Iran nuke agreement could backfire on Russia

By F. Michael Maloof

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WASHINGTON – The nuclear framework agreement’s easing of sanctions against Iran could pose problems for Moscow – one of the principle negotiators – with the consequent lowering of international oil prices adversely affecting Russia’s already depressed economy.

As negotiators were at their most critical point, March 30, in Lausanne, Switzerland, Russian Foreign Minister Sergei Lavrov quietly left.

If Iran and the Western countries can agree to the details of the framework by their June 30 deadline, sources say that it will lessen U.S. attention on the troubles of Iran and help Washington refocus on sanctions toward Russia over the Ukraine crisis.

“Russia tried its best to keep the Americans and Iranians apart,” according to Reva Bhalla of the open source intelligence group Stratfor.

Russia expert Pavel K. Baev of the Washington-based Jamestown Foundation said the “estimate of a sustained decline of prices by about a third from the current plateau of $50 to $60 per barrel looks conservative.”

“For the Russian economy, it would mean not only a deepening of the recession in 2015 below the World Bank forecast of 3.8 percent of GDP, but also the evaporation of any hope for growth in 2016,” Baev said.

The Russians, like the Iranians, need an international market price of $100 or more per barrel to sustain their economies. Baev noted Iran needs considerable investment in its oil industry infrastructure.

“(Russian) President Vladimir Putin keeps the government on the course of waiting the crisis out, but accumulating under-investment undermines the vision of Russia’s inevitable recovery,” Baev said.

“Meanwhile, the profound changes on the world energy market, accelerated further by the expected flow of hydrocarbons from Iran, leaves Russia, with all its difficult-to-extract resources, in limbo of indefinite depression,” Baev said.

Another source, who requested anonymity, affirmed to WND that Moscow can’t afford for Washington to “make nice” with Tehran.

In an effort to keep the Americans and Iran apart, Bhalla said Russia had offered to sell Iran advanced air defense systems aimed at any U.S. or Israeli threat to Iran’s nuclear facilities. Also, the Russians offered to help build additional civilian nuclear power reactors for Iran.

“The Russian plan all along was not to help Iran get the bomb, but to use its leverage with a thorny player in the Middle East to get the United States into a negotiation on issues vital to Russia’s national security interests,” Bhalla said.

“So, if Washington wanted to resolve its Iran problem,” Bhalla said, “it would have to pull back on issues like ballistic missile defense in Central Europe, which Moscow saw early on as the first of several U.S. steps to encircle Russia.”

Bhalla said things didn’t go according to the Russian plan, with a framework agreement on Iran’s nuclear program being reached, making the U.S. and Iran appear to be on a path toward normalization.

Meanwhile, Bhalla says, Moscow is trying to defend against the U.S.-led North Atlantic Treaty Organization’s buildup along the borders of the Russian Federation while managing an internal economic crisis attributed in large part to international sanctions as a result of Russian involvement in Ukraine.

“And the situation does not look any better for Russia on the energy front,” Bhalla said, as Moscow is losing revenues due to the depressed international oil market price simultaneously having an adverse effect on the Russian ruble.

One signal of the distance between Moscow and Tehran during the negotiations on the nuclear framework agreement was Iran’s turndown of an offer by the Russians to store the bulk of Iran’s enriched uranium.

There are indications, however, that Moscow may try go ahead and renegotiate its contract to sell the S-300 air defense system to Tehran if sanctions are lifted. Russia had declined to honor its prior contract due to Western sanctions, upsetting the Iranians, who never forgot the snub.

The hope is that such prospects will force Washington into negotiations on other issues of Russian interest, such as the deployment of an anti-ballistic missile system in Europe and the Russian offer to build more nuclear reactors in Iran.

Russia also may increase arms sales to other countries in the Middle East to maintain its influence in the Middle East, which Bhalla believes is waning.

“Russia’s influence in the Middle East is fading rapidly at the same time Europe is starting to wriggle out of Russia’s energy grip,” Bhalla said. “And as Russia’s options are narrowing, U.S. options are multiplying in both the Middle East and Europe.

“This is an uncomfortable situation for Putin, to be sure,” Bhalla said. “But a narrow set of options for Russia in its near abroad (policy) does not make those options any less concerning for the United States as the standoff between Washington and Moscow continues.”

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