Atlantic Community:Open Think Tank Article "Russia Profits from the Iran Nuclear Standoff "

June 23, 2008 | 3 comments | Print this Article | E-Mail Your Opinion

Russia Profits from the Iran Nuclear Standoff

Ryan R. Miller: The belief Russia will help the West ease tensions with Iran is wishful thinking. A compliant Iran would be Gazprom’s biggest competitor. Washington should offer the Mullahs EU energy markets in exchange for concessions on the nuclear issue and thus reduce European dependence on Russian energy.

Senator Charles Schumer penned an op-ed in The Wall Street Journal on June 3 entitled "Russia Can Be Part of the Answer on Iran." To buy Russian support for tougher sanctions on Iran, he argued, the United States should scrap missile defense installations in Poland and the Czech Republic, and recognize "Russia's traditional role" in the Caspian Sea region (a potential alternative source of energy for Europe).

So in less than 750 words, Schumer managed to confirm the nightmare scenario of a number of former Russian satellites that are now US allies: under the right circumstances, Washington might be tempted to bargain away the security interests of "New Europe" in the face of "new threats" requiring Russian assistance.

The New York Senator is not the only US politician to explore ways of "accommodating" Russian interests on Europe's periphery as part of a diplomatic deal over Iran. Congressman Brad Sherman, for instance, has hinted that the United States should turn a blind eye to Russian interference in Europe's frozen conflicts. At a congressional hearing last week, Sherman appeared to criticize the Bush Administration for not modifying US policy on items like Abkhazia, South Ossetia and Transnistria in order to get the Russians to play ball on Iran. "This is self-imposed powerlessness," he complained. Moving forward, there will likely be voices inclined to sacrifice Ukraine's NATO membership bid as the price of winning Kremlin support.

But such thinking is not only short-sighted and immoral, it is also naïve. For arguing that Russian diplomatic support is somehow a silver bullet to the Iran issue obscures an important fact: Russia, to a certain extent, profits from the West's ongoing standoff with Tehran, and thus may not be so easily tempted by any of these grand bargains.

Russia benefits by exploiting current tensions to solidify its control over Europe's energy sector. In line with Kremlin aspirations to restore its sphere of influence, Gazprom - the Russian state-owned gas giant - is working to shore up its monopoly over Europe's natural gas supplies. Energy dominance over European nations is a top foreign policy priority for today's Russia. The new Russian President, Dmitry Medvedev was until recently Gazprom's Chairman, suggesting that the interests of Gazprom and the Russian state will continue to go hand-in-hand.

Iran, though an international pariah, holds the world's second-largest gas reserves and could offer Gazprom some competition - if Western oil and gas majors developed these deposits. But the nuclear crisis, and sanctions against US and EU companies doing business in Iran's energy sector, puts any Russo-Iranian gas competition on ice. Just recently, Royal Dutch Shell said it was backing away from an investment in a major Iranian gas field in order to avoid being sanctioned.

In practice, new pipelines that would bring non-Russian supplies to Europe might not get off the ground without access to Iranian gas or Turkmen gas exports via Iranian territory. So long as Iran is boxed in, Russia can dominate European energy flows and employ such commercial dominance to regain its long-lost political clout.

Because of Russia's ambiguous set of interests, Washington should be careful of relying too heavily on Moscow for solving the Iran conundrum. Besides, getting Russia to coerce Tehran anytime soon is probably wishful thinking; Russia cannot play the role that China did with respect to North Korea because it does not have the same level of influence. True, Russia could be less obstructionist in the UN Security Council, but Russian diplomats will only go so far. After all, maybe some in the Kremlin don't want things to get better. Think about it: if the West brought Iran to the negotiating table, reached an understanding with the Mullahs on the nuclear issue, and offered EU energy markets as a reward (which certain Europeans would like to do), then Gazprom cabals could stand to loose out.

So far, Moscow is content to dabble in multilateral sanctions without actually doing anything that might push Tehran in a new direction. In practice, Russian support in the UN effectively means watered-down resolutions and a perpetuation of the status-quo. From Gazprom's perspective, this is a comfy arrangement since it keeps Central Europe over a barrel in the game of energy geopolitics. Senator Schumer and those like him would do well to remember this point.

Ryan R. Miller is a research analyst at the Center for European Policy Analysis (CEPA).

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Comments

June 24, 2008

ilyas m mohsin, ppp, Platinum Contributor (253)

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In today' energy-hungry world, no supplier would worry about competition. This applies squarely to Russia/ iran. Since both have the EU, China/ India etc as worried clients, strategic policy may not be hostage to the sale of neergy-based products.
It appears that Geography, generally, dictates the policy in such matters. Iran may be a pariah but it is is in the neighbourhood of Russia, shares the Arctic border and happens to be these days on the wrong-side of US. The region is already in turmoil due to the US misadventures in Iraq/ Afghanistan sparked by various factors, the latest being 'democracy'.
So Russia would like to balance her policy keeping the strategic aspect in the forefront. Moreover, it now co-ordinating with China and India on regional issues. Hence damned if you do and damned if you don't. However, it can act confidently as US is in a terrible-distress situation besides being branded as the 'occupation' power in the area in collaboration with NATO, to an extent..

June 24, 2008

Marek Swierczynski, journalist at TVP, Platinum Contributor (807)

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From the energy-gambling point of view Russia's Gazprom could be the only winner in case of any serious Iran standoff, let alone an all-out war. But for Russia other aspects seem to play a role also. If there is a strike on Iranian nuclear installations - be it by the US or Israel - a rise in radical islamic movements will be imminent. Russia has suffered a lot - not without its own contribution - from hands of islam driven mujahadeens and probably wants to avoid any such escalation. A temptation of enormous profits on fuel markets must be tamed by the vision of another Budionovsk, Dubrovka or Beslan. Americans must realise this, as they equally fear radical islamists. So for Russia, the best scenario, merging high profits with containment of islamic movements is preserving the status quo, ie. the state of "cold war" on Iran in which the country is beyond reach in terms of large gas deals but also not isolated or humiliated to the point of igniting a true jihad. America should be wise enough to judge what level of intensity of that "cold war" is acceptable, because it seems neither the US, NATO, and the EU are neither ready nor able to take the risk of cleaning the situation by a decisive military move.

June 25, 2008

Heinrich Bonnenberg, Energiewerke Nord
DGAP, Platinum Contributor (229)

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Each trouble between occident and orient influences the understanding between occidental and oriental ethnic groups in Russia. It weakens Russia. So also an attack of the West, inclusively of Israel, against Iran weakens Russia.

Russia is part of Pan – Europe. Russia is the European partner with energy resources as we the Germans and others are the European partners with technology and the English and others the European partners with banking and the Netherlands and others the European partners with trade and so on.
All Europeans have to want that Russia is well developing as the energy partner in Europe. We need them and they need us. We all have the same cultural roots. We all form a set.

The permanently repeated argument that Russia is heavily interested to dominate the other Europeans is used and used for wedging Europe.

Who is really interested to do that, particularly as Russia has to use all its power for solving so many internal problems?

I request more responsibility with respect to Europe, to Pan – Europe!!