Putin has nothing to offer Iran after the war in Ukraine battered Russia’s economy

President Vlad Putin is running out of options. After the United States launched strikes on Iranian nuclear facilities over the weekend, Tehran turned to Moscow for help. But Iran may have picked the worst time to come knocking.

According to CNBC, Iran’s Foreign Minister Abbas Araghchi landed in Moscow on Monday to meet with Putin for what he called “serious consultations” following the attacks, which US President Donald Trump described as an “obliteration.”

Iran wants support. But Putin’s got nothing to give. Araghchi’s visit is Iran’s attempt to call in a favor after supplying Russia with drones and weapons throughout the Ukraine war. But Holger Schmieding, chief economist at Berenberg Bank, said on Monday that “Putin has probably little to offer beyond some words. He needs his weapons himself for his continued aggression against Ukraine.” Russia’s arsenal is too drained, its economy too shaky, and its global position too fragile to risk anything more than diplomatic silence.

Iran pleads, Russia stays quiet

Moscow’s entire approach has been minimal. No military support, no promises, not even a strong statement of condemnation against Israel or the US. Russia simply asked both sides to “negotiate a peaceful end.” That’s it.

The Kremlin knows that doing anything more risks blowing up its relationship with Washington at a time when Trump, who has historically maintained a friendship and public admiration for Putin, is back in the White House.

Schmieding warned that if Putin chooses Iran over diplomacy with Trump, it could backfire. “Trump may change tack and impose new heavy sanctions on Russia and/or weaken Putin’s position in other ways,” he said. It’s clear Putin is weighing that risk and choosing to stay on the sidelines.

There’s also a strategic gamble in all this. A war in the Middle East pulls the West’s attention away from Ukraine. It would also push oil prices higher, and that would mean more money for Russia’s war chest. But the cost could be bigger than the gain. Iran is one of Russia’s few allies in the region. If it gets seriously destabilized, Moscow loses everything it’s built up there; money, influence, and future deals.

Nikita Smagin from the Carnegie Russia Eurasia Center said Russia is now undecided. “On the one hand, Russia has invested heavily in various projects in Iran over the past three years, all of which could now go to waste,” Smagin said. “At the same time, Moscow hopes to benefit from Middle Eastern instability through rising oil prices and declining interest in Ukraine.”

Billions at stake, but no room to move

The economic stakes for Russia are massive. Just days before the strikes began, Iran’s ambassador to Moscow said Russia was the country’s largest foreign investor in 2024. While no figures were given, Smagin said Russian investments in Iran hit $2.76 billion last year.

This year, Moscow planned to pump in $8 billion into oil and gas projects alone. All of that is now in jeopardy. If Iran collapses under pressure, Russia loses years of economic work and regional leverage.

And back home, things are getting worse. After invading Ukraine in 2022, Russia became the most sanctioned country on Earth. Still, the Kremlin managed to keep the economy on life support by pushing oil exports to China and India, and using a shadow fleet to avoid Western shipping bans.

Official stats claim Russia’s economy grew 4.3% in 2024, higher than the U.K. (1.1%) and the US (2.8%). But that growth came almost entirely from defense spending.

The ruble rebounded hard, jumping over 40% this year, according to Bank of America. On paper, that looks strong. But inside the country, inflation won’t go down. Interest rates have jumped to 20%, and businesses are struggling to hire.

Even Russia’s economy minister said last Thursday the country was “on the verge” of a recession after what he called an economic “overheating.”

So while Iran begs, Putin stalls. He’s broke, stretched, and looking at an economy that’s barely holding together with duct tape. The war in Ukraine burned through his stockpile. And even though Iran was one of the few countries that helped him, Moscow doesn’t have anything left to return the favor.

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