Nuclear deal will give Iran-Russia ties limited boost

Significance

Russia played a high-profile role mediating the landmark Iran nuclear agreement announced on July 14. As such, the deal represents a diplomatic victory for Russia and its aim of preventing Iran from acquiring nuclear weapons. The deal also offers the prospect of increased opportunities for Russian business, and for Russian diplomacy in the Middle East, particularly Syria. However, the agreement also raises concerns in Moscow that Iran's detente with the West will weaken Russia's political and economic ties with the Islamic Republic, and see Moscow lose a valuable ally in its stand-off with Washington.

Impacts

• Russia will try to strengthen cooperation with Iran within the Eurasian Economic Union framework.
• Potential for cooperation in oil and gas will be limited, although Moscow will try to coordinate energy policies with Tehran.
• Return of Iranian crude to global markets will dampen prices further, increasing Moscow's economic woes.
• Russia will use promised delivery of air defence systems to Iran as a bargaining chip in its stand-off with the United States.