As it becomes more likely that a deal will be reached on Iran’s nuclear program, a new geopolitical battle is escalating over access to its domestic market. Russia is interested in making a deal with Iran over oil exports.
However, Russian officials have reported that the United States is trying to dissuade Russia from intensifying its economic relations with Iran. According to one government source, the pressure has included threats of economic sanctions against Russian companies and financial institutions that participate in any deal made with Iran.
Moscow and Tehran are discussing the possibility of delivering up to 500,000 barrels of Iranian oil to Russia per day (up to 500,000 barrels per day) in return for Russian goods and equipment. Reuters was the first to report on the impending transaction.
The White House, the National Security Council and the U.S. State Department all made tough statements against the deal, declaring that the agreement would be contrary to the existing sanctions against Iran and to the interim arrangement on the Iranian nuclear program.
Russian government sources do not agree with this position – Moscow considers the U.S. sanctions against Tehran to be illegal, and does not link any agreement on the Iranian nuclear program to economic cooperation between Russia and Iran.
“This is not a matter of violation of sanctions or of the Geneva agreements – that is absurd,” said a government source, who chose to remain anonymous.
The source also notes that the U.S. has not reacted in the same way to reports of a similar deal between Iran and India. The Hindustan Times recently reported that Tehran and New Delhi have resumed negotiations on the implementation of a multi-billion-dollar gas pipeline project that would deliver Iranian gas to India.
The paper also announced participation of Indian companies in the development of the Iranian gas field Farzad B. Initially, the plan involved laying a surface pipeline from Iran to India through Pakistan, although the U.S. was strongly opposed to this scenario.
Now, judging by the statements of Iranian and Indian authorities, the parties are leaning towards an agreement that would lay a pipeline on the bottom of the Sea of Oman.
So far, there has been no official reaction from Washington in relation to this issue. American experts say that nothing should be read into this lack of response. “Any country that violates U.S. laws gets sanctions imposed against it,” said Colin Kahl, director of the Middle East Program at the New American Security Center in Washington D.C. and former Deputy Assistant to the Secretary of Defense.
According to Kahl, in November, Iran agreed to intermediate concessions in the nuclear field for two reasons – because of the tough sanctions and the unity of the six international parties to the talks.
“If Russia concludes this deal, the economic pressure on Iran will be eased, and would demonstrate that there are ‘differences’ among the ‘group of six’,” said the Russian government source, adding that in this case, Tehran will be less interested in the fulfilling the agreements on its nuclear program.
“The will be a disaster,” the source said. “In such a case, the White House will unlikely be able to dissuade Congress from the actively discussed idea of imposing additional sanctions against Iran. And this will bury any chances of achieving agreements on the Iranian nuclear issue in the coming months.”
Vladimir Orlov, president of the Russian think tank PIR Center, gave two reasons for the reaction of the U.S. to reports of a rapprochement between Moscow and Tehran.
The White House feels that any appearance of Russia in Iran, be it economic, military or technical, now, before a final agreement on the Iranian nuclear program is reached, will cause a storm in Congress and risk the nuclear deal, while a deal made by India would not provoke the same reaction from U.S. lawmakers.
Additionally, Americans do not want Russia to consolidate its position in Iran. According to the government source, such a scenario is not what the U.S. government promised to its big corporations while lobbying for a rapprochement with Tehran.
“Russia is glad to help the White House overcome difficulties in the Congress, but not by harming itself” said Orlov. “The fact that Russia is considering oil transactions with Iran, not only should be encouraged, but it is rather a belated step.”
Beginning in November, when negotiations with Tehran began to show results, business delegations from the UK, China, Italy, Austria, Sweden and other countries started making overtures to Iran. This month, a French delegation is scheduled to make a visit and American businesses are also interested in reaching out to Iran. According to a Russian diplomatic source, the United States and Iran have recently created a trade and economic chamber.
First published in Russian in Kommersant.