UPI November 17, 2006
Analysis: Iran nuclear row a Russian deal
By Ben Lando
WASHINGTON, Nov. 17 (UPI) -- Russia's current and future nuclear energy investments in Iran may be hindered by the fallout from the ongoing international row over the Islamic republic's alleged nuclear weapons ambitions, which Moscow has a key role in resolving.
Russia is constructing the Bushehr nuclear plant in Iran with an eye on future Iranian development worth billions more.
But Iran's determination -- or sovereign right to self-determination over its civilian nuclear program, President Mahmoud Ahmadinejad says -- to enrich uranium (a process for making both civilian and weapons grade material) has the United States calling for harsh sanctions and the U.N. Security Council debating action.
And so Russia, a re-empowered nation a decade after a low following the fall of the Soviet Union and boosted to "energy superpower" status with high prices for its oil and gas resources, plays its hand as intermediary.
"Like all countries they are doing what's in their best interest," said Charles Esser, energy analyst at the International Crisis Group. "Russia's not looking for what's in Iran's interest or what's in the United States' interest. They're looking out for Russian interest."
That's the large arms trade with and oil investment in Iran.
And that's the $1 billion Bushehr contract, with the 10-year fuel supply deal it signed last year.
"There's no indication that Russia wants a confrontation. They'd like a solution that doesn't make them lose their investment in Bushehr," Esser said.
Russia has agreed to a ban on weapons materials and technology sales to Iran but says it will veto U.N. sanctions that hinder Bushehr's construction or fueling contract. It largely agrees with Ahmadinejad's claim that Iran has a sovereign right to peaceful nuclear energy.
But a restriction on Iran's uranium enrichment facility would suit Moscow's pocketbook well.
"Russia currently controls about a third of the world's nuclear fuel supply and makes a tremendous amount of money exporting," said Cliff Kupchan, director of Europe & Eurasia for the Eurasia Group, a global political risk analyst firm.
"The core issue being Russia's national interest in maintaining and building its relationship with Iran in the civilian nuclear sector. That's a big problem with the United States and getting Russia to agree to sanctions."
Kupchan says Russia could pull in up to $4 billion on the next two nuclear reactors Iran is considering.
"Russia is one of the only countries in the world that is willing to aggressively build nuclear plants for Iran right now."
Russian diplomats aren't throwing their entire weight behind Iran, though its limited sanction approval irks the United States and Foreign Minister Sergey Lavrov said Friday the International Atomic Energy Agency, not the Security Council, is the proper venue for ensuring all sides gets what they want.
"They are walking a careful line," said Mary Beth Nikitin, a fellow in the International Security Program at the Center for Strategic and International Studies.
Atomstroyexport, Russia's nuclear export arm and contractor for Bushehr, told Iran in September technical issues would delay the completion of the plant -- as well as the first shipment of fuel -- until late next year.
"Some of the outside observers detect a certain degree in purpose in these delays to not have Russian actions misinterpreted as a reward for Iran," she said. Iran has called it Russian "incompetence" while Arms Control Today reports U.S. and European officials said it was a tactic urging Iran to tone down.
"It's generally recognized now that the reactor itself is not a proliferation threat," Nikitin said, but possible Iranian misuse of the fuel is. Under the contract signed last year, Russia would be responsible for both delivery and reclamation of the fuel, thus eliminating proliferation concerns. (They offered earlier this year to enrich all the uranium Iran wants, providing they would also retrieve it, as a negotiating tactic, but Tehran said no.)
Iran is moving ahead with its uranium enrichment facility, part of a secret nuclear program exposed in 2002 and the main spark in the debate.
"The Russians would like to continue selling fuel to Iran and understandably Iran doesn't see it that way," said John Pike, director of GlobalSecurity.org. He said Tehran sees itself at the mercy of someone else if it can't control its own fuel production, part of what Pike calls "the complex web of transactions and relationships."
"Fueling Bushehr has been pretty large on America's priority list for some time," he said.
And "undoubtedly," the issue has been a bargaining chip for both Moscow and Washington in their talks over Russia's admittance to the World Trade Organization, a deal that's to be finalized Saturday.
"The Americans would have been leaving money on the table if they didn't play it that way," Pike said.
"It's inconceivable to me that there is not some de facto linkage between bilateral agreement of the WTO and efforts to enlist the Russians to support U.N. sanctions," said the Eurasia Group's Kupchan.
Russia is building two reactors each in India and China -- with more tenders to come, Sergey Shmatko, president of Atomstroyexport, told United Press International. And it just signed a deal for a dual-reactor plant in Bulgaria, so with or without the lucrative Iranian deals, Russian nuclear energy investment has no plans to slow soon.
© Copyright 2006, United Press International, Inc.
