Is Russia's Backing of Iran Sanctions Starting to Fray?

For a couple of weeks in June, it seemed like Russia's stance on Iran was finally coming into line with that of the U.S. President Barack Obama, in one of the biggest achievements so far of his foreign policy, had convinced Russia to support a new round of U.N. sanctions, approved on June 9, meant to stop Iran building a nuclear bomb. There was a lot of back-patting at the U.N. Security Council, and on June 24, Obama's political honeymoon with his Russian counterpart, Dmitri Medvedev, reached a high point when the two chowed down at Ray's Hell Burger outside Washington, D.C., looking friendlier than ever. But this week, with the two Presidents back in their respective capitals, Russia is changing its tone on Iran. The Kremlin appears once again to be playing both sides.

On Wednesday, Energy Minister Sergei Shmatko held a meeting in Moscow with Iranian Oil Minister Masoud Mir Kazemi, and afterward Shmatko announced that Russia was ready to deliver fuel and oil products to Iran. "The sanctions cannot stop us," he declared. And it is true: the latest round of U.N. sanctions does not forbid fuel sales to Iran, but the unilateral sanctions imposed by the U.S. and Europe do. Russia's decision therefore still has a touch of defiance and seems aimed at demonstrating its independence from the West on the Iran dilemma. At the press conference, Kazemi made it clear that this effort was working. "Independent countries are truly cooperating with Iran," he said.

The following day, Russia took this initiative further by suggesting it might still sell S-300 missile systems to Iran under an existing contract. For years, Iran has been desperate to buy these rockets, which would make its nuclear installations practically invulnerable to attacks from the air. But the U.S. and Israel, who still consider air strikes a last resort in dealing with Iran's nuclear program, have pressured Russia not to complete the sale. On June 18, about a week after the U.N. sanctions were adopted, Russia appeared to concede. "Moscow believes that the sanctions resolution clearly forbids the sale of the S-300 system to Iran," Deputy Foreign Minister Sergei Denisov told Russia's state news agency RIA Novosti that day. Later in June, experts from Russia's Federal Service for Military and Technical Cooperation also concluded that these weapons could not be sold to Iran under the new U.N. sanctions. The Israelis and the U.S. breathed a sigh of relief.

But on Thursday, Sergei Chemezov, the head of Russia's state weapons exporter and a longtime friend of Prime Minister Vladimir Putin, said the sale had not been frozen. "The final decision on signing or dropping the contract must be made by the President," Chemezov said at a summit on Russian-German relations in the Russian city of Yekaterinburg.

This puts Medvedev in a very tough spot. Since the summer of 2008, when Obama announced his drive to move beyond Cold War rivalries and reset U.S.-Russian relations, he and his Russian counterpart have developed a personal rapport. Sitting in their shirtsleeves in Ray's Hell Burger, they seemed the picture of camaraderie, and a few days earlier, Medvedev could hardly contain his glee as he toured Silicon Valley, the symbol of American ingenuity that he has staked his presidency on emulating at home.

But this relationship has always come with demands on Medvedev, with a strong stance against Iran near the top of the list. On this issue in particular, Medvedev has delivered on several occasions. Indeed, at the same summit on Thursday in which Chemezov made his surprise comments about selling Iran the S-300s, Medvedev said at a separate press conference that Russia "was not indifferent" to the military components of Iran's nuclear program. "Iran must find the courage to start full-fledged cooperation with the international community, even if it does not like some of the questions that are posed," he said, sitting alongside German Chancellor Angela Merkel, who had flown in for the summit.

At the same time, Medvedev realizes that sidelining Iran would come at a serious price, not least of all for Russia's budget. The S-300 contract is worth around $800 million, and if Russia fails to honor it, Iran has said it would impose a penalty that experts estimate at another $400 million. The Islamic Republic could also refuse to buy any more military products from Russia in the future, leading to an estimated loss of up to $500 million per year, according to an investigative report published on June 30 by the daily newspaper Nezavisimaya Gazeta. The report also noted that China, Russia's emerging rival in the arms trade, would be happy to take its place.

On the security front, Moscow also has a lot to lose. Insurgents and advisers from Arab states are regularly caught in the mountains of the North Caucasus, the hub of the Muslim insurgency fighting to turn part of Russia into an Islamic caliphate. No evidence has ever surfaced of Iran financing these insurgents. But if it begins to count Russia as one of its enemies — as it had threatened to do in the lead-up to the June U.N. sanctions vote — experts say that Iran could throw its weight behind jihadis in Russia, just as it does in Israel for terrorist groups like Hizballah and Hamas. Likewise, in Central Asia, a patchwork of predominantly Muslim states, Iran could position itself against Russia as a rival for influence, particularly in Tajikistan, which shares strong cultural and linguistic ties with Iran.

"So if it wants, Iran has many ways of inflicting damage on Russia, of shifting the security landscape in Central Asia and the Caucasus in a way that could destabilize the region," says Fyodor Lukyanov, political analyst and editor of the journal Russia in Global Affairs. "It has not yet done that, but if there is a radical change in relations with Russia, it can." Lukyanov says that Russia has already gone as far as it can in alienating Iran to please the U.S, and Obama will need to offer Russia some major rewards if he wants an even tougher stand on the nuclear issue. But with Russia now appearing to backpedal on its support for sanctions, such rewards might be necessary just to get the Kremlin to keep the promises it has already made.