James Martin Center for Nonproliferation Studies
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CNS Research Story

17 February 2006

The Russian proposal that the key stage of nuclear fuel production for Iranian nuclear power stations be carried out on Russian territory was widely - and justifiably - regarded as the last hope for a peaceful resolution of a multi-year crisis over the Iranian nuclear program. That attempt has apparently failed, although the Russian government seems reluctant to accept this fact. The situation will most likely remain unchanged until early March 2006 - the next meeting of the IAEA Board of Governors. Following that meeting, Moscow will have to choose between several possible courses of action.

The likely parameters of Russian policy vis-à-vis Iran are the following:

1. Russia will continue to oppose uranium enrichment activities in Iran and will condemn them;

2. Russia will not support economic and/or political sanctions against Tehran, but will not seriously oppose introduction of such sanctions by individual countries;

3. Russia will continue economic and political cooperation with Iran outside the nuclear field; it will also complete the construction of the Bushehr nuclear power station and will supply fuel for it in line with earlier agreements with Iran;

4. Russia (as well as China) will continue cooperating with Iran in the context of the Shanghai Cooperation Organization.

5. Russia will oppose the use of military force against the Iranian nuclear program and will condemn such action;

6. A military operation by the United States and/or Israel will seriously hurt US-Russian relations and will revive security concerns created earlier by wars in Kosovo (1999) and Iraq (2003).

7. If Iran does not acquire nuclear weapons in the near future, Russia is likely to eventually resume full-scale cooperation with that country citing the precedent of US-Indian and US-Pakistani relations.

The Failure of the Russian Attempt

Under the Russian proposal production of nuclear fuel for Iranian nuclear power stations would have been divided between two countries. Iran would produce uranium tetrafluoride (UF₄) - an intermediate product in the enrichment process - which would then be sent to Russia, where it would be converted into uranium hexafluoride (UF₆), which would be enriched to produce low-enriched uranium, a product that is suitable for nuclear power plant fuel, but unusable for nuclear weapons. The low-enriched uranium would then be fabricated into fuel and sent back to Iran. Spent fuel would be returned to Russia. This proposal was designed to prevent Iran from developing a uranium enrichment capability, the crucial element of a nuclear weapons program.

This plan was designed to achieve several goals simultaneously:

1. Iran would not develop a nuclear weapons program;
2. Iran would escape possible sanctions or even military action by the United States and/or Israel;
3. Russia would be able to develop economic relations with Iran, including construction of additional nuclear reactors, arms trade, etc.;
4. Russia and China would continue to develop political relations with Iran, including within the Shanghai Cooperation Organization;
5. Russia would be well positioned to serve as a nuclear fuel producing agent for other countries;
6. Russia would prove its pivotal role in the international system and demonstrate the value of diplomacy vs. the perceived American preference for the use of force. The psychological component here was as important as the political or economic ones.

In spite of the public optimism of Russian officials, the proposal to Iran apparently never stood a chance. It is unlikely that Tehran ever seriously contemplated its adoption. Even when it was first tabled in December 2005, Iranian officials continued to demand that at least some uranium enrichment activities be conducted in Iran, that is, they insisted on having the full nuclear fuel cycle and only agreed to have it on a somewhat smaller scale.

Furthermore, Iran announced the resumption of research activities in enrichment before the first full-scale visit of a Russian delegation to Tehran for a detailed discussion of the Russian proposal: the announcement was made on January 3, 2006, while the visit of the delegation was scheduled for January 7. Had Iran been even remotely interested in the solution offered by Moscow, it would have first listened to the delegation; apparently, the decision had already been made.

The only compromise Iran has so far been prepared to accept concerns the scale of uranium enrichment activities, not enrichment itself. Apparently, it was also prepared to contemplate a joint venture with Russia and possibly China as well, but that joint venture would still produce fuel on Iranian territory. Tehran probably hoped that participation of foreign states would make uranium enrichment in Iran more acceptable to the international community.

Although Russian officials continue to insist that negotiations still stand a chance, available information suggests that Moscow's last hope rests on Iran's domestic politics, namely, that the spiritual leader of Iran, Ayatollah Ali Khamenei, and former president of Iran Ali Hashemi Rafsajani force current Iranian president Mahmoud Ahmadinejad to change course, and alter his radical "pro-nuclear" position. It appears that barring a domestic change, chances for a diplomatic solution are close to nil.

Constraints of Russian Policy

The central motive underlying Russia's approach to the ongoing crisis is support for the nuclear nonproliferation regime. Russia certainly does not want to see Iran become a nuclear weapons state and is concerned that the nuclearization of Iran might trigger a wider breach in the regime as more states are likely to follow suit.

In addition, Russia sees considerable value in stable relations with the United States and Europe and will try to at least avoid conflict over the Iranian nuclear program. It has been a consensus view of the vast majority of Russian officials, non-governmental analysts, and the media that if Russia is presented with a choice, it will have to abandon Iran and take the side of the United States, in one way or another.

There are limits, however, to how far Russia is prepared to go to prevent the nuclearization of Iran. There are other important interests associated with Iran:

1. Russia (as well as China) has a strong long-term interest in political cooperation with Iran through the Shanghai Cooperation Organization; to a certain extent Iran is regarded as part of the broader Eurasian region, which includes, among other nations, the Central Asian states. Iran is also an important element in Russia's policy toward the South Caucasus and the Caspian Sea.
2. Economic interests in Iran are quite significant and include practically all areas important for Russia. Russian exports totaled $2 billion in 2005 and eventually could reach $10 billion. For Russia, however, the value of trade with Iran goes beyond these figures: Russia exports machinery and technologically advanced products, which do not find a market in developed countries, to Iran. Therefore Iran, along with a small number of other states, plays an important role in supporting Russian machine-building and associated industries.
3. Iran's opposition to US global dominance is a source of implicit sympathy toward that country. Russia has always been uneasy about the US role in the world, especially after the recent series of military campaigns and two stages of NATO enlargement, as well as US support for "colored revolutions" in the former Soviet Union, which brought to power regimes openly unfriendly to Russia.

The latter variable plays an important role in shaping the psychological context of policymaking with regard to Iran and the ongoing crisis. It is widely believed that Tehran's security concerns are genuine and that nuclear aspirations have been at least in part dictated by these concerns. US policy is also at least partially blamed for the election of a hard-line president, Mahmoud Ahmadinejad. Many in Russia can, to a certain extent, identify with Iran's confrontation with the United States and thus feel a degree of sympathy toward that country.

Prospects for Russian Policy

It seems unlikely that a peaceful resolution to the crisis over the Iranian nuclear program will be achieved before or at the meeting of the IAEA Board of Governors in early March 2006. If the crisis continues and is fully transferred to the UN Security Council, Russia will need to make difficult choices in the near term with regard to its position vis-à-vis both the United States and Iran, first and foremost whether it will support the likely US proposal to introduce sanctions against Tehran. The first victim of these sanctions will be a Russian arms sales contract worth $1 billion, and perhaps also production of fuel for the Bushehr nuclear power plant.

Undoubtedly, Russia will strongly condemn Iran - the condemnation caused as much by the intractable, unconstructive position of Tehran as by the futility of Russia's own efforts to resolve the crisis (Iran's "refusal to be saved" is perhaps the strongest irritant in bilateral relations today). It is unlikely that Moscow will go beyond condemnation, however.

The maneuvering in the run-up to the IAEA meeting has already demonstrated that Russia will oppose sanctions and is already trying to line up support in Europe in favor of the continuation of diplomatic efforts. Moscow is likely to insist that negotiations be continued and the issue be left in the hands of the IAEA, perhaps with regular reports to the UN Security Council.

The greatest concern for the Kremlin is a possible military operation by the United States and/or Israel - the bombing of Iran's nuclear infrastructure. It seems that the likelihood of this option is seriously overestimated in the Kremlin and is seen as almost inevitable. In the Russian view, such action would not seriously harm Iran's nuclear program and would instead strengthen Iran's determination to acquire nuclear weapons and provoke an Iranian withdrawal from the Nuclear Nonproliferation Treaty.

Even worse, a military action against Iran would mean yet another war close to Russia's borders and a deeper destabilizing of the entire region, which could negatively affect Russia's interests, influence, and security. It is also feared that in the context of a military operation against Iran - or even just as a means of pressuring that country - the United States might establish bases in Azerbaijan and/or Georgia. The latter is likely to have a particularly negative impact upon US-Russian relations.

If the United States undertakes a military action against Iran, Russia will most likely remain on the sidelines much as it did during the 2003 war in Iraq: it will not support Iran in any way, but will not support the United States either. Instead, it will try to deny the United States the sanction of the UN Security Council and will strongly condemn US actions. The impact of such an operation on US-Russian relations - barring the above-mentioned appearance of US bases in the South Caucasus - will be short-lived, however, and, as before, Russia will rather quickly return to the status quo ante in its attitude toward the United States.

If the United States and/or Israel do not undertake a military action against Iran, much in Russia's policy will depend on Tehran's own behavior. Early acquisition of nuclear weapons by that country will lock Moscow into at least political opposition to Iran for a rather long time and will derail its broader geopolitical and economic plans. If, however, Iran proceeds cautiously and limits itself to a civilian nuclear program, this would be seen by Moscow as a confirmation of the sincerity of its earlier statements about peaceful intentions. In that case, Russia will move to fully restore and develop its relations with Iran within the next year or two.

Interestingly, the same might eventually happen even if Iran acquires nuclear weapons, although the reestablishment of relations will take more time, perhaps five-seven years: there are too many other interests that compel Russia to closely work with Iran. The Kremlin will then cite the example of India and Pakistan, whose nuclear status does not prevent them from being bona fide members of the international community and, more specifically, does not prevent close cooperation between these countries and the United States. Of course, in relations with a nuclear Iran Russia will remain cautious and will harbor suspicions with regard to Iran's long-term intentions, but cooperation on a wide range of international political and economic matters will nevertheless be highly likely.

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