15.04.2015 Author: Alexander Orlov

Moscow Withdrew Self-imposed Embargo on the Delivery of AA Systems to Iran

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On April 13 Russia withdrew a self-imposed embargo on the shipment of S-300 air defense systems to Iran. This fact, much to most everyone’s surprise, was immediately followed by a wave of sharp criticisms coming from the US and Israel. Firstly, Russia wasn’t compelled to impose this embargo in the first place, since air defense systems are purely defensive in nature, therefore they were not regulated by the UN Security Council’s sanctions leveled against Iran. In 2010, Russia made a number of concessions to the West, including the embargo on S-300s. Secondly, the withdrawal of all sanctions was a part of the agreement that was signed by all the parties involved in negotiations in Lausanne two weeks ago. It should also be mentioned that there are large-scale supplies of American weapons to extremist and terrorist groups in Syria that are fighting the legitimate government.

Yet, Israel’s concerns are understandable. After all, by signing a deal with Tehran in Lausanne, Washington has de facto rejected any further responsibility for the security of the Jewish state. And it’s crystal clear for any expert that Iran now has an opportunity to further develop its nuclear program. Therefore, the creation of actual nuclear weapons by Iranian scientists is only a matter of time. Actually, they may achieve this goal in a year or two. But Washington needed some form of an excuse to obtain access to the oil and gas markets of the Islamic Republic of Iran, therefore they struck a deal in Lausanne. Therefore, any signs of discontent that are now being shown by Washington cannot be taken seriously, while Tel Aviv should be protesting against Obama’s decisions.

Nevertheless, on April 14, Russian President Vladimir Putin had a telephone conversation with Israeli Prime Minister Benjamin Netanyahu to explain in detail the logic of the Russian decision to supply Iran with the air defense systems. In particular, he stressed that the tactical and technical characteristics of the S-300 system mean it can only be used defensively, therefore it will not jeopardize the security of Israel or any other Middle Eastern country.

Back in 2007, Russia signed a $800 million contract with Iran to supply five battalions worth of S300 anti-aircraft missile systems, which can track and destroy ballistic missiles, cruise missiles and low-flying aircraft. However, both the US and Israel have done their best to persuade the Kremlin to suspend the contract, by expressing concerns that Tehran may use these complex modern systems to protect its nuclear facilities from air strikes. Although, there was a commercial component in the persuasion process – in exchange for delaying the delivery of S300s, Saudi Arabia promised to spend more than 2 billion dollars on Russian military equipment. Russia’s then-President Dmitry Medvedev in 2010 issued a decree forbidding the delivery of air defence systems to Iran. But as soon as Moscow agreed to suspend the contract with Iran, Saudi authorities simply abandoned their promises.

Now, with the ban effectively removed, Russian authorities cannot hide their delight. The Russian Foreign Minister underlined on Monday that at this stage the need for this kind of embargo, especially a voluntary one has simply disappeared. He also stressed that as the security challenges are getting more serious in the Middle East, it’s imperative for Iran to acquire modern air defense systems, referring to the military aggression in Yemen.

In response, White House Press Secretary Josh Earnest said that Secretary of State John Kerry has already expressed America’s discontent with his Russian counterpart Sergey Lavrov. According to Earnest, the United States takes the security of its allies in the region seriously, therefore these actions can further complicate attempts to draft a final agreement with Iran by June 30. But as it was noted by US State Department spokeswoman Marie Harf “destabilizing actions” on the part of Iran in Yemen, Syria and Lebanon suggest that “this isn’t the time to be selling these kinds of systems to them.” Apparently, the Obama administration still lacks a clear perspective on how the nuclear deal can affect the flow of arms in and out of Iran.

As it was stated by US officials, the existing sanctions against Iran will be lifted by the UN Security Council after the final agreement is signed, but instead the US will try to introduce a ban on the supply of certain types of weapons, therefore, allegedly the new resolution will continue preventing the delivery of weapons that could facilitate Iran’s building of ballistic missiles.

However, this problem may affect Russia negatively, since as sanctions are withdrawn the economic well-being of the state might be affected. Moscow’s main sources of income – oil and gas, accounted for 68% of Russian exports in 2014. Should Tehran return to energy markets, the prices of hydrocarbons will take a further dive. Moscow was one of the original authors of the nuclear deal, and today this deal may prove to be a costly one.

Of course the prices can be affected by this change only at the end of the year, but Russia is highly susceptible to even minor hydrocarbon price fluctuations, But the main threat to the Russian economy is Iran’s capability to gain ground over Russia’s gas customers. Gas exports account for a third of Russia’s export earnings, and Iran can boast a hefty 34 trillion cubic meters in reserves that can be conveniently delivered to Europe. In addition, Turkey needs Iranian gas and is ready to increase its imports, but only if it is sold at an acceptable price. This fact was underlined by Turkish President Erdogan at a press conference in Tehran: “We purchase 90-95 percent of Iran’s exported natural gas. The most expensive natural gas that we import is from Iran. If this price were lowered, of course we would increase the amount of natural gas we buy from Iran.”

Today Iran is the second largest supplier of “blue fuel” to Ankara, and delivers a total of 10 billion cubic meters of gas a year. Now Tehran may be allowed to transit Turkmen gas through its territory. This trend can only be followed by the EU taking steps to receive the delivery of Iranian gas. In both cases the quantities will rise tremendously, which would undermine the position of Russia’s Gazprom.

Therefore, Moscow must hurry to at least get something for helping the United States to reach a deal on the Iranian nuclear program, without promoting its trade and economic interests in Iran. The S-300 dilemma is but the first serious stake of Moscow in Tehran in an environment where sanctions may soon be completely removed. Unless, of course, the United States, Israel and Saudi Arabia change their minds by June 30.

Alexander Orlov, political scientist, expert Orientalist, exclusively for the online magazine “New Eastern Outlook”

 


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