On January 16, 2016, the International Atomic Energy Agency verified that Iran had completed the necessary steps under the Iran deal that ensured Iran’s nuclear program is and remained exclusively peaceful. The implementation of the JPCOA nuclear agreement lifted all UN-mandated nuclear sanctions as well as EU and US economic, financial and banking sanctions over the Iranian nuclear programme.
This agreement gave Iran clear water to reengage with the world and with it the rebirth of the Persian Empire. There has been and will be no shortage of nations across Europe who wish to take advantage of the opportunities the removal of sanctions can provide for them.
Immediately after the lifting of sanctions Iranian President Hassan Rouhani made Italy his first stop in Europe, seeking infrastructure investment into the Iranian economy. In April 2016, Italy and Iran signed deals worth billions when Italian Prime Minister Matteo Renzi visited Tehran. Renzi was accompanied by a delegation of 60 business leaders from the energy, railways and defence sectors. Italy’s export agency and state lender also attended pledging billions of euros in credit lines.
The European Union’s foreign policy chief, Federica Mogherini stated that the 28-member bloc wishes to become Iran’s biggest trading partner, saying, “We are the ones that used to be Iran’s first partner on the economic fields, on trade, investment, and we want to be back to that.” Already German industrial giant Siemens, the oil and gas company Shell, and French auto makers Peugeot and Renault have registered their interest in working with Tehran.
A former Iranian Senior diplomat offered Irans perspective on this relationship saying, “Economic ties with Europe is advantageous for Iran in terms of development, and it carries fewer issues than relations with the United States. Europes approach to Iran has been, is and will be strategic and long term as far as energy security is concerned, because the continent has no better choice to substitute Irans oil and gas resources.”
Despite European enthusiasm towards restoring links with Iran, they face roadblocks and unsurprisingly in the guise of Washington. The US retains a list of individuals that it considers pose a risk on a Specially Designated Nationals List (SDN). Anyone who is seen to work with the people on this list would then risk being cut off from the US financial system. Given the complex nature of global businesses and their interaction with global financial institutions this could seriously impede European progress with Iran.
Clearly this will play into the hands of Russia and China very nicely given they are far less hamstrung by such regulation. Within days of the sanctions being lifted Chinese President Xi Jinping met with Iranian President Hassan Rohani who agreed to expand bilateral relations and boost trade to $600 billion over the next 10 years. Jinping also met with the Iranian Supreme Leader Ayatollah Ali Khamenei who said, “Tehran seeks cooperation with more independent countries” because “Iranians never trusted the West.” Iran and China signed 17 accords including nuclear cooperation and reviving the Silk Road trade route.
In May 2016, Iran and China signed a series of memorandums of understanding (MOUs) to facilitate bilateral trade. Trade Promotion Organization of Iran (TPOI), affiliated to the Ministry of Industries, Mining and Trade, signed agreements with the China Council for Promotion of International Trade and Jinjiang Chamber of Commerce to facilitate trade and investment between Tehran and Beijing. The TPOI chief, Valiollah Afkhamirad, said Iran could be a base for the manufacture and exports of Chinese products. “We have the capacity of allocating some of our companies to Chinese brands for manufacturing their products before exporting them to other countries. This way Chinese companies will not have to deal with the risk of new investments to expand their markets,” he said.
In February 2016, Russia and Iran signed contracts worth a total of around $40 billion, including in the nuclear energy field. Adviser to Iran’s supreme leader Ali Akbar Velayati said that the contracts related to the construction of the second and third units of Iran’s Bushehr nuclear power plant, as well as the development of the Islamic Republic’s railways. Velayati also said that he had discussed Iran’s potential membership in the Shanghai Cooperation Organization (SCO) with Russian President Vladimir Putin in Moscow with China equally supportive of such a move. Velayati when attending a round table meeting at the Russian Institute for Strategic Studies said, “The current global situation is the result of a one-sided policy. Iran and Russia, through their cooperation, may contribute to the creation of a more equitable system in the world.”
In July 2016, Russia and Iran agreed a five-year strategic cooperation plan was agreed during the visit by co-chair of the Russia-Iran Joint Economic Commission Mahmoud Vaezi to Moscow. They signed a contract for the construction of a power station in Iran’s Hormozgan province. The power plants four generators will have a 1,400 megawatt capacity with Russia already approving a 2.2 billion loan for infrastructure projects in the Iran, including the construction of the power station. During the meeting with Russian Energy Minister Aleksandr Novak, Vaezi said Tehran also plans to establish new energy contracts with Russia in the near future.
Only today in a clear signal of the blossoming relationship between Russia and Iran, the Russian Defence Ministry announced that they had used Iran’s Hamadan airbase deploying Tu-22M3 bombers and Su-34 strike fighters and that these aircraft have already been used to carry out airstrikes against Daesh in Syria. Clearly the use of this additional base would reduce the risk for the Russian Airforce whilst providing more strategic options for tactical strikes against militants in Syria.
What is clear is that we are seeing the re-emergence of Iran and the Persian Empire. Until Europe shakes of the shackles of Washington it will be inhibited in its ability to make significant progress which will play nicely into the hands of Russia and China. It is also clear that Iran sees both Russia and China as more natural allies which is understandable. The US through its belligerent stance continues to play the self-imposed role of isolation and that shows no sign of changing anytime soon. We should expect to see Iran play a far more prominent role in global affairs, particularly in relation to the Middle East aside from its current role in Syria. It will continue to gain a larger share of the oil market which is now at around 2.5m barrels of oil per day. The birth of the New Silk Road rightly now includes Moscow, Tehran and Beijing. Berlin will join soon enough as ongoing secret talks with Russia and China continue. Once that alliance is sealed, that will signal the end of US hegemony.