During the period of the Shah, Soviet-Iranian relations were cool, if not hostile. Memories of the 1946 Soviet occupation of Northern Iran, the activities of the Iranian Communist Party, and the increasingly close U.S.-Iranian alliance kept Moscow and Tehran diplomatically far apart, although there was a considerable amount of trade between the two countries. Following the overthrow of the Shah, Moscow initially hoped the Khomeini regime would gravitate toward the Soviet Union. However, the renewed activities of the Iranian communist party, together with Tehran's anger at Moscow for its support of Baghdad during the Iran-Iraq war, kept the two countries apart until 1987, when Moscow increased its support for Iran. By 1989 Moscow had signed a major arms agreement with Tehran, and the military cooperation between the two countries continued into the post-Soviet period.

After the collapse of the Soviet Union, Iran emerged as Russia's primary ally in the Middle East. Moscow became Iran's most important supplier of sophisticated military equipment, including combat aircraft, tanks, and submarines, and began building a nuclear reactor for Tehran. For its part, Iran provided Moscow with important diplomatic assistance in combating the Taliban in Afghanistan and in achieving and maintaining the ceasefire in Tajikistan, and both countries sought to limit U.S. influence in Transcaucasia and Central Asia.

The close relations between Russia and Iran, which had begun in the last years of the Soviet Union under Gorbachev, developed steadily under both Yeltsin and Putin, with Putin even willing to abrogate the Gore-Chernomyrdin agreement, negotiated between the United States and Russia in 1995, which would have ended Russian arms sales to Iran by 2000.

Moscow was also willing, despite U.S. objections, to aid Iran in the development of the Shihab III intermediate-range ballistic missile and to supply Iran with nuclear reactors. However, there were areas of conflict in the Russian-Iranian relationship. First, the two countries were in competition over the transportation routes for the oil and natural gas of Central Asia and Transcaucasia. Iran claimed it provided the shortest and safest route for these energy resources to the outside world, while Russia wished to control the energy export routes of the states of the former Soviet Union, believing that these routes lay in the Russian sphere of influence. Second, by early 2001 Russia and Iran had come into conflict over the development of the energy resources of the Caspian Sea. Russia sided with Azerbaijan and Kazakhstan in their call for the development of their national sectors of the Caspian Sea, while Iran demanded either joint development of the Caspian Sea or a full 20 percent of the Caspian for itself. A third problem lay on the Russian side. Throughout the 1990s the conservative clerical regime in Iran became increasingly unpopular, and while it held the levers of power (army, police, and judiciary), the election of the Reformist Mohammed Khatami as Iran's President in 1997 (and his over-whelming reelection in 2001), along with the election in 2000 of a reformist Parliament (albeit one with limited power), led some in the Russian leadership to fear a possible Iranian-American rapprochement, which would have limited RussianPage 676  |  Top of Article influence in Iran. The possibilities of economic cooperation between the United States and Iran dwarfed those of Russia and Iran, particularly because both Russia and Iran throughout the 1990s encountered severe economic problems. Fortunately for Moscow, the conservative counterattack against both Khatami and the reformist Parliament at least temporarily prevented the rapprochement, as did President George W. Bush's labeling of Iran as part of the "axis of evil" in January 2002. On the other hand, Russian-Iranian relations were challenged by the new focus of cooperation between Russia and the United States after the terrorist attacks of September 11, 2001, and by Russia's acquiescence in the establishment of U.S. bases in central Asia.

In sum, throughout the 1990s and into the early twenty-first century, Russia and Iran were close economic, military, and diplomatic allies. However, it was unclear how long that alliance would remain strong.