U.S. senators are calling for sanctions against Iran for making a deal with Russia for a barter scheme involving oil-for-goods worth $20 billion, which will undermine the impact of U.S. sanctions on both countries. Currently, both Iran and Russia suffer under U.S. sanctions; Iran for its nuclear program, and Russia for its aggression toward Ukraine. In this barter scheme, the Russians have offered to trade their products for Iranian oil. At this point, the status quo U.S. reaction rings hollow. The U.S. is not happy with this deal, claiming that it violates the terms of the Iranian interim nuclear agreement. Russian Foreign Minister Anton Siluanov stated, however, that Russia is following U.N. regulations, not U.S. demands.
This latest move should not surprise anyone, especially members of the U.S. government. Russian President Vladimir Putin has been defying the West lately, and has yet to back down from any threats or sanctions. This deal with Iran makes perfect sense for him. Russia is losing its trading partners because of the crisis with Ukraine, so not surprisingly he is seeking non-Western alliances. This will offer a way for him to continue his actions without being inhibited by the West.
For Russia, sanctions are currently not a deterrence. Putin already knows that the West has no intention of taking a hard power stance against him and sanctions are just a mere annoyance. Iran, however, is in desperate need of economic growth. Many Iranians are disappointed with the six-month interim accord; at first they thought it would bring relief, but instead the people are not seeing any improvement. While hitching its wagon to Russia in the short run may prove successful, it is not necessarily the best solution in the long run. If it is looking to have the U.S. as an ally, it certainly will not accomplish this by making deals with Russia.
Iran might not be looking at the long term, however. U.S. and E.U. sanctions have cut Iranian oil exports in half, but Putin’s new offer would significantly alleviate Iran’s economic troubles immediately. Putin will certainly benefit, but the negative impact might fall on the Iranians. Iran is already suffering from sanctions, and adding more will cripple the economy even further. Tensions between Iran and the West will only grow, and levying more sanctions against Iran will only reinforce old stereotypes and negative beliefs that the West has a different set of rules for Iran than it does for other countries.
Is Putin’s goal to undermine the nuclear negotiations between the Iran, the U.N. and the U.S.? It is possible that he has other intentions, such as cutting off a potential new supply of oil to Europe. Also, it is not in Putin’s best interests for Iran to start making inroads now with the West. In his current situation, he cannot afford to lose an ally.
Since Putin took Crimea, he has been in short supply of trading partners, and a new bilateral agreement with a non-Western country might be just what he needs. Putin’s camp seems sure that this deal between Russia and Iran is going to happen, whereas Ali Majedi, Iran’s deputy oil minister, is a bit more skeptical. Because both nations are oil exporters, it will be hard for both countries to sign an agreement. It is possible that Iran and Russia are not even going to sign this deal; despite the desire that the Russians portray for the partnership, it might just be another move on Putin’s chessboard to anger, distract, and outmaneuver the U.S.
This partnership is a threat to the West, and the U.S. is going to have to think carefully about how to deal with the situation. The U.S. has counted on Putin’s help for not only restraining Iran, but also for containing the conflict in Syria. It is in the best interest of the U.S. to curb Iran’s nuclear program while at the same time deterring Russian aggression, so it needs to come up with a better diplomatic strategy and move away from its fallback position of sanctions; instead it must play Putin’s game, and change the current rhetoric and behavior to match his aggressive posture.