran and the six world powers has the potential to be a net loss for Russia. The West should grasp the opportunity and encourage Iran’s drift away from Moscow’s economic orbit. Fostering economic competition between the two historical rivals would eventually reduce their political collaboration. In the long run, this deal may result in achieving a strategic win for the United States and Europe.
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