Iran joins Russia to end petrodollar dominance

In a commentary on February 04, 2022, The National Interest said Iran and Russia, as two countries subject to US sanctions, are seeking to undermine the petrodollar’s dominance in global finance and trade.

Following is an excerpt of the article:

During Iranian President Ebrahim Raisi’s recent visit to Moscow, a number of agreements with Russian oil and gas companies related to constructing petro-refineries and transferring technology and equipment were signed.

Vladimir Putin is the first Russian president to visit Iran since Josef Stalin’s visit in 1943. Since 2007, Putin has traveled to Tehran twice to attend a summit of Caspian littoral states, and in each visit, he met with Leader of the Islamic Revolution Ayatollah Ali Khamenei.

In 2007, Ayatollah Khamenei told Putin “A powerful Russia is in Iran’s interest,” to which Putin replied, “The interest of the Russian nation lies in a powerful and influential Iran in the international scene.”  

Prior to the 1979 Revolution, the United States had total domination over Iranian politics. After the revolution and during Saddam Hussein’s protracted war against Iran, both Washington and Moscow heavily supported Iraq’s invasion of Iran.

But, after the Iraq-Iran War, Moscow changed its policy toward Iran and sought to build a friendship while the United States and the West embraced hostility. The détente between Tehran and Moscow has had significant consequences for the region’s geopolitics. 

Both Iran and Russia “admonish the United States’ hypocrisy on human rights, terrorism, and unilateralism.”

Ayatollah Khamenei made it clear, “Tehran and Moscow must step up cooperation to isolate the United States and help stabilize the Middle East.” As a result, Tehran and Moscow have directed their policies in West Asia to isolate the United States. Tehran and Moscow’s full-blown support prevented the Assad government from collapsing, while the United States and its allies supported the war in Syria aimed at overthrowing Bashar al-Assad. 

There are numerous areas that Iran and Russia can find common ground. To elaborate further, both combat extremist groups, such as ISIS and al-Qaeda; both admonish the United States’ hypocrisy on human rights, terrorism, and unilateralism; both grapple with US sanctions and hope to topple the petrodollar’s dominance in global finance and trade. 

On the economic front, geographical proximity and transit connections are likely to strengthen trade and business between the two countries. In some ways, the North-South corridor of trade, which passes through the historic cities of the Caucasus through the Persian Gulf and India, will be restored. The Russian dream to access the warm waters of the Persian Gulf may soon materialize.  

Nevertheless, there are also divergences between Iran and Russia on some issues. For example, Russia has close ties with Israel, while Iran considers Israel an enemy. Russia also seeks to attract Turkey and Saudi Arabia away from the United States.

Kazem Jalali, Iran’s Ambassador to Russia emphasizes how President Ebrahim Raisi’s visit to Moscow is a “turning point” in relations between the two countries. “Iranians begrudge the Tsarist Russia” but “today’s Russia is different from the Tsarist Russia.”

Jalali added, “Russia is facing the West, and Putin and his close associates look positively at Raisi’s presidency.”

Today, Iran is dealing with the “White Tsar” (current Russia), which is different from “Red Tsar” (the old Russia).

In his meeting with Putin, President Raisi said, “The relations between Tehran and Moscow are on the path towards strategic ties.”