Russia has pledged to fund the construction of a new NPP in Iran as part of a broader energy agreement that also includes a major gas deal. Iranian Oil Minister Mohsen Paknejad visited Moscow for talks with his Russian counterpart, Sergei Tsivilev, as part of the 18th Joint Economic Cooperation Commission.

Paknejad announced that Moscow and Tehran are strengthening their bilateral ties in peaceful nuclear energy, with the construction of a new NPP in Iran, to be financed through Russian funding. “Iran and Russia will continue their cooperation in the peaceful use of nuclear energy and the construction of new nuclear energy facilities and the completion of phases two and three of the Bushehr power plant using Moscow’s credit line,” he said during the closing ceremony of the commission.

According to Iranian state media, the two countries also agreed to a 55 billion cubic meters gas transfer deal. As part of the energy agreement, Paknejad announced that Iran will sign a $4bn deal with Russian companies to develop seven oil fields across the country.

“Multilateral cooperation between Iran and Russia through membership in the Shanghai Cooperation Organisation, BRICS, the Gas Exporting Countries Forum, and OPEC+ has led to the provision of common interests, peace, stability, and international security, and I am confident that this cooperation will deepen,” Paknejad noted.

Iran became a member of the Shanghai Cooperation Organisation (SCO), a Eurasian security and political group, in 2023. It also joined the BRICS group in 2024, a bloc that positions itself as an alternative to economic institutions such as the World Bank and the International Monetary Fund. In 2024, Iran also became an observer member of the Eurasian Economic Union (Russia, Kazakhstan, Belarus, Kyrgyzia and Armenia), with which it also has a free trade agreement.

These energy deals between Russia and Iran come in the run up to further nuclear talks between Iran and the US on possible revival of an amended agreement similar to the July 2015 Joint Comprehensive Plan of Action (JCPOA) between Iran the P5+1 group of countries (the USA, UK, France, Russia, and China plus Germany). Under the JCPOA, Iran had agreed to limit its nuclear development programme in return for the lifting of sanctions, imposed by the US and Europe after the 1979 revolution. Further sanctions were imposed in December 2006 pursuant to United Nations Security Council (UNSC) Resolution 1737 after Iran refused to comply with UNSC Resolution 1696, which demanded that Iran halt its uranium enrichment programme.

Some sanctions were lifted following the JCPOA but the US withdrew from the deal in 2018 prompting Iran to resume enrichment, which in turn saw the US and Europe reimpose sanctions. The US is now seeking a new agreement to curb Iran’s nuclear activities, while also threatening of military action, additional sanctions, and tariffs if an agreement is not reached.

With both Iran and Russia under Western sanctions bilateral ties have been increasingly strengthened. Earlier in April, Russian President Vladimir Putin signed a law officially ratifying a 20-year strategic partnership agreement with Tehran, further deepening their military cooperation.

 Moscow could potentially play an important diplomatic role in the ongoing US-Iran nuclear talks facilitating a potential agreement. It has been suggested that Russia could be considered a potential destination for Iran’s stockpile of highly enriched uranium (HEU) in the event of an agreement and also act as a guarantor. This option would allow Russia to return the HEU stockpile if Washington were to violate the deal, ensuring that Iran would not be penalised for American withdrawal or non-compliance.