Iran Wants To Develop Trade With Russia but a Nuclear Deal Could Prevent It

A return to the Joint Comprehensive Plan of Action could harm Iran’s prospects of joining the Eurasian Economic Union and creating a free trade zone with the Russian-led bloc

Iran and the US are sending positive signals following the resumption of negotiations toward a nuclear agreement in Vienna which indicate that they might be getting one step closer to a final deal. Russia is playing a key role in this round of negotiations, mediating between Iran and the Western powers.

While many American diplomats and analysts had claimed that Russia is busy with getting the best possible deal for its client state, Iran, the return to Joint Comprehensive Plan of Action, as the deal first signed in 2015 is known, may disrupt a few Russian-Iranian plans, such as Iran joining the Eurasian Economic Union (EAEU) and creating a free trade zone with the Russian-led bloc.

Amid the escalating Russia-Ukraine crisis, with over 100,000 Russian troops massed near the Ukrainian border, and rising tensions between Russia and the West, Moscow and Tehran are participating in joint military drills, holding meetings at the highest political and military levels, and seem to be coordinating their statements around the talks in Vienna and the crisis in Ukraine.

In his speech in the Russian Duma – the lower house of the Federal Assembly of Russia – during his recent visit to Moscow, Iranian President Ebrahim Raisi accused NATO of infiltrating “various geographic areas under new guises that threaten the common interests of independent states,” fully supporting the official Russian line. According to Raisi, he discussed with Russian President Vladimir Putin the prospects of long-term cooperation with Russia, among them membership in the EAEU.

However, despite the talks of rapprochement and the change last summer in Iranian leadership, no significant deals were signed during Raisi’s visit to the Russian capital last month. Four years ago, Iran had begun the process of integration into the Russian-led Eurasian Economic Union. Kazakhstan, Kirgizstan, Belarus and Armenia are permanent members of this union, while Moldova, Uzbekistan and Cuba are observers.

Tehran has had a free trade agreement with the Eurasian Economic Union since 2018, eyeing Eurasian integration and access to Central Asian markets. The Russian gain of the accession of Iran to the EAEU would be the increase in movement of Russian cargo to the Iranian port of Chabahar, a direct sea route to ports in India’s Mumbai.

Iran thought it would receive permanent membership in and elevate its relations with the EAEU a year ago; however, the talks became stalled and did not resume until end of 2021.

Yulia Yuzik, a journalist and an expert on Iranian affairs, believes that there has been no progress made so far because the deal was hampered by key members of EAEU, as well as by Iran itself.

Efforts to join the union had slowed under Iranian President Hassan Rouhani, since international sanctions were lifted with the signing of the 2015 nuclear deal and there were many exciting prospects. Rouhani’s advisors, which included a pro-Western element, quietly blocked this deal as well as large Chinese projects. Now, with the election last summer of Raisi, the policy of “Our Asian neighbors are priority” is thriving, and Iran again is showing interest in full membership in the EAEU, Yuzik told The Media Line.

Yuzik believes that, in addition to Iran’s interest in the markets of Central Asia, the Islamic Republic hopes to take control of some of the transit routes between Afghanistan and Central Asia. “In this new concept, Iran aims to become a regional hub and a link between China, Central Asia and India,” she said.

But while the current Iranian political leadership clearly opts for Eurasian integration and seeks economic and political rapprochement with Russia, there is no certainty that Russia is interested in Iran’s courtship.

“It’s very complicated, and full Iranian membership in EAEU might be problematic for Russia. The relationship between the countries is very complex, with many sensitivities and implications in both global and post-Soviet systems. Iran is a rogue actor that is not controlled by the Russians. It seems that the Russians might not be interested in letting Iran access the full membership in the Eurasian Union, since Russia doesn’t see in Iran a dominant strategic partner,” Dr. Avinoam Idan, a Russia expert at the Chaikin Institute for Geostrategy at the University of Haifa, told The Media Line.

Russia might be worried about the growing Iranian influence in Central Asia, however it also hopes to make some gains through this process, namely free access to Iran’s Chabahar port and a direct link to India. Many experts in Russia believe that such access to India is of key importance to Russia, to balance its growing dependence on China.

Experts are divided on whether the uneasy Iranian-Russian relationship will progress or stall if there is a breakthrough in the nuclear talks in Vienna and the West lifts its sanctions on Iran. Also at issue is whether Iranian access to the EAEU will be part of any Russian-brokered deal between the US and Iran.

“I believe that now Khamenei’s representatives are negotiating exactly this kind of deal with the US in Vienna. If Iranians will sign the deal with Washington, full-fledged entry of Iran into the Eurasian Union may become a protracted story,” Yuzik said. “In fact, Moscow guards very carefully the possibility of lifting sanctions on Iran. And the package that it offered to Tehran can be labeled as an ‘anti-American package.’ If the deal with the US does materialize, Iranians will get what they want and will shape their geopolitical project without Moscow.”

For now, it seems that Iran, despite its economic hardships, is holding all the cards to improve its conditions soon. If it can secure a deal in Vienna without looking weak and giving up too many of its achievements in the nuclear sphere, it will benefit from the lifting of sanctions and Western investments. Or it could opt for Eurasian integration and closer ties with China and Russia.

The global nuclear chess game in Vienna is now entering its final round and its outcome will shape both the reality in the Middle East and geopolitical dynamics between Iran and the global powers for the next decade.