Strategic Comments

ISSN: (Print) 1356-7888 (Online) Journal homepage: http://www.tandfonline.com/loi/tstc20

Iran’s Eastern strategy

To cite this article: (2018) Iran’s Eastern strategy, Strategic Comments, 24:9, viii-ix, DOI:
10.1080/13567888.2018.1557845

To link to this article: https://doi.org/10.1080/13567888.2018.1557845

Published online: 11 Dec 2018.

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 Strategic Comments
Iran’s Eastern strategy
The Trump administration’s withdrawal
of the United States from the Joint
Comprehensive Plan of Action (JCPOA)
– commonly known as the Iran nuclear
deal – and renewal of economic sanctions
significantly limits trade between Iran and
European countries. The United States’ new
policy towards Iran is explicitly designed
to provoke change in Iran’s internal,
regional and global behaviour, as well as
(at least implicitly) regime change in Iran
itself. Whatever the endgame, the deep
entrenchment of Iran’s revolutionary
theocracy and ‘forward defence’ strategy
makes the Trump administration’s
objectives difficult to achieve. Iran also has
options that could ameliorate the effects
of punitive US policies. In particular, Iran
is likely to rely increasingly on its Asian
partners and Russia to avoid economic
collapse and ensure the survival of the
Islamic republic.
This approach does not represent a
radical break with past Iranian strategic
thinking. From the outset of the Islamic
Revolution of 1979, Iran’s overarching
foreign-policy guideline has been ‘neither
East nor West’. In reality, however, Iran
has always been orientated more East than
West, by both necessity and design. Faced
with the economic consequences of Western
containment policies, in February 2018
Supreme Leader Ayatollah Ali Khamenei and
the clerical establishment resurrected Iran’s
‘Look East’ policy, which originated under
then-president Mahmoud Ahmadinejad
in response to Western sanctions between
2005 and 2013 and is directed at improving
ties with Russia, China and India. At
the same time, to achieve foreign-policy
independence, Tehran has also employed
harsh anti-US ideological rhetoric that has
impeded Tehran–Washington relations,
although the Trump administration’s
hostility to the Iranian regime has made
the anti-Americanism of Iranian hardline
factions seem more understandable.
Accordingly, Moscow, Beijing and New
Delhi now appear more flexible in balancing
their geo-economic interests between the US
and Iran.
Naturally, Iranian strategy will have to
take into account Russia, China and India’s
strategic outlooks. The three countries will
have to balance their geo-economic interests
with the US on one hand and Iran on the
ISSN: 1356-7888
other. Russia’s main priority vis-à-vis Iran
will be regional stability in the former
Soviet space – that is, Central Asia and
the South Caucasus – as well as in Syria.
India’s chief concerns are the construction
of the Chabahar port in southeastern Iran
and bilateral energy cooperation with Iran.
China will focus on its economic relationship
with the US and the integration of Iran into
China’s massive Belt and Road Initiative
(BRI). The three countries are likely to use
their cooperation with Iran as leverage in
their respective bilateral relationships with
the Trump administration.
The Russian dimension
Since the 1979 revolution, Iran has often
been obliged to rely on Russia despite
having good reasons to mistrust it. There
are competitive aspects of two neighbours’
relationship, particularly in the energy
field, but Iran is not and has never been a
big gas exporter, and with respect to the
European gas market, Russia has more to
worry about from Azerbaijan, Turkmenistan
and indeed the US. More broadly, each side
has concluded that, as near neighbours,
they should try to get along. They have
common cause regarding the Caspian
vis-à-vis perceived Turkic interlopers,
and a shared interest in the stability and
geopolitical orientation of the South
Caucasus. Russia is, additionally, Iran’s best
hope for protection in the United Nations
Security Council.  In September 2016,
Russian President Vladimir Putin offered
some public support for Iran’s return to
the international oil market, and Moscow
is now adopting a more cooperative policy
vis-à-vis the Organization of Petroleum
Exporting Countries (OPEC). Nevertheless,
Russia’s support for OPEC’s decision to
pump more oil in June 2018 (in order to
compensate for the reduction of Iranian oil
exports following the return of US energy
sanctions) provoked an internal debate in
Iran. Reformist factions believe this decision
highlights Russia’s unreliability as a partner.
Conservatives downplay such divergences
between Iran and Russia in the interest
of advancing the paramount objective of
building a strategic partnership with Russia.
That said, the characterisation of the
Iran–Russia relationship as a strategic
partnership is something of an exaggeration.
For instance, in 2015 the two governments
unrealistically set a target for bilateral trade
of US$10 billion–15bn per year, when the
actual level has been US$1bn–3bn annually
since 2011. Even so, economic ties are
growing stronger. The provisional free trade
agreement signed in April 2018 between
Iran and the Eurasian Economic Union
could substantially boost Iran–Russia trade.
This economic cooperation is politically
driven, but also sometimes inhibited by
political considerations. A good example
is Iran’s reluctance to use the oil-for-goods
mechanism established between Iran and
Russia. After an initial exchange of at least
one million barrels of Iranian oil for Russian
goods in 2017, talks to implement another
exchange of 5m barrels of oil from Iran
have not yet been finalised despite the
implementation of a US embargo (effective
as of 5 November 2018) against Iranian oil.
Russian multinationals are also sensitive
to US economic pressures. The Russian
oil company Lukoil abandoned its Iranian
projects during the implementation of US
sanctions under the Obama administration
from 2011–13, and again when the Trump
administration decided to re-impose those
sanctions. Even so, on the whole Russian
companies are less exposed to US market-
share pressure than European companies,
and some could benefit from the US
withdrawal from the JCPOA. For instance,
Iran Aseman Airlines signed a deal to buy 20
Sukhoi SuperJet 100 planes, mainly because
of the US withdrawal and despite Iran’s
general preference for Western technology.
Politically and to some extent militarily,
Tehran and Moscow have extended their
area of cooperation beyond the former Soviet
space towards the Middle East, especially
since the outbreak of civil war in Syria,
where Russian and Iranian geopolitical
and counter-terrorism interests are closely
aligned. The Syrian-Iranian-Russian military
partnership is still domestically unpopular,
as demonstrated by Iranian protests at the
end of 2017 and the beginning of 2018, when
demonstrators chanted slogans such as
‘leave Syria alone, think about us’ and ‘death
to Hizbullah’. Furthermore, the relationship
is hardly a strategic alliance, as Russia’s
warm relationship with Israel – Putin and
Israeli Prime Minister Benjamin Netanyahu
met nine times between July 2016 and May
2018 – negates Moscow’s partnership in
any larger ‘Shi’ite axis’. But Iran has to an
Volume 24 Comment 36 November 2018
extent been able to cast Russia’s need for
partners in the fight against Sunni jihadists
as a pretext for maintaining its intervention
in Syria.
China’s position
As a signatory, China supports the JCPOA,
and is opposed to Iran’s acquisition or
development of nuclear weapons and to
any moves by Iran that would impede the
free transport of oil in the straits of Hormuz
or Bab el-Mandeb. Beijing also opposes US
sanctions targeting Iran’s oil and financial
sectors as well as US military action
against Iran. Accordingly, China has clear
strategic reasons for helping Iran continue
complying with the deal in particular, and
for maintaining a serviceable relationship
with Iran more generally. Earlier this month,
Beijing denounced new US sanctions as
an exercise of the United States’ ‘long-
arm jurisdiction’ and vowed to continue
bilateral trade with Iran.
Beijing has already invested heavily in
its relationship with Iran. China is Iran’s
largest trading partner, while Iran is China’s
fifth-largest supplier of crude oil. China’s
commercial ties with Iran – in particular,
rail and port links and infrastructure
investment – are enhancing the BRI and
strengthening its presence in West and
Central Asia and in proximity to the Gulf.
In July 2017, the Export–Import Bank of
China extended a US$1.5bn loan to Iran to
electrify the 900-kilometre Tehran–Mashhad
rail link; in January 2018, the China Civil
Engineering Construction Corporation
signed a US$511m contract with the Iranian
government for the construction of a 263
km railway line between Kermanshah and
Khosravi; and in March the two countries
made a US$700m deal whereby China
will build a 400 km railway line linking
the port of Bushehr with Iran’s other rail
networks at Shiraz. In September 2017,
China extended a $10bn line of credit to
five Iranian banks to finance water, energy
and transportation projects. China and
Iran are also increasing military-to-military
exchanges, joint counter-terrorism training,
and joint military exercises, as evidenced by
a military cooperation agreement signed in
November 2016.
From Iran’s perspective, promoting
bilateral arrangements with China is part
of a broader effort to become integrated
into Asian regional organisations such as
the Shanghai Cooperation Organisation
(SCO) and the Association of Southeast
Asian Nations (ASEAN), and to establish
a strategic partnership with China on the
basis of shared opposition to what they
perceive as a hegemonic US order. But
although Iran did sign a friendship treaty
www.iiss.org/stratcom
Editor: Jonathan Stevenson
Volume 24 Comment 36 November 2018
with ASEAN earlier this year, the trajectory
of its integration project appears modest
overall. Internal Iranian opponents and
dissidents have criticised Tehran’s attempt
to align more closely with Beijing, citing
the conflicting economic interests between
the two countries, and some conservative
clerics regard the tactical silence of Iranian
authorities regarding China’s repression
of the Muslim Uighur population to be
inconsistent with the Islamic ideals
of the Iranian revolution. China, for its
part, remains wary of transforming the
SCO into an anti-US organisation, and
as a result Tehran has only been able to
secure observer status in that body, which
occurred in 2005. Nevertheless, China
remains motivated to protect its substantial
strategic investment in Iran by maintaining
existing arrangements and, in particular,
continuing to buy Iranian oil.
India’s limited role
Tehran has never been able to build an
alliance with the traditionally non-aligned
India despite shared regional geopolitical
interests in Afghanistan and the ongoing
Chabahar port project in southeastern Iran,
which involves India, Iran and Afghanistan.
Once constructed, the port will open a
new transit route connecting the three
participating countries and expand trading
opportunities for India and Iran with
Central Asia, while bypassing Pakistan.
Despite an initial period of
rapprochement between 1997 and 2005
under then Iranian president Mohammad
Khatami, two main hurdles curtailing the
scope of the partnership between Tehran
and New Delhi remain: the Indian-
Israeli rapprochement and, especially, US
influence. India has voted against Iran in
the International Atomic Energy Agency.
Although Iran and Russia support the
Afghan Taliban as a check on ISIS, India
remains strongly opposed to negotiating
with the Taliban in view of its links to
the Pakistani security establishment.
Furthermore, India prioritises strong and
stable relations with the Gulf Arab states,
which host some eight million expatriate
Indian workers and with which India has
important oil and gas relationships, as well
as growing security and defence links.
Nevertheless, India’s Shia population –
arguably the world’s largest after Iran’s – is
an important political constituency in India;
that consideration has leavened India’s
Iran policy. New Delhi has cooperated
with Tehran in Afghanistan to subdue the
rise of Pakistani influence. Furthermore,
India’s perceived geopolitical utility to the
Trump administration in checking Pakistan
in Afghanistan and balancing China,
© The International Institute for Strategic Studies
among other things, affords New Delhi
some leverage vis-à-vis Washington. India
was able to exploit the scope of future
reductions of India’s oil imports from
Iran in its negotiations with the Obama
administration on civil nuclear cooperation,
and likewise (along with seven other
countries) used those reductions to obtain
a limited waiver of re-imposed sanctions
on Iranian oil imports from the Trump
administration. The US also refrained from
imposing sanctions on the Chabahar project
because of its potential to advance the
stabilisation and economic reconstruction
of Afghanistan and perhaps to deny
China an opportunity to take over the
port’s development and deepen its roots
in Central Asia. On balance, then, New
Delhi rejects the notion that Iran is an
international pariah, but has limited leeway
to treat it as a strategic partner.
Outlook
Iran’s difficulty in building a network of
relationships to counterbalance the negative
effect of its hostility towards the US is
best explained by the revolutionary, and
therefore destabilising, elements of Iranian
foreign policy. In turn, Russia, China and
India’s willingness to enter into conditional
partnerships with Iran – and their resistance
to unilateral US economic and political
pressures aimed at thwarting their
cooperation with Iran – do not reflect their
anti-Western attitudes so much as their
determination to have independent foreign
policies. Iran’s revolutionary ideology is still
a formidable hurdle to transforming Iran
into a truly emerging country, especially
insofar as it has antagonised the US.
The Trump administration, however,
withdrew from the JCPOA in spite of the
fact the Iran was complying with the terms
of the agreement. For the time being, Iran
is continuing its compliance and retains
the sympathy of many external actors –
including Russia, China and India, as well
as the European Union and many individual
European countries – and their qualified
cooperation in mitigating the effects of US
sanctions on Iran. Iran’s Eastern strategy,
then, is a pragmatic imperative in the context
of the United States’ policy of confrontation.
More broadly, it could also strengthen a
positive dynamic in international security.
The shared economic benefits accruing to
Iran from the three bilateral relationships
afford Moscow, Beijing and New Delhi
political influence with Tehran. They are
likely to use it to pressure the Iranian
government to refrain from militarising
its nuclear programme, to keep adhering
to the JCPOA, and to avoid a military
confrontation with the US.
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