Iran and Russia have reached certain agreements on the creation of an energy hub, and negotiations on the issue are ongoing, according to the CEO of the National Iranian Gas Company, Majid Chegini. / Tehran Times
by Balinder Singh and Baljinder Kour 24 August 2023
Introduction
The historical relationship between Russia and Iran is a complex tapestry woven over centuries, marked by cultural bonds, geopolitical shifts, and periods of cooperation and rivalry. From shared cultural ties to imperial rivalries, their interaction has been multifaceted. The 19th-century Great Game, during which Russia and Britain competed for influence in Central Asia, played a pivotal role, with Iran caught in the middle. Diplomatic engagements, treaties, and power struggles during this era set the stage for future interactions. The 1979 Iranian Revolution brought about significant changes, altering political dynamics and regional strategies. Despite differences, economic collaboration and trade endured, spanning sectors like energy, agriculture, and technology. Geopolitical factors also spurred cooperation, seen during regional conflicts and counterterrorism efforts. Their involvement in the Iran Nuclear Deal negotiations showcased their international engagement.
While challenges have arisen, periods of resilience and conflict resolution have demonstrated the ability to bridge differences. Shared regional objectives, such as stabilizing neighboring areas and fostering economic connectivity, have fueled collaboration. Cultural exchanges, tourism, and educational partnerships have further enriched the relationship. As of today, Russia and Iran continue to engage in evolving diplomatic, economic, and strategic interactions, shaping their present and future ties. Understanding this historical context is crucial to comprehending the proposed Russia-Iran Energy Hub and the convergence of interests that drive it (War On The Rocks, July 11, 2023).
The Vision of the Russia-Iran Energy Hub
Russia and Iran are strategically assessing the geopolitical and economic implications of their energy cooperation to potentially outmaneuver the United States and its Western allies. They’re engaged in diverse initiatives, including nuclear power, renewables, gas pipelines, and LNG production, aiming to fortify their energy collaboration. Amidst the Russia-Ukraine conflict, energy cooperation between Russia and Iran has intensified, possibly due to global oil concerns. A significant $40 billion deal between Gazprom and Iran’s NIOC has been signed for oil and gas development. Discussions encompass an electronic gas trading platform in southern Iran. Their cooperation deepened in February 2023 with a strategic pact spanning energy, military, commerce, and security. March 2023 saw an agreement between Pakistan and Russia for an Iran-originating gas pipeline to Pakistan, potentially extending to India and China.
July 2023 marked intentions to create a global gas cartel rivaling OPEC, including Russia, Iran, Qatar, Turkmenistan, and Algeria. This aims to synchronize gas policies and enhance influence over Western markets. In August 2023, a Russian-Iranian energy hub proposal emerged, centered on LNG production from Iran’s South Pars gas field. This hub would boost Iran’s gas infrastructure and regional gas market. Russian authorities’ participation in the Iran Oil Show is anticipated. This cooperation allows Russia and Iran to counter Western sanctions limiting their global energy participation. Together, they aim to enhance trade and investment prospects by leveraging collaboration (LSE, January 18, 2021).
Infrastructure Development and Connectivity
Iran strategically positions itself between Russia and China as a countermeasure to Western pressures, aiming to safeguard commercial ties and create economic infrastructure for Asian and Central Asian connectivity. This move helps shield Iran from Western interference while establishing crucial trade routes that Russia and China play central roles in. Iran’s geographical proximity and existing connections uniquely position it to shape new trade networks. The established trade channel could amplify Iran’s export of drones and medium-range missiles to Russia, supporting its actions in Ukraine. Given Western limitations, Iran becomes a vital conduit for Moscow and Beijing’s broader geopolitical strategies, making Iran a pivotal player in their plans. This strategic positioning holds the potential to reshape regional dynamics and global power balances (Shokri, 2023).
Strategic Location and Geopolitical Significance
From a geopolitical perspective, this newly established trade route creates an independent corridor bridging Asia and Central Asia, reducing Western influence. The intricate Russia-Iran-China relationship poses a notable threat to Western interests in the Middle East, Asia, and Central Asia, unsettling the established Western order. This development challenges existing frameworks and could reshape global power dynamics. The corridor strengthens Russia-Iran ties, fostering mutual dependence, particularly in countering international isolation. With Russia’s support, Iran could face obstacles in regional and global initiatives against it. Russia sees Iran as a key player in its geopolitical landscape, so actions against Iran might hinder Russia’s ambitions. The corridor’s establishment amplifies the Russia-Iran-China triangle’s significance, reshaping geopolitical dynamics and introducing potential challenges for Western interests and diplomatic efforts (Sharifli, 2023).
Geopolitical Implications
The potential collaboration between Russia and Iran holds multifaceted implications for various nations and regions. In Turkey, the prospect offers the promise of bolstered energy security and diversified supply sources, even as the nation navigates its role as a major importer of Russian gas and considers importing gas from Iran via Pakistan. While participation in a regional gas market led by Russia and Iran presents advantages, potential conflicts in areas like Syria and Central Asia, along with external pressure from the U.S. and NATO to lessen dependence on Russia and Iran, introduce complexities. Meanwhile, for Saudi Arabia and the UAE, alignment with Russia and Iran could clash with their regional interests, given their adversarial relations with Iran and ongoing proxy conflicts. The potential for competition with formidable players like Russia and Iran in the global oil export market adds another layer of consideration. Israel faces concerns over Iran’s heightened influence and nuclear ambitions through possible collaboration, further complicated by its historical operations against Iran’s nuclear facilities and the potential amplification of Iran’s energy sector capabilities through Russia’s engagement. Oman, on the other hand, envisions benefits, especially from LNG production in Iran’s South Pars field (Gramer, & Mackinnon, 2022).
Europe’s energy security landscape may witness shifts due to the Russia-Iran partnership, with the development of gas resources and infrastructure and the establishment of a joint LNG venture potentially enhancing their market position and extending more competitive pricing and stable gas supplies to Asian economies like China and India. At a broader scale, the collaboration could potentially culminate in the formation of a global gas market, as Russia, Iran, and potential partners like Qatar, Turkmenistan, and Algeria wield influence over supply-demand dynamics, exerting control over gas pricing and availability on a global stage. The potential energy collaboration between Russia and Iran has far-reaching implications for various nations and regions, with opportunities and challenges depending on geopolitical, economic, and strategic considerations.
Potential for Enhanced Bilateral Relations
Iran and Russia are progressively bolstering their ties, cultivating a deeper strategic partnership that reverberates across bilateral relations, regional dynamics, and global geopolitics. Key drivers of this closeness include a shared agenda to counter mutual adversaries and challenges, as both nations confront sanctions and isolation due to their actions against Western interests. Their cooperation provides a buffer against Western economic and political pressure, with Iran’s nuclear program and Russia’s actions in Ukraine prompting joint defiance. Additionally, the Middle East serves as a pivotal arena for their geopolitical pursuits; Iran seeks regional dominance through support for proxy groups, while Russia aims to enhance its influence amid conflicts like the Syrian war. Collaborative efforts in the region further both nations’ ambitions. Economically, sanctions on Russia have fostered diversification, drawing Iran as a promising market and partner, and Iran’s energy potential aligns strategically with Russia’s interests.
Despite the benefits derived from this growing collaboration, concerns arise from regional and international quarters. The burgeoning partnership, particularly in defense and security realms, can reshape the Middle East’s power balance and impact regional stability, unsettling other stakeholders such as the United States and its regional allies. In totality, the evolving Iran-Russia relationship signifies a convergence of interests and strategic priorities, offering avenues for both nations to advance their geopolitical aims in an intricate and competitive global landscape (Alarabiya News, July 25, 2023).
Conclusion
The Russia-Iran energy cooperation is underpinned by a shared set of interests. Iran’s objective in this collaboration is to establish itself as a noteworthy gas producer, not only within the Middle East but also on the global stage. By doing so, Iran seeks to enhance its position and influence in the energy market. On the other side, Russia’s motivation for engaging in this partnership is to mitigate the consequences of economic sanctions that have been imposed on it. This energy collaboration involves Iran acquiring gas from Russia. However, this arrangement introduces a new dynamic into the global energy market, potentially leading to fresh tensions and competition between the two countries in the Middle East. As Iran becomes a significant gas producer with the help of Russian resources, it could challenge Russia’s influence in the region and create a new form of rivalry within the energy sector. The establishment of this trade route marks a significant stride forward for Russia and Iran, carrying several important implications. It holds substantial value as a strategic tool to bypass Western sanctions, breathing new life into their economies by enabling trade otherwise restricted. Beyond its economic role, the route also offers a platform for Russia and Iran to bolster defense collaboration and expand their existing economic ties. This initiative reinforces their strategic partnership, fostering greater connectivity and cooperation across various sectors.
Authors bio:
- Balinder Singh (Ph.D. Scholar), Department of Political Science, School of Social Sciences, Central University of Himachal Pradesh, Dharmshala, India.
- Baljinder Kour (Assistant Professor), Department of Mathematics, Akal University, Bathinda, India.
References
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