Russia’s Current Relations and Trade With Iran and Israel

Russian President Vladimir Putin has held discussions with both Israeli Prime Minister Benjamin Netanyahu and the Iranian President Masoud Pezeshkian in the wake of this weekend’s attacks by Israel on Iran and the subsequent Iranian retaliation. It is believed he is the only world leader still able to discuss – and potentially mediate – between the two sides. US President Trump may also be wanting Putin’s assistance to dampen down Israeli-Iranian tensions, an issue that may have implications for on-going US support for Ukraine.

Aside from the immediate political angle, how are Russia’s ties with Israel and Iran? We examine how Russia is involved with both.

Israel

Moscow has been critical of Israel’s attacks on Iran and Putin will have told Netanyahu this. Russia has also been supportive of the Palestine state, has been critical of Israel’s actions in Gaza and has called for a two-state solution. Diplomatic ties therefore are strained, however there is a significant Russian Jewish diaspora in Israel, and they do have some political clout.

With a population of about 9.39 million, Israel has a GDP (PPP) of US$552 billion and a per capita GDP (PPP) of US$55,532. While GDP growth has been stunted due to its apparently expanding regional conflicts and has essentially flatlined, Israel’s focus on high-value industries ensures long-term economic resilience however are at risk should conflict continue. Israel will need US economic support over the longer term if resolutions cannot be found.

Bilateral trade between Israel and Russia has previously been dynamic, with a focus on diversification and growth. While the bilateral trade volume has fluctuated, in 2024, according to Trading Economics, it reached US$3.86 billion. Israeli exports comprised mainly agricultural products, fruits and vegetables, and some optical equipment, and reached US$489.96 million.

Russian exports reached US$2.37 billion and were fairly evenly divided between oil, grains and construction materials. Israel’s involvement in the international gemstone industry is important, with Russia a major exporter of diamonds, although this too has slowed due to global markets in Dubai tending to boycott Israeli products. Russian investments into Israel are valued at about US$600 million, spread across a variety of industry sectors.

The main question for Israel is how far it can rely on US support in the longer term. There are already signs that the United States is diverting equipment and finance originally intended for Ukraine to Israel, implying that President Trump does not wish to oversee two simultaneous conflicts. A cynical view may also be that an Israel-Iran conflict would move Western public awareness away from the Ukraine conflict in order to minimise the political fall-out should Russia prevail.

For more on Russia-Israel bilateral intelligence, please click here.

Iran

Moscow has been supportive of Iran and had helped meditate the now-postponed US-Iran nuclear discussions. President Putin has met with Iranian President Pezeshkian, and Foreign Minister, Abbas Araghchi this year, discussions we commented on here, here and here. The two countries also signed a 20year Strategic Partnership Agreement in January, although this did not include military support.

Iran is also a full member of the BRICS, a full member of the Shanghai Cooperation Organisation, and has a free trade agreement with the Eurasian Economic Union. The country is also a key part of the International North-South Transportation Corridor, which transits Iran from the Caspian Sea to the Persian Gulf and is poised to be a significant route for Russia-Middle East-Africa-South Asia trade flows.

With a population of about 91.57 million, (ten times the size of Israel), Iran has a GDP (PPP) of US$1.698 trillion and a GDP per capita (PPP) of US$19,607. The country saw GDP growth of 3.2% in 2024, although this could decline this year depending on how serious the Israeli conflict becomes.

While heavily sanctioned by the West, Iran’s trade ties have been enhanced through several free trade agreements. Notably, in late 2023, Iran signed a temporary agreement with the Eurasian Economic Union (EAEU), including Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan, eliminating tariffs on 90% of traded goods. The trade volume between Iran and EAEU countries reached US$6.2 billion in 2024 under a prior preferential arrangement. That deal was made permanent earlier this year with initial 2025 data suggesting an increase of trade volumes between Iran and the EAEU of about 22% in the first five months of this year. Projections are for Iran-EAEU trade to rise to US$20 billion by 2030.

Iran is also a member of BRICS and the Shanghai Cooperation Organization (SCO), a major political, economic, and security bloc that also includes China, India and Russia, offering preferential trade opportunities. China remains Iran’s largest trading partner, boosting the country’s trade prospects in Asia. Iran has entered into several bilateral free trade agreements with neighbouring countries, including Iraq, Afghanistan, and Turkiye, focusing on energy, agriculture, and manufacturing products, which helps mitigate the impact of international sanctions.

Iran’s bilateral trade relationship with Russia has been relatively stable, increasing from US$4 billion in 2021 to US$4.5 billion in 2022, with Russia’s energy minister putting the figure at US$4.8 billion for 2024. With the EAEU free trade agreement discounting tariffs on 90% of all traded goods with Russia, these volumes can be expected to show sharp increases.

Iran’s primary exports to Russia are oil and gas related, while its non-oil exports encompass a range of products like chemicals, plastics, ceramics, fruits, and some dairy products. Russia’s main exports to Iran are mainly energy related pipeline gas, automobiles and construction materials and equipment. The two countries are also discussing Russian grain supplies.

Cooperation on gas supplies is actively developing, even though Iran ranks second after Russia in terms of proven gas reserves. The reason for this is Iran’s rapidly growing consumption, provided that it maintains stable exports. The two countries also plan to establish a centre for foreign and domestic food trade in the Sarakhs Special Economic Zone. Given the new free trade agreement, diversification of the bilateral trade balance can be expected.

Russia has been increasing its investments in Iran, particularly in the oil and gas sector, with a further commitment of up to US$50 billion as part of the Strategic Partnership Agreement. This surge in investment is partly due to international sanctions on both countries, which have fostered closer economic ties as they seek to circumvent or mitigate the impact of those sanctions and include not just energy projects but also the development of the INSTC network. This includes the enhancing of rail connectivity between Russia and Iran via Azerbaijan. Russian exports already transit Iran en route to India, Pakistan and the Middle East with East Africa also being explored. Iran’s importance to Russia as a gateway to global markets should not be underestimated.

For more on Russia-Iran bilateral intelligence, please click here

Russia’s Position As Regards The Israel-Iran Conflict

Russian Deputy Foreign Minister Sergey Ryabkov, who is responsible for Middle East affairs, has stated that Russia insists on a purely political and diplomatic solution regarding all issues related to the Iranian nuclear program, saying on Saturday (June 14) that “We keep insisting that there are no alternatives to the purely political and diplomatic resolution of all issues regarding the Iranian nuclear programme.” Russia has criticized the Israeli attacks and has called for a halt to escalation. President Putin may yet be called upon to mediate between the two sides.