In Stratfor's 2017 Fourth-Quarter Forecast, we said Russia and Iran would work in tandem through the Syrian peace talks and in negotiations with other regional players. We are currently seeing that cooperation occur not only in Syria, but other areas as well.
The relationship between Russia and Iran is reigniting. Russian President Vladimir Putin visited Iran on Nov. 1 to meet with his Azerbaijani and Iranian counterparts in the second summit between the three countries. The trilateral format was set up last year by Azerbaijani President Ilham Aliyev to discuss shared concerns and projects in the region. But increasing alignment between Russia and Iran over the last year will give the two countries plenty to discuss.
Moscow and Tehran found themselves aligned in the mid 2000s as the United States and Western powers were increasing pressure on Iran for its nuclear program and on Russia through the Western containment strategy. Russia spearheaded construction on Iran's Bushehr nuclear reactor and supplied it with fuel, enabling Moscow to use the so-called "Iran card" in negotiations with Washington over issues such as NATO expansion, missile defense, and support for Russia's political opposition. Tehran reveled in the rivalry between Russia and the United States, not only because it helped Iran's nuclear program, but also because Moscow regularly interfered with the broader coalition against Iran. The usefulness of their relations, however, dwindled after Iran, Russia, the United States and other countries finalized the Joint Comprehensive Plan of Action (JCPOA), better known as the Iranian nuclear deal.
Yet Tehran and Moscow have rekindled their alignment in recent years. Increased pressure on Russia from Western sanctions in 2014 and the looming threat of expanded sanctions against Iran from U.S. President Donald Trump's administration have given both countries cause to deepen their relationship. Russia's entrance into the Syrian conflict in 2015 also helped solidify their alignment. Recent developments in Syria favor loyalist forces backed by Iran and Russia, helping both countries preserve their influence in the region. Moscow and Tehran have ensured that negotiations with outside parties — including Turkey, Saudi Arabia, Iraq, Israel and Lebanon — over the next phase of the Syrian conflict largely exclude the United States.
Meanwhile, Russian companies are actively looking for opportunities to invest in Iran's energy sector. Lukoil, Rosneft and Gazprom Neft — along with several other Russian energy companies — are in talks to invest an estimated $1.5 billion in the country through oil and natural gas projects. Iran and Russia are also still finalizing their oil-for-goods barter scheme to allow Iranian crude oil to be traded for Russian equipment and goods. The deal was pared down from 500,000 to 100,000 barrels per day, but both countries may be open to increasing that number to counter looming U.S. sanctions.
Russia and Iran have flirted with greater cooperation on defense as well. Russia transferred its S-300 air defense missile system to Iran last year, and is negotiating the sale of $10 billion worth of weapons, including T-90 tanks and Sukhoi Su-30SM fighter jets. The United Nations holds a moratorium on Iranian weapons acquisitions — slated to be lifted in 2020 with any weapons transfers requiring U.N. approval — and the United States has vowed to stop any weapons transfers from Russia to Iran. The demand gives Moscow another point it can use in talks with Washington, and another reason to maintain its partnership with Iran despite U.S. pressure.
Both Russia and Iran seem to have been lumped in with North Korea as primary foes in the eyes of the Trump administration. The current U.S. foreign policy posture gives Moscow and Tehran cause to cooperate not only so they can advance their objectives, but also so they can counter Washington's.