A top-level Russian government and business delegation heads to Tehran on Monday for a three-day mission aimed at boosting trade between the two countries, as sanctions on Iran are poised to be lifted next year.
The meetings will be held at the Russian National Industrial Fair in Tehran through Wednesday, and will be hosted by Denis Manturov, Russia’s minister of industry and trade.
“It is hard to overestimate the strategic importance of Iran in the political, economic and geographic context,” Mr Manturov said in a statement released by the ministry.
Although the two countries have had a contentious relationship over the years, Iran and Russia already have deep trade relations. Russia was responsible for delivering Iran’s controversial US$10 billion Bushehr nuclear plant, which became the first in the region to become operational in 2011.
Atomstroyexport, Russia’s nuclear industry umbrella company, is keen to build more reactors in Iran. Last year, the two countries signed agreements to build an additional eight reactors, with Russia also supplying the fuel.
On Saturday, the head of the Atomic Energy Organization of Iran (AEOI), Ali Akbar Salehi, said Iran had agreed to export nine tonnes of its enriched uranium to Russia “in the coming days”. He did not give the terms of the deal but it is aimed partly at meeting the conditions of lifting sanctions.
“The [nuclear] fuel exchange is going on well,” Mr Salehi said.
“Iran has imported 137 tonnes of ‘yellowcake’ [a type of uranium concentrate] from Russia and will export about nine tonnes of its enriched uranium to Russia in the next few days,” he said in Tehran, according to the government’s Islamic Republic News Agency.
Russia’s trade with Iran took a hit from the nuclear-related sanctions. Russia’s exports to Iran grew from about $250 million in 1995 to $3.4bn in 2011, before halving to $1.2bn by 2013. Iran’s exports to Russia carried on growing, however, from $21m in 1995 to $351m in 2011 and $433m in 2013.
Russia is also looking to diversify its food supplies, partly in reaction to sanctions the West imposed because of its continuing conflict with Ukraine.
Sergei Dankvert, the head of Russia’s food sector overseer Rosselkhoznadzor, also is scheduled to visit Iran this week and will meet the head of the Iranian veterinary organisation to discuss “mutual supplies of meat and dairy produce”, Reuters reported.
Russia is keen also to boost arms exports to Iran. The country’s exports of weapons to Iran were worth just $26m for 2013 and last year combined, according to the Stockholm International Peace Research Institute. That compared with $368m of arms sales to Iraq for the same period.
Russia’s Gazprom also is keen to take part in a revitalisation of Iran’s oil and gas sector. Despite rivalling Russia as holder of the world’s largest gas reserves, Iran is still a net gas importer because of chronic underinvestment in its sector.
Russia would like to play a role in Iran’s gas sector to mitigate its potential to compete for markets in Europe and Asia.
Russia-Iran relations face some obstacles, according to Mark Katz, professor at George Mason University who writes for the US Institute of Peace.
“Moscow agreed to sell the S-300 air defence system to Iran, but then cancelled the deal in 2010,” Mr Katz pointed out.
“Although Moscow reversed this decision in 2015, it is not clear when – or even whether – Tehran will actually receive these Russian weapons.”
There is also a territorial dispute. “The two countries have been unable to resolve their differences over how to delimit the Caspian Sea, which affects dividing up everything from its petroleum resources to its caviar,” said Mr Katz.
In any event, the Russian companies on this week’s mission will cover a wide range of industries and will include United Aircraft Company, United Engine Corporation (Rostec), GAZ Group, RT-Chemcomposite (Rostec), and Russian Helicopters (Rostec).
Iran will be represented by high-ranking officials including vice president Sorena Sattari and Mohammad Reza Nematzade, the industry, mining and trade minister.
amcauley@thenational.ae
