Russian Reactors Risk Ukraine Spillover Into Iran Nuclear Talks

Russia signaled for the first time its standoff with the West isn’t isolated to Ukraine and that disagreements may emerge in nuclear talks with Iran, which is pursuing Russian reactors amid negotiations with world powers.

Russia is prepared to use the Iran negotiations as part of “retaliatory measures” against the U.S. and its European allies for sanctions they imposed over the seizure of Crimea, Deputy Foreign Minister Sergei Ryabkov said late yesterday. His comments were made hours after nuclear talks wrapped up in Vienna with diplomats from all sides upbeat on the prospect of a comprehensive accord, and saying the growing tensions over Ukraine hadn’t yet had an impact.

Rosatom Corp., the Russian state nuclear company, sent executives to Tehran to discuss building new reactors last week, just as the U.S. was hosting the head of Ukraine’s interim pro-West government. Iran’s Atomic Energy Organization said March 12 that Rosatom would build two new plants, and its ambassador to Moscow said this week that a deal would be signed within three months. The Russian company confirmed that “active negotiations” were held, while saying there isn’t an agreement ready to sign.

A pact on the reactors risks impeding the nuclear talks because it would increase the amount of enriched uranium that Iran needs, and bolster the Iranian case for being allowed to manufacture the fuel itself. That’s something Western powers have resisted, while Russia has been more accommodating.

‘Beyond Nuclear’

The split could be exacerbated if Iran signs a deal for new reactors during negotiations, said Paul Ingram, director of the London-based British-American Security Information Council.

“A plan that would require enrichment capacity is part of Iran’s narrative,” he said in a phone interview. “The Russians could be looking to develop and use leverage to build a relationship beyond nuclear into a bigger strategic relationship.”

Rosatom didn’t immediately respond to calls and e-mails seeking additional details about the reactor plan.

The U.S. and European Union have slapped sanctions on top Russian officials and threatened further action to punish President Vladimir Putin for his seizure of Ukrainian territory, in the biggest standoff since the Cold War.

Russia doesn’t want to use the Iran talks as “an element of raising the stakes,” Ryabkov said yesterday, according to the Interfax news agency. “But if we have to, we will introduce measures in return,” because Russia sees the issues at stake in Crimea as more important than the Iran talks, he was cited as saying.

Enriched Uranium

The next nuclear negotiations will start on April 7, seeking to build on the November interim accord and reach a final agreement by July. A key issue, and one on which Russia and the U.S. have been far apart, is the amount of uranium that Iran should be allowed to enrich.

The U.S. has insisted that United Nations Security Council resolutions ordering Iran to suspend uranium enrichment should be enforced, and says Iran can get supplies of the fuel from abroad. U.S. officials have signaled that they’re only open to limited enrichment under very restrictive monitoring.

“The real goal is to guarantee that they cannot get a nuclear weapon,” Secretary of State John Kerry told a Senate panel on March 13. A sufficient level of monitoring would allow other countries to know “well ahead of any potential of their breaking out.”

Putin has sounded less concerned.

‘Fully Entitled’

“They argue they will enrich uranium on their own, in line with existing international regulation,” he said in a June interview on RT television. “As long as they don’t break any rules, they’re fully entitled to do that.”

Since Russia supplies fuel for Iran’s only operating atomic power plant in Bushehr, allowing the Iranians to produce it instead would be a “commercial disadvantage” for Putin, according to Mark Fitzpatrick, director for non-proliferation at the International Institute for Strategic Studies.

“But it would possibly be to their political advantage to create trouble for the West,” he said in a phone interview from London.

The calculation of Iranian enrichment needs could be affected by a Russian reactor deal, according to the Carnegie Endowment for International Peace. If some of the fuel for the new units was to be produced domestically, Iran could argue that it needed more enrichment capacity and not less, the Washington-based group said in a report this month.

Design Information

Even under that scenario, it’s unlikely that Iran could duplicate the technology used by Rosatom to make reactor fuel, or that the Russians would “share design information,” said Tariq Rauf, a former senior official at the International Atomic Energy Agency who now directs the Stockholm International Peace Research Institute’s arms control research.

More probably, “Iran could provide low-enriched uranium to Russia,” which would upgrade it to the level needed in the nuclear plants, Rauf said in an interview.

Western officials have stressed the common interests that Russia shares with other participants in the Iran talks, including preventing an Iranian nuclear weapon and an arms race in the Middle East.

“I do not believe that Putin wants to sabotage the talks,” said Mark Hibbs, a Berlin-based Carnegie Endowment for International Peace analyst, in a telephone interview. “What we may see is an effort by the Russian Federation to position itself better in the Iran negotiations.”

Hossein Mousavian, a former spokesman for Iran’s nuclear negotiators, offered a different perspective.

With the U.S. and EU imposing sanctions on Putin, “logic follows that Russia will play Iran’s nuclear card” against them, he wrote in a March 16 op-ed in the online regional journal Al-Monitor. “Great economic rewards may also result from Russia cultivating closer relations with Iran.”

Before it's here, it's on the Bloomberg Terminal.