Russia and Iran's relationship deepens

RUSSIA / FSU POLITICS - In Brief 06 Nov 2022 by Alex Teddy
On November 5 Iran said it sold military drones to Russia but claims that was only before the Russia-Ukraine War began. Western countries have imposed additional sanctions on Iran, claiming that Iran sold drones to Russia in September 2022. Iran and Russia are both suffering from sanctions. They are trying to help each other with this. In 2022 there has been an extraordinary amount of diplomatic activity between Russia and Iran. Putin visited Iran. Russia is keen to demonstrate that it is not friendless. Gazprom wants to invest USD 40 billion in Iranian oil and gas. Iran wants to sell spare parts for vehicles and planes as well as sell vehicles to Russia. Russia is having trouble with these sectors. Flights between Iran and Russia have increased. Trade between the two nations was USD 4 billion in 2021. Iran says it is nearing USD 6 billion in 2022. But that is still under 1% of Russia's foreign trade. By contrast Russia and Turkey do USD 30 billion worth of trade each year. Turkey is hostile to Iran so Russia dares not be too cordial with Iran. Likewise, Russia has a fairly good relationship with Saudi Arabia. Moscow does not want to be too amicable with Iran lest this alienate the Saudis. Iran's civil aviation industry is struggling because of sanctions. Iran's car manufacturing sector is also struggling. Iran has stopped building some models due to their inefficiency.  Russia needs pharmaceuticals and construction materials, and Iran produces these in large quantities.  Trade with Iran is difficult because Iran does not have enough hard currency. The country is in deficit and finds it very hard to borrow abroad. Iran still owes Russia USD 500 million for building the...

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