Russia and Iran have reached an agreement over the delivery of the S-300 long-range surface-to-air missile systems by the end of 2015, according to Russian deputy foreign minister Mikhail Bogdanov.

Russia And Iran: Emergence Of New Nuclear Alliance

“As things stand now, this topic is closed. We have reached full understanding on the matter together with our Iranian partners. The question has been fundamentally solved. The rest is just technical details,” Bogdanov told Russian state-owned RIA Novosti on Wednesday.

The number of S-300 missile systems will reportedly comply with the order in the agreement signed in 2007.

“There will be as many as mentioned in the contract,” a high-ranking source in Russia’s Foreign Ministry told RIA Novosti, answering the question on whether Russia would supply Iran with four divisions of S-300 instead of three, as it was previously reported by Russia’s Ministry of Defense.

However, it must be noted that the 2007 agreement included the delivery of five S-300 divisions of the PMU-1 modification.

On Tuesday, a day before the announcement of Bogdanov, Iran’s defense minister, Hossein Dehghan stated that Moscow and Tehran will sign a revised agreement over the delivery of modernized S-300 long-range surface-to-air missile systems by the end of August.

“The text of the contract is ready and our friends will go to Russia next week to sign the contract,” Dehghan was quoted as saying by Iran’s Fars news agency. He also noted that there are no impediments to sign the agreement.

New S-300 contract is on the table

A source familiar with the contract clarified the details of the contract in the interview with Russian Interfax news agency. According to the source, the contract will be different to the previous one that included the S-300 missile systems. “The new contract will differ in terms of price and new conditions of the delivery,” the source told Interfax.

Commenting the statement of Dehghan about the modernized version of the S-300, the source also noted that “the new contract will not be about the S-300 PMU-1 missile systems, since they are no longer in production – it will be rather about the modernized version of S-300 VM that goes by the export name Antey-2500.”

In April 2015, Russian President Vladimir Putin lifted the five-year embargo on the delivery of S-300 missile systems to Iran. The leader of Russians explained his decision by saying that there was a significant progress in the talks on Iranian nuclear issue.

The embargo was put in place back in September 2010 by the then-President of Russia, Dmitry Medvedev, under the decree issued by the UN Security Council to limit the delivery of offensive weapons to Iran. The sanctions of the United Nations did not cover surface-to-air missile systems, which are considered defensive weapons, but the Kremlin decided to ban the delivery due to the ‘reset’ relations between Russia and the U.S.

As a result, the contract to deliver S-300 PMU-1 systems to Iran signed in 2007 costing about $800 million was banned at the stage of shipping. Tehran immediately reacted by suing Russia for $4 billion in the international arbitration court in Geneva. Since June 2015, Tehran and Moscow have been holding talks to withdraw the claim from Geneva.

China + Russia + Iran + Pakistan = new military alliance?

Moscow and Tehran are thus entering a new phase of military relations. Just a week ago, a Russian navy fleet docked at the northern Iranian port city of Anzali in order to strengthen friendly maritime ties between Russia and Iran. Meanwhile, Tehran and Moscow are planning joint efforts of their special forces to resolve geopolitical issues relevant to the two countries.

Before recently, the relations between the two sanction-hit countries could hardly be called ‘friendly’. But in the midst of Western sanctions, a rising threat from ISIS and a number of other geopolitical issues, there are reasons to believe that Tehran and Moscow may soon seal their warming military relations in the form of joint declaration and create some kind of alliance in the region.

It was reported by ValueWalk yesterday that there are clear indications of the emerging world’s new superpower axis between China, Russia and Pakistan. And judging by recent developments in the relations between Russia and Iran, it seems that no country of the triangle would mind a nuclear power such as Iran joining such an alliance.

ValueWalk asked an expert on nuclear weapons to comment the new developments in the delivery of S-300 to Iran.

“It’s curious that [U.S. President Barack] Obama hasn’t said a word about the delivery of the missile systems from Russia to Iran. Exporting those missiles, Russia will get $2 or $3 million guaranteed,” Valeriy Poddubny said in an interview with ValueWalk.

Russia and Iran: emergence of a new nuclear alliance

“I believe Iran will be a perfect political ally for Russia, as both of the countries share the need to maintain antagonism with the U.S. for their survival,” Poddubny noted. “It’s too early to say whether or not there will be benefits for Russia as a result of such an alliance. For example, the Kremlin’s attempts to take part in the development of Saudi Arabian crude oil sector fell through, but [Russian President Vladimir] Putin did not regard that as a major failure.”

“He is willing to play the geopolitical game and let his country suffer economically. Judging by the sanctions imposed against Russia, there are reasons to believe that political intrigues are more important for Mr. Putin than economic stability of his country,” Poddubny said.

The expert added that economic interest of Russia and political interests of the government do not always align. “And while Russia will win from building nuclear objects in Iran and getting profits from the export of anti-missile and surface-to-air missile systems, the fact that Iranian crude oil is entering the market will significantly reduce the price on oil on the global market. And that will be a disaster for Russia’s budget,” Poddubny noted.

The expert concluded by saying that those are extremely “sensitive” things for Russia and that he cannot think of any direct economic benefits from the contract for Russia apart from intimidating the West with the emergence of a nuclear alliance.