Article
Japan’s revision of its three strategic documents reflects an intention to keep the United States engaged in the region while Japan fills any vacuums of U.S. power to preserve the Indo-Pacific order.
Ryo Sahashi
{
"authors": [
"Mikhail Krutikhin"
],
"type": "commentary",
"centerAffiliationAll": "",
"centers": [
"Carnegie Endowment for International Peace",
"Carnegie Russia Eurasia Center"
],
"collections": [
"Iranian Proliferation"
],
"englishNewsletterAll": "",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Russia Eurasia Center",
"programAffiliation": "",
"programs": [],
"projects": [],
"regions": [
"Middle East",
"Iran",
"Russia"
],
"topics": [
"Economy",
"Trade",
"Climate Change",
"Security",
"Military",
"Foreign Policy",
"Nuclear Policy"
]
}
REQUIRED IMAGE
Commentary
A Monkey Wrench, Made in Russia
Russia’s unconfirmed intention to buy Iranian oil throws a monkey wrench in the sensitive mechanism of negotiating a gradual easing of the regime of economic sanctions against Tehran.
By Mikhail Krutikhin
Published on Jan 13, 2014
It would have appeared a regular trading contract in other circumstances. Gazprom already buys LNG from producers all over the world and resells it, with profit, making overall statistical records of Russian gas sales appear larger that the country’s real volume of natural gas exports. And the shape the Russian oil industry is in begs for a similar scheme: officials at the Ministry of Natural Resources in Moscow admit that crude oil production of Russia may start falling after 2016 and recoverable reserves can last for about 17 years. Reselling third parties’ oil could help Russia remain on the global oil market.
It is the identity of Russia’s proposed partner that makes the planned deal conspicuous. According to unidentified sources quoted by Reuters, Russia intends to buy 500,000 bpd of crude from Iran, boosting the Islamic Republic’s current production by 50 percent.
Even if the leak from Moscow is merely a bluff, it does throw a monkey wrench in the sensitive mechanism of negotiating a gradual easing of the regime of economic sanctions against Tehran. The Russians are apparently demonstrating they can play a more important role in the Middle East and need to be reckoned with.
The price of the contract is estimated at $1.5 billion a month at the current oil prices, and Russia is going to pay for the oil with some “goods.” The unknown “goods” are anther alarming signal to the international community. Moscow and Tehran have a long history of energy trade well before both countries suffered a dramatic change of regimes: the monarchy was overthrown in Iran in 1979 and the USSR fell apart in 1991.
In the late 1960s—early 1970s Iran supplied natural gas to the Soviet republics of Armenia and Azerbaijan and the payment came in the form of industrial projects (such as the steel plant in Isfahan), but also in many types of weaponry, from anti-aircraft machine guns and military trucks to 130-millimeter M-46 canons and floating PT-76 tanks.
Post-Soviet Russia has little to offer apart from weapons and—an uneasy assumption—nuclear technologies. It exports mostly raw stuff, dominated by oil and gas, and next to no hi-tech machinery. Fossil fuels account for 70 percent of exports.
The limited scope of articles available for payment could be a signal that the report of the new deal with Iran is little more than a political game-spoiler.
Mikhail Krutikhin is a partner at the independent RusEnergy consulting agency.
About the Author
Mikhail Krutikhin
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Endowment for International Peace
- The Two Logics Driving Japan’s Security Policy
- Russia’s Rubber-Stamp Duma Elections Are Exposing Schisms in Putin's RegimeCommentary
In the discussions made possible by the State Duma election campaign, one question is being asked more and more loudly. “What next?”
Andrey Pertsev
- Coercive Nuclear Threats Under Domestic DissonanceResearch
A look at how public opinion influences the credibility of coercive nuclear threats,and how it enables and constrains strategies of nuclear coercion.
Lauren Sukin, Samuel Seitz
- Russia’s Best-Placed Political Émigrés Are Those With Nothing to LoseCommentary
While the Nazis rushed ahead in a revolutionary fervor, Russia’s modern crusaders against enemies of the state work methodically, giving their targets time to adjust to restrictions before closing the loopholes.
Leonid Bershidsky
- Is the Russia-Ukraine War Vibe Shift Real?Commentary
Media coverage suggests Kyiv’s fortunes have changed. That shift may be important, but it only goes so far.
Dara Massicot, Aaron David Miller, Andrew S. Weiss
