Russia, Iran set collision course

Russia, Iran set collision course
By Sergei Blagov

Asia Times Online, Hong Kong
May 26 2004

MOSCOW – Despite differences between Russia and the United States over
Tehran’s nuclear ambitions, Moscow is still moving toward forging a
“partnership” with Iran, which has been labeled by US President George
W Bush as part of an “axis of evil”.

This month Russian President Vladimir Putin met with visiting Iranian
Foreign Minister Kamal Kharrazi in Moscow and accepted an invitation
to visit Tehran this year. Putin assured the Iranian chief diplomat
that Iran remained Russia’s “old and stable partner”.

When US Under Secretary of State for Arms Control John Bolton traveled
to Moscow shortly afterward, he urged Russia not to supply nuclear
fuel to Iran’s Bushehr reactor until Tehran addressed international
concerns that Iran might develop a nuclear-weapons program. Bolton
told journalists in Moscow that “tactical” differences between the
US and Russia remained over Iran’s nuclear ambitions.

In response, after a meeting with Bolton, the head of Russia’s Nuclear
Power Agency, Alexander Rumyantsev, reiterated that Russia abided
by international agreements banning the proliferation of nuclear

Russia has long been under fire for its help in building the Bushehr
nuclear plant on Iran’s Persian Gulf coast. The US has insisted that
the Russian technology could be used to develop nuclear weapons,
but Moscow and Tehran argue that the plant will only be used for
civilian purposes. Moscow has brushed off repeated US demands that
it cancel Bushehr’s 1,000-megawatt light-water nuclear-reactor project.

Russia has said it would freeze construction on the US$1 billion
Bushehr plant and would not begin delivering fuel for the reactor
until Iran signed an agreement that would oblige it to return all of
the spent fuel to Russia for reprocessing and storage. This agreement
was reported as close to being signed last September, but so far an
agreement has failed to materialize fully.

This month Russian Foreign Minister Sergei Lavrov announced in Moscow
that the issue of the return of the spent fuel to Russia had been
solved. However, he conceded that “commercial” differences with Iran
over the issue remained.

Last October, Russia announced a delay for the launch of the Bushehr
nuclear reactor until 2005 and urged Tehran to improve disclosure of
its nuclear plans. However, there has been no talk in Moscow about
dropping the Bushehr project. Last week, Russia’s Nuclear Power
Agency reportedly indicated it would finish a nuclear reactor in
Iran regardless.

For years, the Kremlin has resisted US pressure and declined to limit
ties with Iran. In March 2001, Putin and Iranian President Mohammad
Khatami signed a cooperation treaty. Subsequently, in October of
that year, Moscow and Tehran signed framework agreements for $300
million to $400 million a year of Russian military supplies to Iran,
including spare parts for Russian-made weapons, new fighter jets and
possibly air-defense, ground-to-ground and anti-ship systems.

Apart from attempts to discourage Russia from fueling Iran’s nuclear
ambitions, the US has pursued its efforts to persuade Russia to
join the US-backed non-proliferation initiative. The hawkish Bolton
regularly visits Russia for non-proliferation talks. However, last
week Russian Deputy Foreign Minister Sergei Kislyak announced after
a meeting with Bolton that no agreement had been reached on Russia
joining the Proliferation Security Initiative (PSI).

Moscow has so far refrained from a clear commitment to join the PSI.
Russia is the only Group of Eight member that is yet to join the PSI,
which was announced by Bush last May.

Apart from the Bushehr project, Russia has other interests in
Iran. Last Thursday, top railway executives of Russia, Iran and
Azerbaijan met in Moscow and agreed to build a Kazvin-Resht-Astara
rail link connecting the three nations. Gennady Fadeyev, head of the
state-run Russian Railways Co (RZD), pledged to build a $100 million,
340-kilometer link connecting Russia to the Persian Gulf via Azerbaijan
and Iran. Fadeyev claimed that the link could funnel up to 20 million
tons of freight to India and Pakistan.

Russia and Iran have long discussed the restoration of a rail link
between the two countries as a viable alternative to Red Sea routes.
This alternative transport link from Asia to Europe – from Mumbai to
the Caspian port of Olya in the Astrakhan region via Bandar Abbas in
Iran – is expected to bring Russia billions of dollars in revenues.

Russia, India and Iran signed an agreement on the development of this
so-called North-South Corridor in September 2000. Russia estimates that
the link could become a rival of the Suez Canal. Russia estimates that
annual trade turnover through the corridor could reach $10 billion
per year, with Russia and Iran becoming the main beneficiaries.

Meanwhile, Moscow’s “partnership” with Tehran could prove double-edged,
notably after Iran clinched a controversial gas deal with Russia’s sole
ally in the volatile Trans-Caucasus region, Armenia. In mid-May, Iran’s
minister of oil, Bijan Namdar Zanganeh, traveled to Armenia and signed
an agreement on the construction of a 114km Iran-Armenia gas pipeline
that would cost $120 million. Iran reportedly agreed to supply 1.27
trillion cubic feet (36 billion cubic meters) to Armenia from 2007-27.

The Iran-Armenia pipeline could also be extended through
Georgia to Ukraine and on to the European Union. The
Iran-Armenia-Georgia-Ukraine-Europe gas pipeline, with a 550km
underwater section from the Georgian port of Supsa to the Crimean
town of Feodosia, has been estimated to cost $5 billion. The planned
gas supply would amount to 2.12 trillion cubic feet (60 billion cubic
meters) per annum, including 353 billion cubic feet (10 billion cubic
meters) for Ukraine.

Russia has been wary that the extended pipeline could be used to funnel
Iranian gas to European markets. It could also allow Turkmenistan to
circumvent Russia’s gas-pipeline network. However, Armenia is yet to
make a decision on the extended pipeline.

Armenia is traditionally Russia’s closest partner in the Caucasus.
Sandwiched among hostile Azerbaijan and Turkey and volatile Georgia,
Armenia has little option but to remain a supporter of Russia’s
geopolitical moves in the Caucasus. However, some divergent interests
have emerged recently, notably Armenia’s aspirations to limit its
dependence on Russian energy supplies by building a gas pipeline from
Iran to Europe. Therefore, Russia’s “partnership” with Iran could
have its limits after all, and not because of the United States.