From "late 2000 through mid-2001, Russian-Iranian relations appeared to be developing into a strategic partnership based on shared anti-American as well as other interests," stated Mark Katz, Professor of Government and Politics at George Mason University; former Title VIII-Supported Research Scholar, Kennan Institute; and former Research Associate, Kennan Institute, at a 24 September 2001 lecture. That partnership was called into question when a simmering dispute between the two nations over control over energy resources in the Caspian Sea flared up over a July 2001 incident involving an Iranian gunboat driving off two Azeri oil exploration vessels from contested waters. During the Soviet era, previously hostile relations with Iran began to thaw under Gorbachev in 1989. Relations grew warmer still under Yeltsin as Moscow began selling arms to Iran and provided assistance in finishing the atomic energy reactor at Bushehr that West Germany had started before the Iranian revolution.
Under Putin, the relationship developed even more rapidly. Putin's rise to power was concurrent with Russia's growing displeasure with the U.S. over NATO expansion, the war in Kosovo, and ballistic missile defense. In October 2000, Putin publicly repudiated the 1995 secret agreement between Vice President Gore and Prime Minister Chernomyrdin restricting arms sales and nuclear technology aid to Iran. There was a series of high-level visits between Moscow and Tehran, culminating in the visit of Iranian President Khatami to Moscow in March 2001. "A strategic partnership seemed to be in the making," according to Katz.
"But," continued Katz, "if you look at the reformist and conservative elements in both countries, none of the various political factions in either country were very happy with the relationship."
Reformists in Russia and Iran saw the growing partnership as little more than a tool for forcing the United States to pay attention to their nation's respective interests. Russian conservatives were very enthusiastic about the relationship, but were not willing to budge on any issue that Iran had with regards to Russian policy, including the Caspian Sea and Russia's improving relationships with Iraq and Israel. Iranian conservatives remained anti-American, but also felt that Russia was not to be trusted and that it would never come to Iran's aid. Despite the reservations on both sides, Russia and Iran had steadily improved their relations until the incident of July 2001, which exposed the greatest tension between them--the status of the Caspian Sea. Iran sought to increase its 11% share of the Caspian after the fall of the Soviet Union. When oil was discovered off the coast of Azerbaijan and Kazakhstan in the 1990s, Russia and Iran took the position that oil resources were the common property of all five littoral states (Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan). Once oil was discovered near Russian territory, Russia changed its position. Now Russia, Kazakhstan, and Azerbaijan share the position that the Caspian should be divided according to a modified median line, which would give Iran 13% of the Caspian. Iran's position shifted from demanding a 20% share of all resources from the Caspian to controlling 20% of the territory. Complicating the issue further is a recent study that shows that there is an oil field lying just beyond Iran's 13% border, but within their proposed 20% border.
The Iranian gunboat in the July 2001 incident was challenging two Azeri vessels surveying the oil field in this contested area. The incident was met with widespread condemnation, including from Russia. President Putin stated on August 2 that the use of force in the Caspian was "impermissible." Yet at the same time, there were indications that Russia wanted to continue with business as usual. On August 27 there was a call from Iranian and Russian officials for expanded bilateral trade. A few days later it was announced that Russia would sell Iran $1.5 billion in weapons over the next five years, which was a dramatic increase from the previous rate of $100 million per year. It was also announced that President Putin would visit Tehran in May 2002 in order to sign a treaty of friendship and cooperation and to make a joint declaration on the Caspian.
In pursuing a strategic relationship with Iran, Russia had hoped to boost its international image as a world power. By sending a gunboat to a region of the Caspian that had previously lain in Soviet waters, Iran has threatened this image. To the extent that Turkey and others come to Azerbaijan's aid in this matter, the Russians fear their influence in the Caspian, and Russia's image as a great power, will weaken. "On the one hand, if it doesn't act, Russia will look weak," Katz declared. "On the other hand, if it does act, it risks its profitable relationship with Iran."
Despite both sides sharing apprehension over increased American, Turkish, and even Taliban influence in the region, neither Russia nor Iran seem interested in coming to an agreement over the Caspian for the sake of building a mutual alliance, Katz concluded.
Disrupting the dynamic of the debate for both sides is the September 11 terrorist attack on the United States. Both states view themselves as valuable to the United States in dealing with the Taliban, and both expect to gain concessions in return for cooperation. One possible outcome, Katz theorized, is that Washington's desire to maintain a coalition including Tehran, Moscow and Baku could lead to the US to seek a settlement of the Caspian debate.