A Stronger Alliance:

Russia and Iran have become increasingly interdependent as a result of mutual efforts to overcome Western sanctions. This has bolstered already strong relations between the two countries, which signed a deal to finance and build the Rasht-Astara railway, a crucial transport corridor linking India, Iran, Russia, Azerbaijan, and other states via railway networks and sea routes. Some argue that this railway will rival the Suez Canal as a key global trade route. VTB, Russia’s second-largest bank, previously opened a representative office in Iran, as the "anti-sanctions alliance grows." On the security front, Iran has become Russia’s key arms supplier, and has provided Russia with hundreds of drones, artillery, and tanks since mid-2022. What are the pillars of Russia-Iran relations? What are the ramifications of these developments for regional neighbors, and where might this cooperation lead in the future?

The first pillar of this partnership is shared experience and mutual understanding at the leadership level. Nikolay Kozhanov has argued that "personal relations between the Russian President Vladimir Putin and Iran’s Supreme Leader Ali Khamenei should not be overlooked." Putin visited Tehran in 2007 and discussed a potential strategic partnership. During his second visit to Tehran in 2015, Putin’s symbolic gift to the Supreme Leader was the Holy Qur’an. The two leaders espoused similar views and agendas: In July 2022, Khamenei echoed the Kremlin’s discourse regarding the Russian invasion of Ukraine. In January 2022, during the build-up to the Ukraine crisis, Iranian President Ebrahim Raisi visited Moscow and met with President Putin. Raisi called for closer collaboration to counter pressure from the US, stating that his country understood its counterpart’s situation because Iran had "stood up against US sanctions" for forty years. He continued: "Today’s exceptional circumstances require significant synergy between our two countries against US unilateralism."

At the same time, as Abdolrasool Divsallar has noted, Khamenei and Putin both faced unprecedented domestic instability during 2022. They responded with domestic security cooperation that is at odds with Western values of democracy and human rights, but unites Iran and Russia at both global and bilateral levels. The security sphere is a key foundation of this relationship, which Divsallar characterizes as "standing back-to-back for regime security."

Second, mutual chemistry and relatively longstanding relations—in comparison to more recent working relationships with GCC states—has also fostered closer cooperation between Russian and Iranian political elites. However, the Iranian and Russian people have more limited knowledge of each other’s worlds. For example, Julia Zotova has studied "the image of Russia and Iran in history school textbooks of the two countries" in order to shed light on these "mutual perceptions" in contemporary context.  Zotova found that Russian history is given much more attention in Iranian schools than Iran is given in Russian textbooks. Contemporary Russians have very little idea of their southern neighbor. In Russian textbooks, Iran is given so little attention that it is difficult to say whether it is portrayed in a positive or negative light.

Ongoing sanctions are also a key driver for closer cooperation between the two countries. Iran and Russia have sought to more closely link their banking and financial systems, and have begun to use both national currencies for energy and trade payments. In December, Russia’s second-largest bank, VTB, became the first Russian bank to offer money transfers in Iranian rials. According to Russia’s Kommersant newspaper, the bank will charge a one percent commission for moving up to $300,000 USD (20 million rubles) to an Iranian bank account, with the transfer completed in one business day. This move is not surprising, since Russia has strategically deployed "de-dollarization" and has been shifting away from relying on the US dollar as the primary currency for financial transactions since 2014.

Iran has become instrumental in this process of de-dollarization as it also seeks to avoid stringent sanctions imposed by the West. In 2021, prior to the Ukraine war, Irina Khominich and Samira Alikhani of the Plekhanov Russian University of Economics argued that since both Iran and Russia were under sanctions, they could support each other’s development by pursuing strategies such as reducing dependency on the dollar, developing bilateral economic relations, and avoiding trade barriers. The recent wave of sanctions by G7 countries resulted in Elvira Nabiullina, head of the Central Bank of Russia, making an exceptional, urgent visit to Tehran to meet with the governor of the Central Bank of Iran. The two discussed bilateral trade, banking cooperation, and expanding currency transactions between Russia and Iran. This meeting deserves closer attention for several reasons. This was the first time that the head of Russia’s Central Bank visited Iran. Nabiullina’s involvement was also notable as a rare instance of a Russian woman’s involvement in diplomacy.

Furthermore, as a Tatar Muslim, Nabiullina chose to wear the hijab during the meeting out of respect and as part of her Muslim identity. This focus on shared Muslim identity has also proven to be an effective tool in Russia-GCC relations.

Strategically, both countries are also united under "Look to the East" policies. This means they are developing closer links with countries to the east, especially China. In March 2021, Iran and China signed a far-reaching economic and security partnership. In April 2023, Iran will officially join the Shanghai Cooperation Organisation (SCO), which is headed by Russia and China. The Ukraine war has thus brought bilateral collaborations to "new levels." While Nabuillina travelled to Iran, Russian Prime Minister Mikhail Mishustin signed a series of bilateral agreements to deepen investment in trade, promote agricultural exports, and boost sports cooperation as an immediate response to the new wave of sanctions.

These stronger bilateral ties will result in the two countries becoming increasingly dependent on each other. Russian and Iran must both must weigh the benefits of this relationship against the risks of sacrificing their own interests or ties with other countries. Although GCC states welcome the China-brokered Iranian-Saudi deal, there are still concerns about Iran’s nuclear program. As Hanna Notte put it: "Don’t expect any more Russian help on the Iran nuclear deal." She explained that "Moscow’s growing ties with Tehran are reducing both the Kremlin’s ability and willingness to nudge Iran towards accepting a renewed nuclear deal or to publicly criticize Iran." At the same time, Russia’s traditional sphere of influence could be challenged by Iran, including in the South Caucasus.

With recent troubles in Nagorno-Karabakh, Azerbaijan-Iran relations have deteriorated. This has brought Armenia and Iran closer together, and exacerbated hostilities with Russia, which Azerbaijan relies upon to defend its security. This situation opens up opportunities for Iran to gain influence in a strategic region. As the Ukraine war continues, a stronger alliance between Iran and Russia will make the latter more reliant on the former. Russia might also turn a blind eye to Iranian foreign policies, which could raise concerns among its neighbors. At the same time, GCC states are strategic economic partners for Russia. Given the prospect of a Saudi-Iranian deal, this might suggest that a Russian-Iranian alliance would primarily challenge the West, rather than Middle Eastern partners.