As has been noted on this blog many times in the past, the Kremlin has been exceptionally effective in using its relationship with Iran to move markets to their benefit. Today, for example, the big upswing in oil prices is partly credited to the news that Russia will finally deliver its promised advanced anti-aircraft missile system to Tehran (the S-300), which will "dramatically increase its ability to repel an attack," said the defense minister.
But will Russia really commit this time? Or will it just be another tease, like the past interminable delays and excuses at the Bushehr nuclear reactor? As Stratfor has noted, the Russians are determined to maintain some wiggle-room with these commitments to Iran for various reasons:
Russia has been playing a complex game with Iran for years, promising to deliver nuclear technology but delaying the delivery. It’s the same with the air-defense system: the Russians now can follow the course they have taken with nuclear technology and finally deliver, or they can delay again. By playing this game they keep the Americans searching for a way to stop the delivery from happening, and keep the Iranians trying to look for ways to make it happen. This puts the Russians in the swing position, exactly where they want to be.
And on the supply of missile systems to Iran:
Russian weapons historically have been unable to block American air power, but that doesn’t mean they can be dismissed. During Vietnam and during the 1973 Arab-Israeli war, Soviet surface-to-air missiles were able to impose a significant cost on opposing air forces. By the same token, the S-300 and Tor-M1 would not make Iran impenetrable, but they would increase the cost of penetration and alter the U.S. calculus. Washington assumes air attacks will be attritionless, and there is a considerable political cost to having U.S. pilots captured. The bottom line is that the United States does not want these systems provided to Iran. The Iranians badly want them. And that gives Russia its negotiating position.
It's clear that Russia has an ability to generate geopolitical instability to benefit their interests and extract major concessions. Perhaps it is not surprising that Iran has been blind and powerless to the fact that Russia is intrumentalizing them in a bigger game with the West, and it may very well be their strategy to force Moscow's hand by making these announcements ahead of Russia - requiring them to bring their promises out of the closet.
Iran's strongest card to play against Moscow is of course natural gas, and they are certainly aware of its weight. Just yesterday Oil Minister Gholamhossein Nozari revived the issue of the Nabucco pipeline project, which Gazprom has worked very hard to destroy, most recently with the expensive Kazakh-Turkmen deal. He said "If Nabucco pipeline comes on stream, Iran will be the sole option for supplying its gas as the country is the world’s second-largest holder of natural gas. ... That’s why the new Nabucco pipeline which was proposed by Turkey for transferring gas supplies of Central Asia and Iran to Europe was welcomed by the energy ministers of Austria, Hungary, Romania, Bulgaria, and Turkey itself and that’s why the said energy ministers in a recent meeting have each taken up a 20% share for the establishment of the pipeline."
I wonder how these kinds of statements go over with Moscow? But it appears to be more than politics, as Reinhard Mitschekm, CEO of the Nabucco consortium, recently told the German newspaper Handelsblatt that the project could export gas from Iran as soon as 2017.
We have arrived at a point of rich irony: Iran can pressure Russia into delivering the missiles it wants and the nuclear energy it wants by threatening to supply the Nabucco with gas and partially break Gazprom's political grip on Europe. Who'd have ever guessed that Tehran could be the hero of European energy security? However I still see that as highly unlikely - Iran needs the friend that Russia has become, with or without the nuclear prize, and the Americans, hopelessly mired in Iraq, are likely to give Russia what it wants in exchange for managing the precocious Iranians.
If the oil markets have actually been affected by Russia's decision, it means the markets are saying that a reduction in U.S. ability to attack Iran puts the world's access to oil in jeopardy.
That would be an ironic conclusion, since it's the exact opposite of the Kremlin's position, namely that undermining U.S. power makes the world more secure, not less.
If the world thinks that Russia is arming Iran in order to carry out an aggressive plan of weaponizing energy resources and using them the way the USSR used its armies, it may well be right. That would mean urgent action, along the lines articulated firmly by John McCain, must be taken to block Russia's efforts to wage a new cold war.
What actions would those be? I've never heard anything but laundry lists about Russia from the well intentioned Senator....