Russia, Iran, Looking At Nuclear Power, Aviation and Auto Manufacturing Investments

Russia and Iran have discussed further construction of the second phase of a nuclear power plant (NPP) in Bushehr and cooperation in the aircraft and auto industries, Russian Deputy Prime Minister Alexei Overchuk said after meeting with Iran’s First Vice President Reza Aref on Tuesday (February 18), with Overchuk saying “We discussed energy cooperation, including a continuation of the NPP construction in Bushehr in addition to matters of industrial cooperation in aircraft-building, in jointly developing and creating jet engines for passenger aircraft. Iran is very keen on Russian aviation hardware. We also discussed Russian car manufacturers’ entering the Iranian market, including the establishment of a major hub for assembling Russian cars in Iran.”

These diverse industrial and investment sectors come as Iran has a Free Trade Agreement with Russia via the Eurasian Economic Union, while Iran is also a full member of BRICS.

Sergey Lavrov, the Russian Foreign Minister, who has been meeting with US counterparts in Riyadh, also alluded to the fact that Russia could assist Tehran in helping ease the strict sanctions imposed by the United States and the European Union on Iran. If that happened – with sanctions imposed by concerns about Iranian nuclear threats against Israel, a loosening of the Iranian market would be of substantial benefit to European investors as well as Russian, and potentially American. It would usher in a new era of prosperity for the Middle East region.

Iran is a consumer market of 86 million, with the country possessing the world’s second largest LNG reserves and third largest oil reserves. If Russian diplomacy is able to assist Iran in mending its relations with the United States, this would be a global game changer. In the meanwhile, Iranian trade is conducted mainly with Russia and China, with the United States and Europe currently excluded from Iran’s energy and market access opportunities. The US Trump administration now appears keen to break that deadlock if nuclear security agreements can be reached.