A Russo-Iranian Plot to Turn the Tables on the West
On July 19, Russian President Vladimir Putin arrived in Iran on an official visit and held meetings with its President Ebrahim Raisi and its Supreme Leader Ali Khamenei. There are substantial grounds to believe that during those meetings a plot has been hatched to upend the West’s “ maximum pressure “ strategy which involves the levying of heavy economic sanctions on the two countries as well as on their ability to procure new armaments.
The plot, it now appears, is driven by two main elements. First, the weaponization of Gazprom—the Russian state-owned multinational energy behemoth—as the primary tool employed to realize the goals of this plot.
Second, intensify the pressure for the conclusion of a new nuclear deal with Iran which would also involve the lifting of Western sanctions on the exportation of its oil and gas.
Apparently the initial grounds for the plot were being laid already in May. That month Russian Deputy Prime Minister Alexander Novak arrived for talks in Tehran. The Russian news agency Interfax quoted him as saying
“We discussed the issue of supplying energy resources to the north of Iran so that logistically, Iran (since all its production facilities are located in the south) would not need to supply the north of the country. In turn, it will be easier for us to use for sales their products that are formed in the south, which is closer to our markets.”
Accordingly, Iran would import Russian crude off its northern Caspian coast and then sell an equivalent amount of crude in Iranian tankers originating from the Persian Gulf to Asia-Pacific markets. Iran will refine the Russian oil to meet its domestic demand, and once a nuclear deal is reached, Iranian oil exported from the south will be exempt from sanctions.
In a nutshell the swap foresees Russia shipping its energy to northern Iran, while similar quantities of Iranian oil and gas are exported to the Asia-Pacific region from the south.
Once this framework was put in place implementation of the plot began in earnest. Within a week of Putin’s visit to Iran, on July 25, Gazprom announced that it would reduce “the daily throughput” of the Nord Stream 1 pipeline to Germany to 33 million cubic meters alleging it was shutting down for equipment repairs. The net impact was to cut gas supplies to Europe to 20% of capacity.
German officials were clear eyed in assessing the Russian move: “Putin is playing a perfidious game,” German Economy Minister Robert Habeck told the European news agency dpa. “He is trying to weaken the great support for Ukraine and drive a wedge into our society. To do this, he stirs up uncertainty and drives up prices.”
The Russian coup de grace followed soon after. On August 30, Gazprom announced the indefinite suspension of all gas deliveries to Europe citing an oil leak it supposedly detected at the Nord Stream 1 Portovaya compressor station.
When Russia announced its intention to restrict supply in July, within a day it had pushed up the wholesale price of gas in Europe by 10%. Gas prices are now approximately 450% higher than they were this time last year. Not surprisingly, the Euro zone inflation rate hit a new record high in August at 9.1% with the largest component of this rise named as a 38.3% increase in energy prices. A slowdown in European economies looks inevitable and an accelerated pace toward a continental recession may have begun and may take effect this winter. The only question remaining may be how deep it will be and how long it will last.
Putin certainly is having his revenge. Not only is he punishing the European Union for its support for Ukraine, he may expect some of its members ( Hungary in particular) to peel off and search for a separate energy deal with Moscow. As energy scarcity continues to grow he may even hope for civil unrest to erupt in some countries, particularly in Germany, the continent’s largest economy, whose reliance on Russian gas amounts to just over half (55%) of the gas consumed there— the heaviest among the European countries.
However, for now this has only been a win for Putin. For the plot to work and the grand scheme to succeed the mullahs in Tehran have to win as well. The Russo-Iranian stratagem fully envisions that as the energy and economic crises in Europe worsen pressures among the Union’s members and on Washington to reach forthwith a nuclear deal with Iran would mount dramatically. European nation would see a new agreement as their best hope for lifting the Iran sanctions and for Iranian gas and oil exports to resume in full volume thus alleviating their predicament. Such an outcome will not only boost the Iranian economy, with billions of dollars flowing in, but enable the Russian-Iranian swap deal to finally materialize.
Little wonder that the Russian permanent representative to international organizations in Vienna ( where the negotiations over the nuclear deal have taken place) Mikhail Ulyanov noted in a tweet on August 17, that “There have been reasons for optimism before, but on previous occasions expectations were not met. This time more than ever we have a great chance to cross the finish line at the #ViennaTalks. The final result depends on how the #US reacts to the last Iranian reasonable suggestions. Let’s hope that it doesn’t take long for Washington to consider these proposals.”
But, if the Russo-Iranian plot succeeds the West’s “maximum pressure “ strategy would be overturned and both Russia and Iran economic and security interests substantially advanced to the detriment of the free world. Of greatest concern, once the plot ends up forcing the West to sign the “ reasonable” Iranian offered nuclear deal it would amount to a de-facto endorsement of the mullahs scheme to acquire nuclear weapons a few years down the road.