Russia/Iran politics: Quick View - Iran hosts Russia and Azerbaijan in trilateral summit

Content Type
Country Data and Maps
Institution
Economist Intelligence Unit
Abstract
No abstract is available.
Topic
International Relations, Politics, News Analysis, Forecast
Political Geography
Russia, Iran

Event

On November 1st Vladimir Putin, the Russian president, visited Iran to take part in a trilateral summit that also included Azerbaijan.

Analysis

Mr Putin's visit affirmed Russia's growing economic ties with Iran, particularly in the energy sector (which was limited to nuclear energy in the past), and also overlapping foreign policy interests, owing to Iran and Russia's shared foreign policy tensions with the US. Mr Putin stressed Russia's opposition to unilateral initiatives to renegotiate the 2015 nuclear deal-which the US president, Donald Trump, has threatened to abandon-and also that Iran's missile programme was a defence matter unrelated to the nuclear treaty.

During the visit, Amir Hossein Zamani-Nia, Iran's deputy oil minister for international affairs, announced six Memorandums of Understanding (MoUs) with Russian energy companies (two with Gazprom, the state-owned gas company, and two with Rosneft, the state-owned oil major). Meanwhile, Aleksandr Novak, the Russian energy minister, announced that a plan for Gazprom to produce gas in Iran to deliver to India via a new pipeline would be finalised by end-2017.

Iran has largely failed to translate MoUs into major investments since the lifting of nuclear sanctions in early 2016, and actual implementation of these deals is therefore likely to be on a smaller scale than agreed. Moreover, plans to pipe gas to India would need to overcome significant geographical, logistical and security obstacles, and we do not expect the project to be realised within our 2018-22 forecast period.

Russia and Iran, nevertheless, have mutual interests that should provide scope for deeper economic co-operation in 2018-22. Iran hopes to attract large-scale foreign investment to stimulate economic growth, particularly in the energy sector, where external expertise could help boost capacity and modernise technology. However, with the US expanding unilateral sanctions this year and threatening to reintroduce nuclear-related sanctions, many firms remain reluctant to invest.

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