What is the reason for Russia’s lack of investment in Iran?
What is the reason for Russia’s lack of investment in Iran? According to Iran Gate, after the Islamic Republic’s involvement in the Ukraine war on the Russian front became evident, Europe also took action and imposed extensive sanctions against Iran. This happened under circumstances where the European Union had not taken such measures for more than a decade, trying to resolve mutual issues through diplomatic means. However, the Islamic Republic’s intervention in the Ukraine war changed everything, leaving Tehran and Moscow stuck in Putin’s self-created quagmire.
After the European Union adopted very harsh positions against the Islamic Republic’s interventions in the Ukraine war, Raisi’s government increasingly and excessively sought refuge in the Kremlin. This issue became so serious that Putin came to Tehran and promised a $40 billion investment in Iran’s energy sector. Now, more than six months after Vladimir Putin’s visit to Tehran, there is no sign of Russian rubles in Iran’s economy. What is the reason for this, and why does Russia, despite Tehran’s proven loyalty to Moscow, still lack the will and motivation to invest in Iran?
Investment aside, Moscow is creating obstacles.
Experts emphasized from the very first days of the Ukraine war and the intensified discussions about Iran’s return to the energy market that Putin would not allow Tehran to do so, as this potential action by the Islamic Republic would effectively nullify Russia’s export cut to Europe. Although some believed that the scenario of a harsh winter would soon materialize, and if Iran cooperated with the Kremlin to implement Russia’s plans, it would certainly receive a good reward from Moscow.
But time passed, and contrary to what the hardliners promised, there was no news of a harsh winter in Europe either. Now, Moscow is under severe pressure. With the decline in oil prices in global markets, the challenge of earning income from the energy market has made the Kremlin less inclined than ever to invest in Iran. Of course, this is not the only reason for the Russians’ reluctance to spend rubles in Tehran, but if there was even the slightest hope for this scenario to materialize, given the debunking of illusions like the harsh winter, this hope has completely faded.
How Moscow snatched Beijing and Delhi.
But this situation has not only resulted in the lack of investment by Russian companies in Iran; rather, given the challenges of earning revenue, Moscow is witnessing extensive obstacles from the Kremlin and Russian oligarchs to Iran’s entry into global energy markets. Among these obstacles is the entry of Russia’s Gazprom into markets like India and China, which were almost exclusively controlled by Iran before.
On the other hand, the very heavy discounts offered by the Russians have naturally led Indians and Chinese to be much more inclined to replace Iranian companies with Russian ones. Some sources report discounts of 30 to 40 percent offered by the Russians in the energy market to Chinese and Indian customers. Meanwhile, Tehran was forced to sell oil with a discount of about 15 to 20 percent to buyers due to extensive sanctions. However, with the level of discounts that Russia has introduced in the market, Tehran is effectively eliminated from the competition.
Erdogan’s orchestration without a drop of oil.
The developments resulting from the Ukraine war and the changing dynamics in the energy market have led to new players taking on roles in this arena. Among the most important of these new players is Turkey. Turkey, which does not even have a single exploitable oil and gas field, has now become one of the most important orchestrators in the energy market.
Some experts even believe that the change in the gas transfer regime between the Middle East and Europe has effectively turned Turkey into the largest energy hub in the Middle East. This is because Europeans, after the Ukraine war, were forced to replace countries like Qatar and the UAE with Russia. Therefore, it was predictable that Turkey would play a pivotal role as the most important intermediary in this regard.
Swap was also a mirage.
This issue has also caused Iran’s only opportunity to capitalize on the opportunity created by the Ukraine war to be lost. On the other hand, Russia had promised that Iran would act as an intermediary to swap Russian oil and gas to Pakistan and even India. However, the news that has emerged on this matter shows that Russia has found other ways to export energy to Iran’s eastern neighbors, effectively excluding Tehran from this loop.
What’s happening with the Russian oligarchs?
Given the described situation, it can be said that Ebrahim Raisi’s government not only did not gain any benefits from cooperating with Russia on the Ukraine front, but also lost its precarious position in the energy market, which had been maintained with difficulty after the U.S. withdrawal from the JCPOA. The Russians, of course, will not take the slightest step towards returning Iran to its previous status.
Because, as mentioned, this return would mean a significant reduction in Russia’s income in wartime and crisis conditions. To understand this situation, one does not need to be an energy expert; it is quite clear that even if the Russian oligarchs are interested in entering the Iranian market and exploiting our country’s resources, it is the Kremlin that will not allow them to do so.
