December 17, 2015


The Nuclear Deal with Iran: Geopolitical and Strategic Consequences for Ukraine

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Alexander Cheban






Alexander Cheban

Odessa I. I. Mechnikov National University,

Chair of International Relations



The Iranian nuclear program has been a long time in the international spotlight. There were real fears that Iran could develop nuclear weapons, and this would lead to catastrophic consequences in the Middle East and the world at large. At the same time, the majority of experts were sure that it was impossible to avoid such an undesirable scenario, because for a long time Iran categorically did not agree to at least minimal concessions on its nuclear program (including the military one).

Iran nuclear deal agreement: Vienna, July 14, 2015

Iran nuclear deal agreement:
Vienna, July 14, 2015

That is why the agreement with Iran to restrict its nuclear program is perceived as a pleasant surprise, claiming the status of a historical event. This agreement has an official name — the Joint Comprehensive Plan of Action (JCPOA) — and was signed in Vienna on July 14, 2015 by Iranian officials on the one side, and the countries of the “Six” of international mediators (the United Kingdom, China, Germany, Russia, USA and France) — on the other side.

Although the signing and the beginning of implementation of the Agreement has not finally removed all fears about the possibility of Iran's getting nuclear weapons, however, it has considerably influenced the situation in the region and prospects of development of events not only in the Middle East, but also in other parts of the world, in Ukraine included. With the lifting of these sanctions (and they were introduced due to Iran's failing to make its nuclear program more transparent) can dramatically increase the Iranian oil and gas exports, which will cause additional and perhaps decisive blow to the Russian economy, already weakened by sanctions and low prices for energy carriers. Russia's economic weakening because of Iran may be beneficial for Ukraine. Again, we cannot exclude that Russia will try to use its co-operation with Western countries on the final settlement of the so-called Iranian nuclear issue, as well as the joint struggle against the “Islamic State” (IS) exactly to persuade them not to support Ukraine and to return it under Russia's influence.

Taking into consideration the ambiguous consequences of the nuclear deal with Iran for the world and Ukraine, we need to more closely examine the Document (JCPOA) and suggest possible steps by which Ukraine could take advantage of the fact of its signing.

This article focuses on possible geopolitical and strategic consequences of signing the Agreement with Iran for the national security and national interests of Ukraine. But before that we should briefly look through the Iranian nuclear issue and the recent agreements to resolve it.

Iran started its nuclear program in the 1970s. At this, from the very beginning it declared its exclusively peaceful nature. In 1970, Iran signed and ratified the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) as a state that did not have such weapons.

However, already in 2002, representatives of the Iranian opposition provided Western intelligence agencies and the International Atomic Energy Agency (IAEA) with evidence that Iran was secretly developing military nuclear components of the program and intended to create nuclear weapons. Iran kept trying to prove that those data were not true, but the international community was not so sure on the military orientation of its nuclear program.

Mahmoud AhmadinejadThe first attempt to resolve the problem of Iranian nuclear program (INP) was made back in 2003-2005, when Iran agreed to certain limitations in the development of its nuclear industry, which reduced the likelihood of creating nuclear weapons. However, after coming to power of a conservative President Mahmoud Ahmadinejad, Iran categorically refused to adhere to the restrictions in the development of its nuclear program.

The period of rule of President Mahmoud Ahmadinejad (2005-2013) turned out to be perhaps the most difficult stage in the history of relations between Iran and the West. The main cause of conflict between the parties was uncontrolled by the international community development of the Iranian nuclear program. The international community's issues with the Iranian nuclear program were as follows:

  1. Iran on its territory was enriching natural uranium, each time increasing the percentage of enrichment, and that was a direct path to the accumulation of nuclear material used to make a nuclear bomb.
  2. Iran did not renounced the construction of a heavy water reactor in Arak, with which it could produce a lot of other nuclear material — the gun-type plutonium, also used in manufacturing nuclear bombs.
  3. Iran was developing and creating ballistic missiles that could deliver nuclear warheads, including to Europe.
  4. Iran was developing some elements of a nuclear bomb.
  5. Iran refused to give the IAEA inspectors access to its nuclear facilities.

Hassan RouhaniAs the international community for a long time with the help of political and diplomatic means could not persuade Iran not to develop the above-mentioned elements of the nuclear program, which were paving the way for creation of nuclear weapons, against it were imposed strict economic sanctions. Eventually, it greatly worsened the economic situation in Iran. As a consequence — Iran's elite agreed to limit the Iranian nuclear program in exchange for the lifting of sanctions. Elected in 2013, the seventh Iranian President Hassan Rouhani and his team took the course to constructive negotiations with the “Six” of international mediators. It gave positive results. First, in November 2013 in Geneva, the temporary Joint Plan of Action (JPOA) was signed, which regulated restrictions of the Iranian nuclear program, and in July 2015 the above-mentioned JCPOA was signed, which gives hope for a final settlement of the Iranian nuclear issue. This hope is strengthened by the fact that, according to the IAEA report, Iran fulfills its commitments to sharply reduce its stockpile of enriched uranium and to convert the reactor in Arak, and others.

The signing of the JCPOA has not completely removed the risk of Iran's developing nuclear weaponsAt the same time, according to experts of the Harvard’s Belfer Center, even if Iran faithfully fulfills its obligations, it will still be able to accumulate nuclear material needed to make a nuclear bomb within one year (before the signing of the Nuclear Treaty it would have taken Iran 2-3 months). So, the signing of the JCPOA has not completely removed the risk of Iran's developing nuclear weapons (NW). This agreement allows to postpone creation of the Iranian nuclear weapons for 10 months (in case if Iran dares to violate the JCPOA and resumes the development of the military nuclear program). Also, this agreement does not remove from the agenda the question of Iran's missile program, which, at Iran's insistence was not touched upon in the negotiations on the Iranian nuclear program, and therefore is not limited. Naturally, the JCPOA has not settled the problems that do not relate to nuclear issues — Iran's support for terrorism, ambiguous and not coordinated with the majority of countries Iran's policy in Yemen, Syria and Iraq, tensions between Iran and Saudi Arabia, Israel and so on. However, these regional problems, in which Iran is involved, are many countries' concern, and no less than the INP. Therefore, many doubt about the feasibility of lifting sanctions against Iran in exchange for its not so significant concessions in the development of the Iranian nuclear program. After the lifting of sanctions, Iran would have additional opportunities to conduct aggressive policies that undermine international security. Therefore, the implementation of the Nuclear Deal with Iran can ensure only positive results for international security.

Let's try and analyze how positive or negative these results will be for Ukraine.

In its official statement of July 2015, Ukraine's Foreign Ministry welcomed the signing of the JCPOA with Iran and expressed its support for the implementation of this Document. As noted earlier in this article, the implementation of the Nuclear Deal with Iran could provide positive results for Ukraine due to further drop in prices for oil and gas, further reduction of Russia's financial capabilities and reduction of its military activity in the Donbas. However, as we have already mentioned, the implementation of the JCPOA can also have negative consequences, affecting the safety of Ukraine. Therefore, in this section we will analyze the consequences of the nuclear deal with Iran to Ukraine in the context of both, possible changes in the global energy market and the development of strategic military and political situation in the Middle East.

The sharp decline in oil pricesThe sharp decline in oil prices over the past few years has led to further oil production in some countries (especially in Russia) becoming unprofitable. At the same time, the decline in oil prices does not reduce the Arab States of the Persian Gulf and Iran's motivation in building up energy exports, as in these countries the cost of production of each barrel of oil is significantly lower than in Russia. Therefore, while the sale of oil for less than 40 US dollars per barrel for Russian oil producers is unprofitable, the Arab countries and Iran at such prices are still able to count on profits. Moreover, they have a unique and promising opportunity to oust Russia from the European and Chinese energy markets. Implementation of such a scenario does not excluded that via Ukraine, in particular, through its Odesa-Brody pipeline will be the transit of energy resources from the Middle East to Europe and will be laid new pipelines through Turkey and across the Black Sea, or will be arranged large-scale deliveries of oil and liquefied natural gas across the Black Sea to Odesa. From this, our state would definitely benefit both economically and geopolitically.

However, a deeper analysis of the situation allows also to conclude that Iran will be able to dramatically increase the volume of exports of oil and gas only after a few years (from about 2018 on). It will take it those years to replace obsolete oil and gas production equipment, at this, Iran will need to yet attract foreign investments into such a replacement. But even in case of successful modernization of the mining industry, the growth in exports of Iranian gas may not be very noticeable, because Iran leaves a lot of gas for domestic use. The table below shows that due to the growth in domestic gas consumption even under the most favorable circumstances (in particular, the increase in production at the largest Iranian South Pars gas field), we can't expect such a substantial increase in exports of Iranian gas, which could put a permanent end to Russia's gas monopoly in Europe.


Iran's capabilities for natural gas exports to 2020, billion cubic meters per year

Source: Energy Information Administration (EIA, USA).

Compiled by: Yuri Fedorov. Iran: Nuclear State or an Energy Superpower of the Future?


Besides, a noticeable decrease in the price of oil and gas will be prevented by the confrontation between two powerful energy suppliers — Iran and Saudi Arabia. These two countries are actually fighting in Syria. It is possible to agree with the opinion of many experts that one of the reasons for the continuation of the Syrian conflict is the desire of the leading exporters of oil to achieve profitable for them laying of oil pipeline routes to Europe. Iran and Saudi Arabia are opposed also in Yemen, where they support different sides of the domestic conflict. It is possible that having interfered into the conflict in the Middle East, Iran (like other energy-exporting countries) is trying to create a situation where oil prices will rise due to the instability in one of the most oil-rich regions of the planet.

However, it seems that Iran and Saudi Arabia expect a rise in oil prices no earlier than in 2016-2017. To implement their own short-term tactical goals, these countries, on the contrary, are contributing to a further reduction in energy carriers prices. Saudi Arabia is setting dumping oil prices and is increasing volumes of production for the sake of ousting Russia from the world energy market. Iran, in spite of the above-mentioned problems with oil and gas production equipment, is also trying to, at least, a little bit increase its exports of energy carriers, as it badly needs cash infusions to restore its economy exhausted by long sanctions. As already mentioned, even thanks to the low cost of oil production for both, Iran and Saudi Arabia (but not for Russia!), the increase in exports in the situation of declining prices of energy carriers is still cost-effective and profitable.

Iran's nuclear agreement has helped to weakening of Russia's economic positionsAt the same time Russia, at current oil prices, risks facing the threat of complete hollowing out of its stabilization fund already in 2017, and possibly even in 2016. Given the numerous other problems of the Russian economy, related, among other things, to Russia's two military campaigns (in Syria and in Ukraine), we can assume that next year the Russian government will be forced to cease hostilities in the Donbas and to go for full and unconditional fulfillment of “Minsk Agreements”. However, it won't end in Russia's falling apart because of the explosion of social protests disgruntled by economic problems of the Russian population, as this population zombied by the official propaganda, demonstrates the ability to unite around President Putin despite the growing social and economic problems. But, at least in the nearest future we can hope for a significant reduction in Russia's military, economic and information pressure on Ukraine. It is in this context that Iran's nuclear agreement has proved favorable for Ukraine. It has helped to maintain low energy prices and weakening of Russia's economic positions (the very news of the Agreement achieved with Iran, and even a slight increase in Iran's energy exports in the summer of 2015 lowered the price of oil by a few dollars).

At the same time, the nuclear deal with Iran, as well as some other events concerning the issues of non-proliferation regime of nuclear weapons, have shown some disturbing for Ukraine trends. These trends are due to the fact that the United States and other Western countries continue to believe that only close “cooperation” with Russia can contribute to strengthening the nuclear nonproliferation regime. It is possible that for the sake of establishing such “cooperation” the West is able to even make certain concessions to Russia in the “Ukrainian issue”.

It seemed that Russia and the US had no disagreement whatsoeverThus, speaking at the Scientific Seminar in Vienna, a former employee of the IAEA, and now Director of the Vienna Centre for Disarmament and Non-Proliferation, Laura Rockwood said that she was surprised by how smoothly Russian and American delegations worked during the negotiations with Iran on the signing of the JCPOA; it seemed that Russia and the US had no disagreement whatsoever over Ukraine and other topical issues of international relations.

Similarly, at the same scientific seminar a representative of the Stockholm International Peace Research Institute (SIPRI) Tariq Rauf pointed out that during the latest Review Conference for the Treaty on the Non-Proliferation of Nuclear Weapon (NPT Review Conference), held in April-May 2015 in the main UN Headquarters in New York, Russia and the United States, by prior arrangement, in the final document did not mention Ukraine. This “agreement” was nonsense, because it is a violation of the provided to Ukraine by the Budapest Memorandum (in exchange for its giving up nuclear weapons) security guarantees could persuade other countries that only nuclear weapons can guarantee national security, that is, it can result in a crisis of the nuclear non-proliferation. Therefore, it was impossible to remain silent about the issue of Ukraine in the final document of the NPT Review Conference, the largest international forum dedicated to the problems of non-proliferation. But the United States ventured to take this step, and agreed not to mention the “Ukrainian issue” in the draft final document of the NPT Review Conference (which, by the way, was never adopted due to lack of consensus, the Conference ended without adopting any document. Perhaps, such a situation was the best option for Ukraine).

Such “partnership” between Moscow and Washington to strengthen the nuclear non-proliferation was also observed during the most difficult period of the “cold war”, when the United States and the Soviet Union could not agree on one issue. It is not surprising that such “cooperation” is observed now, when the relations between Russia and the United States are not so sharp as the Soviet-American relations once were. Perhaps, international security will benefit from the fact that Russia and the United States continue their “cooperation” in the nuclear field, despite the problems in their bilateral relations. But Ukraine should be interested in its interests not to be exchanged for the establishment of the US-Russian nuclear cooperation. To achieve this is not easy, including through the nuclear deal with Iran.

Conclusion of the JCPOA has led to certain rapprochement of Iran and the West, not only on the nuclear issue. Iran and Western countries have one common interest — the fight against the “Islamic State” (IS). Russia, as Iran's long-term partner, is also trying to prove that it also is an enemy of the IS, and thus to combat the Islamists, the West must unite its efforts not only with Iran, but also with Russia. In the wake of the joint struggle against the IS, and “cooperation” with the West on a final settlement of the Iranian nuclear problem, Russia, first of all, is trying to weaken the international sanctions that could definitely harm Ukraine's interests.

However, at the moment Russia's efforts, aimed at persuading the West to stand together against the IS, are unsuccessful. Fully supported by Iran, Russia's actions in Syria against the so-called moderate opposition make Western countries carefully consider the prospect of conducting joint operations with Russia and Iran against the IS. Besides, Western countries make it clear to Russia that there is no need to link the issues of Ukraine and Syria.

Francois Hollande's visit to Moscow, November 26, 2015However, the above-mentioned examples show that Russia and the West can easily agree on issues of common interests and that it is Ukraine that is becoming a bargaining chip in these agreements. Besides, it is possible that Putin and Western leaders will reach an agreement on removing Syrian President Bashar Assad from power, and other matters of war in Syria, that so far divide Russia and the West. Indicative in this context, is the visit of French President Francois Hollande to Moscow soon after the terrible terrorist attacks in Paris of November 13, 2015, which in fact confirmed the readiness of the leading Western countries to cooperate with Russia in the fight against terrorism, despite the difference in views on the problems of Ukraine. Therefore, it is possible that in the next year the possible further increase in the international terrorist threat will bring together even more Western countries, on the one hand, and Russia and Iran — on the other. In these circumstances, the West can forget about its promises to always support Ukraine as it was shown at the recent NPT Review Conference.

So, the conclusion of a nuclear deal with Iran has directly or indirectly contributed to the development of two different trends: on the one hand, this agreement contributes to a further reduction in energy prices and reduces Russia's capabilities, including to conduct an active policy in Ukraine, and in this context the JCPOA is in the interests of Ukraine. On the other — the conclusion of an agreement with Iran creates preconditions for rapprochement between the West and Iran and Russia on the issue of conducting a joint struggle against the IS. And in the situation of this rapprochement the West can make certain concessions to Russia in the “Ukrainian issue”, as it has already happened, for example, during the NPT Review Conference in April-May 2015. This prospect is unacceptable for Ukraine. And if this prospect is not implemented because of disagreements between Russia and the West on the Syrian opposition and the continuation of the West's course to support Ukraine, it does not mean that the next year the West will not give up its position on Ukraine because of the possible increase in the terrorist threat and desire to counteract it with Russia. There is a possibility that the West would weaken sanctions against Russia, and this will reduce the harmful influence of the collapse of oil prices on the Russian economy and give Moscow additional opportunities to exercise pressure on Ukraine.

To neutralize these challenges, Ukraine perhaps should resort to the following measures:

  1. To conduct an active information campaign in the western countries and to maintain intense diplomatic contacts with them to persuade them not to lift economic sanctions against Russia, at least until 2017, when, according to forecasts of economists, the Russian economy under the influence of sanctions and a decrease in oil prices may reach the lowest point of its fall.
  2. To intensify cooperation with Turkey, which, after the destruction of the Russian Su-24 bomber and the aggravation of Russian-Turkish relations can become Ukraine's ally in its confrontation with Russia.
  3. To develop partnerships, both with Iran and with unfriendly to it Arab States of the Persian Gulf. To do this, Ukraine in its official statements should give a very cautious assessment of the events in Syria, so as not to cause irritation in one of the conflicting sides, connected with Iran or Saudi Arabia or Qatar.
  4. With each of these and other Gulf countries-oil exporters, Ukraine should and try and agree on supplies of energy carriers to Europe through Ukraine — for example, by tankers across the Black Sea, followed by their transportation by Odesa-Brody oil pipeline.

Besides, it is appropriate to begin discussing with these countries a possible construction of oil pipelines under the Black Sea from Turkey to Odesa. At this, Turkey must be considered, and in the long term be positioned as Ukraine's important partner in the transit of Middle East’s energy carriers to Europe, both by oil pipelines and by tankers.