The relationship between Iran and Russia has expanded. They have jointly rescued the Syrian regime, oppose a US-led liberal international order, cooperate to circumvent Western sanctions, and collaborate in the arms trade, yet they are fierce competitors in Asian energy markets. This GIGA Focus explores how their interests have converged and what might disturb their new-found comity in time.
Political leaders in Iran and Russia share the wish to push back against a US-led liberal world order. This is pivotal in fostering a closer relationship between the two countries.
Both states are under economic sanctions from the West. To evade these punitive measures, banking and trade cooperation and knowledge-sharing have been at the core of the bilateral cooperation between Moscow and Tehran. The arms trade between the two countries is also increasing.
Since the beginning of the Syrian War, collaboration in the Middle East has played a key role in the Russo–Iranian strategic partnership and driven their cooperation in Eurasia and Ukraine, too.
The two countries have upheld long-standing civilian nuclear collaboration. This could have implications for the military realm and for the threat of nuclear proliferation as well.
By obtaining full membership of the Shanghai Cooperation Organisation, Iran has demonstrated a strong desire to expand ties with Eurasian regional actors in recent years. That is likely to remain unchanged under newly inaugurated President Masoud Pezeshkian.
Policy Implications
The growing partnership between Moscow and Tehran could undermine Western powers’ influence in the Middle East and Eurasia. Western countries should, accordingly, strengthen their diplomatic and strategic partnerships with other key regional actors such as Turkey, India, and the Gulf states to counterbalance the Russia–Iran alliance and help maintain regional stability.
A Steady Strengthening of Ties
Coming from a history of antagonism, Russo–Iranian relations have become closer in recent years, which raises questions about the likely outcomes of their cooperation. After the US and UK led a coup d’état against Prime Minster Mossadegh in 1953 (Operation Ajax), Iran maintained a pro-Western stance in the post–Second World War decades. It was strengthened by the Cold War’s global dynamics and Iran’s perception of the Soviet Union as a threat. In the first years after the Islamic Revolution of 1979, the Iranian government then adopted an independence narrative, distancing itself from “the West and the East” alike. Tehran’s long-running wariness of the USSR was further reinforced by the latter’s invasion of Afghanistan in December 1979. Iran’s political elites thus rejected Soviet ideology and its geopolitical aims both before and after the Islamic Revolution.
The collapse of the USSR in 1991, however, would remould relations between Tehran and Moscow. Over time, Iran and Russia have transformed into trusted partners and sought to form a pragmatic alignment, particularly since the beginning of the Syrian (Civil) War in 2011. After the Ukrainian crisis of 2014, Russia was also subject to international economic sanctions as well, facing the specter of military and political isolation. This coincided with its emphasis on the “Eastern vector” of its foreign policy, reflecting the principle of “multi-vectorism” – a hallmark of President Vladimir Putin’s foreign policy since the turn of the new millennium. Moscow thereby underscored the importance of its Middle East orientation while seeking alternatives to its economic and political relations with the West.
Policy divergence over Syria between Moscow and Washington became more evident with the passing of time, manifesting in their differing views on the legitimacy of the Bashar Al-Assad regime and engagement with other regional actors. Russia enhanced its level of cooperation with Iran to take on a leading role in the Syrian conflict. Iran consistently supported the so-called axis of resistance (led by Iran, and including the Syrian government as well as non-state actors in Iraq, Lebanon, and Yemen). Russia started implementing an expansionist approach in pursuit of its geopolitical objectives, with a particular focus on projecting power on its critical southern flank. Though the cooperation was not without tensions and disagreements, including conflicting strategies being in play, both parties achieved their main aims in Syria. Tehran’s top priority was to preserve the Assad’s government rule. Moscow was mostly focused on Western influence in Syria while ensuring its own military presence. The Islamic Revolutionary Guards Corp (IRGC) provided Assad with ground support through its network of regional militia groups, while Russia engaged in aerial bombardment. Such collaboration in Syria thus brought Tehran and Moscow closer together.
Since Russia’s full-scale invasion of Ukraine in 2022, Iran has been seeking to consolidate its position as a reliable partner for Moscow. This has included efforts to circumvent sanctions and push back against political isolation, combined with its support for Russia’s war effort and procurement of weapons. The Russo–Iranian nexus has strengthened accordingly.
This relationship has, however, not been smooth sailing. Then Iranian Foreign Minister Mohammad Javad Zarif stated in 2021 in a leaked interview that Russia now wanted to kill the nuclear deal that had been concluded in 2015 between Iran and six world powers. Most recently, the disagreement over the Zangezur Corridor, a land route connecting Azerbaijan with its Nakhichevan exclave by traversing Armenian territory, has revealed another point of controversy between Iran and Russia. The Corridor is of high strategic and economic importance for all sides, and the issues around it have remained unresolved ever since Azerbaijan recaptured Armenian territory in 2020 as part of the Nagorno–Karabakh conflict. Baku and Russia want Moscow to monitor and control the Corridor, while Yerevan and Tehran oppose such a scheme. Iranian senior officials have openly and frequently rejected Russia’s proposals hereon in recent years. While the disagreement between Tehran and Moscow over such matters has surfaced at times, the two countries have adopted a narrative that signals their dedication to a mutual vision of a multipolar world order and strategic autonomy. The expansion of ties between Tehran and Moscow in the fields of military, cyber, economic, and nuclear cooperation have created synergies that will be tested over time.
Shared Worldviews
Iran and Russia have in common an anti-hegemonic stance, while their political leaders share a vision for the future of the global order. This has played a key role in helping strengthen their ties. The Ukraine War has provided new avenues for collaboration between Tehran and Moscow. Iran has perceived the crisis as an opportunity to project power by showing off its military capabilities to the West. Russia’s procurement of Iranian drones and missiles has allowed the latter to take up a significant role in the Western powers’ strategic calculus. The overarching worldviews of the two states are primarily focused on undermining the US’s global influence and promoting a multipolar system. Iran’s notion of “strategic depth” that has led to the formation of a “geography of resistance” has sought for decades to challenge the West, and particularly the US. The country’s Supreme Leader Ali Khamenei has promoted this notion and propagated a well-crafted narrative around religious concepts like “jihad” to advance the Iranian state’s political aims regionally. Synergy between the global vision of Iran and that of Russia has manifested itself in Ukraine, as facilitated by Iran’s delivery of weaponry to its ally. In this world vision, non-Western powers like Russia and China seeking to dent the US’s global influence is a unique prospect for Iran to establish itself as a more powerful player regionally and even worldwide.
United Nations Security Council (UNSC) Resolution 2231, first adopted in 2015, expired in October 2023. The Resolution was part of the nuclear agreement, the so-called Joint Comprehensive Plan of Action (JCPOA), that was signed in 2015 between Iran, the UNSC’s five permanent members, and Germany. It imposed restrictions on Iran’s trading of weapons. Under the Resolution, the latter was prohibited from exporting and importing missiles, drones, and related technologies without UNSC permission. Expiration of this Resolution has kept Iranian arms deals protected from international scrutiny. Resolution 2231 was also designed to allow any participating state to trigger a snapback mechanism that would reimpose all the previous UNSC Resolutions on Iran in case of significant non-compliance by Tehran. The snapback clause itself will expire in October 2025. The signatories to the JCPOA have so far refrained from triggering this mechanism, as Tehran would perceive that as an escalatory move. Any further decision hereon being taken by the UNSC is also unlikely because of Russia’s veto right. Against this backdrop, Tehran’s arms sales are likely to continue in support of Russia’s war in Ukraine.
Russia has also recently begun to provide Iran with military know-how and technology, although it had been reluctant to do so for many years in seeking to maintain an edge over Tehran and to avoid regional escalation. In 2007, Iran signed an agreement with Russia to purchase the S-300 missile system that can engage aircraft up to 100 miles away. Russia began to train Iranian technicians to operate the S-300 system; by 2010, however, then President Dmitry Medvedev had blocked the sale due to international nuclear-related sanctions. Iran launched a programme to develop its own version of such a system, the Bavar-373, that is meant to be stronger than the S-300 and very close to the capabilities of the Russian S-400. In 2016, Moscow finalised delivery of the S-300 system to Iran in a deal estimated to be worth USD 800 million. Three years later, then President Hassan Rouhani unveiled the Bavar-373. Iran has also sought Moscow’s assistance in modernising its outdated air combat units. In November 2023, local media announced that a deal had been concluded between the two countries, with Russia agreeing to deliver Sukhoi Su-35 fighter jets, Mil Mi-28 attack helicopters, and Yak-130 jet trainers to Iran. Since then, there has been no update in the media on this deal.
In September 2024, Western media reported the transfer of Iranian-made Fath-360 missiles to Russia via the Caspian Sea. Both the Iranian and Russian governments have officially denied this. However, a member of the National Security Commission of the Iranian parliament told the local media that
Iran has nothing to lose. We [the Iranian government] have been giving missiles to Houthis, Hezbollah, al-Hashd al-Sha’bi, and Hamas, why should we not give missiles to Russia? (Deutsche Welle 2024)
He also stated that, in exchange for drones and missiles, Iran receives soy and corn from Russia. Arms transfers between the two countries and their potential impact on the ongoing Ukraine War are major security concerns, particularly in Europe. Beyond that conflict setting, such collaboration deepens the military cooperation that might one day extend to the nuclear field (Deutsche Welle 2024).
Moreover, Russia and Iran have engaged in extensive cybersecurity cooperation in recent years. In January 2021, this was agreed upon in an “official agreement on cybersecurity cooperation” focusing on strengthening common defensive measures. Moscow assisted Tehran in ramping up its citizen-surveillance capabilities in the aftermath of the 2022 popular uprising in Iran (Wechsler 2021). This military and cyber cooperation between Iran and Russia indicates that shared elements informing the two states’ respective political agendas have brought them closer together. Maintaining political power domestically and preserving their respective regimes are top priorities for both countries. Such collaboration is structured to increase the power of their envisioned anti-Western axis, manifesting in the economic realm as well.
Trade and Geoeconomic Cooperation
Russia’s full-scale invasion of Ukraine prompted heavy Western sanctions that particularly targeted the country’s financial sector. These measures were much harsher than those imposed on Russia after its annexation of Crimea in 2014. This turn of events prompted Russia to seek alternative partners for trade and financial cooperation. China, the Central Asian countries, and Turkey loom large in such endeavours, but also playing a key role in Russia’s efforts to circumvent sanctions is Iran. The latter has decades of experience in surviving Western sanctions, is geographically proximate to Russia, and there are striking similarities between the strategic visions and mindsets of the two countries’ political leaders. Further, Russia has incorporated the narrative of “economic resistance” that has been a key driver of Iranian policy in recent decades.
This framework challenges the power of the imposed Western sanctions and magnifies the significant role of non-Western partners and allies, for both Iran and Russia, in breaking their economic isolation globally. A clear example of this narrative’s adoption is visible in the declaration that was signed in 2023 by Iran and Russia on the “Ways and Means to Counter, Mitigate and Redress the Adverse Impacts of Unilateral Coercive Measures” (Ministry of Foreign Affairs of the Russian Federation 2023). This declaration demonstrates that both sides are determined to reduce their reliance on the currencies of states seeking to impose their “monetary hegemony over the global economy.” Russian Foreign Minister Lavrov described the initiative as a significant step in coordinating the global community’s efforts to overcome illegal sanctions by the US and its allies (TASS 2023).
Bilateral trade between the two countries had increased already before the events beginning February 2022, with a strong trade surplus in favour of Russia. It exported goods worth USD 3 billion to Iran while only receiving imports of USD 1 billion from there in 2021 (see Figure 1 below). The narrative of strategic economic cooperation looks less impressive if one examines the nature of the goods traded. The bulk hereof are food items that have not been subject to Western sanctions, such as cereals, fruits, and nuts (see Figures 2 and 3). Iran’s share in Russian trade with the world remains relatively modest, and while there is potential for growth it has not yet reached a level that would significantly alter the overall trade dynamics of either country. Available trade data does not capture military sales, however, and only reflects one dimension of a broader, more complex economic partnership.
Figure 1. Russo–Iranian Bilateral Trade 2017–2021 (thousand USD)
Source: International Trade Center 2024.
Figure 2. Breakdown of Russia’s Exports to Iran (2019)
Source: International Trade Center 2024.
Figure 3. Breakdown of Iran’s Exports to Russia (2019)
Source: International Trade Center 2024.
Russia’s support for integrating Iran into various economic initiatives in which it maintains a powerful position is also reflective of the expanding economic ties between the two countries since February 2022. With Russia’s backing, Iran became a full member of the Shanghai Cooperation Organisation (SCO) in 2023. This represented a geopolitical breakthrough, as it was the first time the country successful integrated into a major Eurasian initiative. The SCO was established in 2001 to enhance stability and security in that world region. Over the years, the SCO’s functions and geographical coverage have expanded, with economic and energy policies at the heart of the group’s agenda. Some other Middle Eastern countries and key energy exporters have been granted the status of SCO “dialogue partners” (Turkey in 2013; Egypt, Qatar, and Saudi Arabia, in 2022; Bahrain, Kuwait, and the United Arab Emirates in 2023). Security issues are not clearly stated in the organisation’s official communiqué, but are increasingly being formulated in ambitious terms by members. SCO Secretary General Zhang Ming said in Astana in May 2024:
The SCO has found itself in a challenging geopolitical environment, […] in order to convert these challenges into opportunities the organization is required to display commitment to political coordination and solidarity to bring about a world order with better justice to all, based on equality and multipolarity. (SCO 2024)
Iran also signed a free trade agreement with the Russia-led Eurasian Economic Union in 2023. This may open up new markets for Iranian goods and services. The initiative is aiming to eliminate customs duties on almost 90 per cent of traded goods (Eurasian Economic Commission 2023). Iran also joined the BRICS grouping in January 2024. This is expected to help it strengthen ties with the major economic powerhouses of Asia, namely China and India.
Since the beginning of the Ukraine War, Russia’s oil sector has been under international sanctions. Tightened export conditions forced Iran and Russia into competition for alternative sales outlets in Asia, most notably China and India. On the other hand, Iran and Russia have signed a series of memoranda of understanding in recent years to pursue collaboration on ambitious projects. Transneft, a Russian state-controlled pipeline company, and Iran’s Oil Ministry signed a MoU on technological cooperation and joint projects. Gazprom, Russia’s major gas producer, and the National Iranian Gas Company signed one on boosting Russian gas supplies to Iran, meanwhile.
Another area of economic collaboration between the two is the banking sector. The latter is under mounting pressure in both countries due to international sanctions, with transactions in dollars and euros proving extremely difficult. Various rounds of currency devaluation and the growing costs of transactions carried out via proxies and front companies have had a visible impact on both Iran and Russia. The two countries have aired plans for banking sector-related collaboration since 2022. Last year, the Financial Messaging System of the Bank of Russia (SPFS) was connected with that of Iran (SEPAM). This enabled trade to take place in the respective currencies of the two countries, thus bypassing the Western interbank payment system SWIFT. In a subsequent move, the Russian Mir and Iranian Shetab payment systems are in the process of being integrated. In the first phase, Iranian bank cards are expected to be used at Russian ATMs with the option for cash withdrawal in rubles, while the next step will see Russian Mir cards be accepted in Iran going forwards. Both countries are also exploring the development and potential use of so-called central bank digital currencies, starting pilot projects to test the digital ruble and rial (Kolobova 2024). While there has been limited progress towards its widespread adoption and it is not yet in use for cross-border transactions, this is viewed as a further means of circumventing Western sanctions and developing a more autonomous own financial system.
Lastly, due to its geographic position, Iran is perceived by Moscow as a key pillar in its vision for regional infrastructure development. The International North–South Transport Corridor (INSTC) that was first introduced as a tripartite agreement between Russia, India, and Iran in 1999 is a case in point. INSTC is a 7,200-kilometre-long multimodal route that connects Saint Petersburg with ports in India and Iran. The initiative is a crucial element of Russian foreign policy towards the Eastern vector, and promises to create new jobs and generate tax revenue in participating countries. It is designed to facilitate global and regional trade and attract investment from the Gulf states (Truevtsev 2023). Moreover, the route through the territories of Central Asian countries (Moscow–Astrakhan–Baku–Tehran–Bandar Abbas) and via Mumbai is aimed at creating a viable alternative to the Suez Canal, reducing transportation costs and cargo delivery times. The corridor is partially operational, but it is not yet functioning at its planned full capacity. Russia and Iran are currently engaged in joint efforts to construct the required segment of the Astara–Rasht railway.
Figure 4. The International North–South Transport Corridor
Source: Authors’ own compilation.
Nuclear Collaboration
Russia’s close collaboration with Iran in the nuclear field is a key pillar of the two countries’ relationship. Iran’s nuclear programme started in the mid-1970s with Western technical and financial assistance. After the Islamic Revolution, Western companies left Iran and the country’s nuclear programme was abandoned for a number of years. The construction of Bushehr nuclear power plant had been a geopolitically important initiative by Western states and the Shah to keep Iran out of the USSR’s orbit. In the aftermath of the latter’s collapse, however, Moscow sought to engage with this previously suspended project. It was crucial for the Russian Federation to keep up the involvement of their companies in the nuclear-machinery manufacturing sector, as doing so would then help create or safeguard approximately 200,000 jobs. Russia’s state-owned nuclear sector was also keen to generate revenue through the sale of nuclear fuel as well as maintenance and repair contracts. Iran and Russia began to negotiate, accordingly, over the possible ways in which Moscow could support this construction project starting 1990.
Negotiations led to a preliminary accord on cooperation in 1992, with the two countries reaching final agreement three years later: Russian government entities were tasked with completing the first unit of the Bushehr nuclear power plant. That first unit finally started commercial operation in 2013. It had cost around USD 800 million to build, while accounting for 1.73 per cent of total Iranian national electricity generation by 2020 (IAEA 2022). As part of the original agreement, Russia has also been the main provider of nuclear fuel throughout the power plant’s entire operational cycle. This has locked Iran into long-term cooperation with Moscow in the nuclear field. The Rosatom State Atomic Corporation has been providing Iranian nuclear scientists with relevant training. Bushehr’s second and third units remain under construction as of 2024; Moscow has been a major lender to Iran for the construction of all three.
The Iranian government has continuously denied it harbours plans to develop atomic weapons. Its nuclear programme has, at least, provided the regime with a powerful bargaining chip vis-à-vis the West. Iran’s nuclear strategy has been formed of a combination of two key elements: First, the country has invested heavily in dual-use technology, through the state policy of a “jihad of knowledge” promoted by its Supreme Leader. This policy is aimed at making Iran self-sufficient in areas of knowledge that can help support its two major policy goals, namely regime survival and power projection. Second, the state has invested in narrative manipulation and influence operations to manipulate public and policymaker opinion on both the nature of its nuclear programme and the possible peaceful resolution of its decades-long dispute with the West. The International Atomic Energy Agency (IAEA), even following the nuclear agreement of 2015, reports, however, that Iran has continued to adopt a combined approach of evasion, procrastination, and cheating to disrupt the Agency’s implementation of the required measures to verify the peaceful nature of the country’s programme (Levite 2021). As a permanent member of the UNSC, meanwhile, Russia was a signatory to the JCPOA aimed at ensuring the civilian nature hereof.
UK and US officials have recently raised concern over the possibility of Russia bolstering Iran’s nuclear-weapon programme (Reyes 2024). Although there are no confirmed reports on whether there has indeed been collaboration of this kind between the two countries, the prospect of it is unsettling for global security. Iran’s nuclear programme is a convenient tool for Russia to push back against the West, particularly the US. The prospect of a nuclear Iran is worrisome enough for the US and its allies across the region to be willing to make compromises towards both Russia and Iran. Tehran is fully aware of the power of its nuclear programme as a negotiating tactic with the US and has been using that for over two decades to advance its own political agenda. Moscow may not be ultimately interested in further destabilisation in the region, or a nuclear arms race for that matter. But for the time being at least, nuclear collaboration with Iran is a useful way for Russia to remain relevant regarding one of the most challenging issues in regional and global strategic calculi.
What Lies Ahead?
Iran and Russia have been expanding ties in various fields in recent years. Both countries have adopted a narrative indicative of their determination to join forces on sanctions circumvention. They have also signalled a share understanding of a new global order based on the expected decline of the current US-led liberal one. The Ukraine War has played a pivotal role in cementing their relationships in new realms such as military-technology exchange and cybersecurity cooperation. Both short- and long-term economic partnership, however, seems to have been the main element in Russo–Iranian relations since February 2022. Moreover, Iran’s nuclear programme, as noted a significant source of anxiety in the West, has been leveraged by Moscow as a convenient means by which to counter and undermine the US’s global standing.
The death of Ebrahim Raisi that prompted Iran’s 2024 snap presidential elections reinvigorated some degree of hope among Western policymakers, with the eventual winner, Pezeshkian, promising on the campaign trail that his government would be open to dialogue with the global community in seeking to resolve the political deadlock the country finds itself in. Given the current dynamics between Russia and the West, the prospect of Iranian normalisation with the latter would not be a desirable outcome for Moscow. This is likely the reason why several Iranian officials have openly expressed how Tehran has no plans to change policy towards Russia in the post-Raisi era. Khamenei, the most influential figure in Iran’s both domestic- and foreign policy circles, has been supportive of strengthening ties with Russia. The two countries discussed a comprehensive strategic partnership agreement this year, the conclusion of which would mark a major milestone in the history of their relationship.
Furthermore, Russia is expected to continue backing Iranian involvement in alternative international platforms such as the SCO and BRICS. Thus, the expansion of trade as well as the shared vision of a global reordering have driven Tehran’s and Moscow’s continued resistance and power projection vis-à-vis the West. This is expected to remain the case going forwards, with both countries recognising the significance of their joint efforts to each gaining a more powerful standing globally.
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