Hosted by Christina Ruffini and Sir Richard Dearlove
Guest
Alexander Gabuev
Alexander Gabuev is the Director of the Carnegie Russia Eurasia Center and discusses Russia's calculated role in the escalating war in Iran.
Episode Summary
Russia may be issuing verbal condemnations from the sidelines of the conflict in Iran, but behind the scenes, it’s leveraging its relationship with Iran to give the US a “taste of its own medicine.” Former MI6 Chief Sir Richard Dearlove and Times Radio political editor Kate McCann sit down with Alexander Gabuev, director of the Carnegie Russia Eurasia Center, to discuss Russia’s calculated role in the escalating war in Iran. Gabuev explains why the US being preoccupied in fighting another Middle Eastern conflict is a “gift” to Putin, including how temporary sanctions relief and the continued closure of the Strait of Hormuz boosts Russian oil revenues. Together, they also analyze the impact of the war on Ukraine’s security and energy infrastructure, as well as how continued economic strain and repression in Russia may limit its involvement in the conflict.
In this episode:
01:35 – Why the Iran War helps Russia
04:17 – Oil shock and Russian windfall
16:48 – The Iran-Russia alliance
23:11 – Limits of Kremlin support
28:24 – Iran War knock-on effects for Ukraine
32:58 – Ukraine’s Gulf alliance strategy
38:05 – Russian public mood and repression
42:47 – One Decision: What’s Trump’s next move?
44:00 – Sir Richard and Kate discussion
Hosted by Sir Richard Dearlove (former MI6 Chief) and Kate McCann (Political Editor at Times Radio).
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Transcript
COLD OPEN
Dearlove: Vladimir Putin is the ultimate apostle of payback. What incentive does Russia have to actually get actively involved to keep this conflict going? It doesn't seem that Iran actually is getting a very good deal at all, and this must undermine Russian credibility as an ally.
Gabuev: It is plausible that the Iranian regime will come out resilient, being able to impose its will at least on its neighbors. And if Russia can claim some contribution to that, that's not a very small feat, I would say.
INTRODUCTION
Mccann: Hello, and welcome to One Decision. I am your cohost, Kate McCann, and I'm joined by my cohost, Sir Richard Dearlove. Hi, Sir Richard.
Dearlove: Hi, Kate. Nice to be with you again doing these recordings.
Mccann: Lovely to see you. And this week, we zoom in on Russia's calculated role in the escalating war in Iran. While standing idly on the sidelines issuing mere verbal condemnations, Moscow is quietly profiting from the fallout and attempting to rewrite the global balance of power. So to get more insight on the Kremlin's long term aims, we turn today to Russian foreign policy expert, Sascha Gabuev. Sascha, good morning.
Gabuev: Hi. Good morning. Thanks for having me.
Mccann: Sascha, welcome to the podcast. Sascha is the current director of the Carnegie Russia Eurasia Center based in Berlin, and his commentary has appeared in publications like The Economist, The Financial Times, The Wall Street Journal, and The New York Times. And, Sascha, I know that this is your area of expertise, so we are delighted to have you with us on the podcast today. I suppose we should start by really throwing this over to you. When we look at what's going on in Iran, and I'm aware that there are lots of moving parts and minute to minute things are changing, when you look at that conflict and you see it through Vladimir Putin's eyes, what do you see?
INTERVIEW
Gabuev: Well, first of all, you're absolutely right, Kate. It's a very dynamic conflict. We are recording this on Tuesday, April 7. Trump's ultimatum expires this evening, 8 p.m. DC time. Well, we know that Trump's ultimatums come and go, and they're pretty movable. However, the escalation of the rhetoric, the various assets that The US has assembled in the region, look pretty grim. So we don't know what's gonna happen next day. However, if I zoom out, not having a crystal ball to penetrate Vladimir Putin's mind, but having watched the Russian foreign policymaking, both how the sausage is being made and the external manifestation, and also talking to some people there still, I guess that whatever stash of champagne and sparkling hasn't been uncorked during the Trump inauguration and over the last year, has been uncorked over the last month, because this war is definitely a gift to Russia and to Vladimir Putin personally, although he didn't engineer it. And it's a gift for three reasons. One, it really gets The US bogged down in a protracted Middle East conflict that for now doesn't look like has a very good outcome for The United States. Point number two, it really helps to dwindle very vital resources that Ukraine needs for its self defense, particularly the interceptors for Patriot air defense systems that are the only viable antidote for Russian ballistic missiles. And number three, not least important, is that the Russian revenues from elevated hydrocarbon prices, prices of fertilizers, and ultimately, most likely, prices in global food markets will also increase cash flow to Putin's war chest. So these three elements alone taken together make the Russians pretty happy. And although this conflict is not of their making, they're definitely happy to cash in on everything what this war is to deliver.
Mccann: Can we start at the final one of those three? And then I know Sir Richard is really interested in picking your brains when it comes to what this means for the Ukraine conflict. But in terms of oil prices, can you explain to our listeners? Because it's not straightforward, is it? Russia taxes oil in a slightly different way. So Ukraine targeting oil exports positions on Russia's coast or Russian vessels isn't necessarily as straightforward as it looks when it comes to damaging the Russian economy. Can you just explain the relationship between what's going on in Iran with the Strait of Hormuz, the oil prices and them sort of increasing rapidly, and how that's helping Russia?
Gabuev: Sure. Everything what I will say is based on my conversations with my great colleague Sergei Vakulenko, who is a senior fellow at Carnegie, is a longtime watcher of the Russian oil industry and practitioner. He used to be chief of strategy for Gazprom Neft, the second largest state owned oil company, and knows issues in and out. So, in his calculation, every $10 of price increase per Brent barrel provides Russia Inc, both the state budget and the companies, roughly 95 to 100,000,000 US dollars a day. Since the price has gone up from roughly 75, like mid seventies, to 110, and it fluctuates, Russia cashes in about $250,000,000 or probably more every single day. The way it works is that the prices that we are looking at are the futures prices of oil. Right? So these are the future deliveries. However, right now, we feel scarcity of physical volumes of oil in the markets already, because Strait of Hormuz is responsible for pumping around 20% of global oil supply every day. And some of the local producers like Saudi Arabia, which has a pipeline, can reroute that. Iran is letting some cargo through, including its own cargo. However, the squeeze on the physical volumes of oil available to the global markets is already palpable. And you see that in actions by many governments across the world. I live in Europe, in Berlin, so the price at the pump is already very visible here. The government now starts to regulate the prices. So last week, the German government has ordered the gas stations to increase the prices only once a day in order to reduce this volatility. In Asia, in some countries, we see rationing of commercially available petrol as well as petrol needed for local agricultural production. So the ramifications are already there, and Russia is cashing in. So what's happening in the way that Russia collects its tax money is that it collects it at the well. No matter how much the company exports and so on, the state taxes oil barrel at the well and pockets the gains. So, if some of the volumes get lost through Ukrainian attacks, and we can discuss that as well, the state has already taken its cut into the earnings. So, most likely, the Russian tax revenues in April alone will be roughly $12,000,000,000 higher than in March. Right? So, this is pretty much the price of the war. And again, that's a projection we are talking, we are very early on in April and so on. Things might change. But the way that Russia profits is undeniable. And then Ukraine deploys very smart tactics in trying to reduce the Russian oil profits by targeting its export infrastructure, both in the largest sea oil port of Novorossiysk, in the Black Sea, and two smaller but also very significant ports on the Baltic Sea, Primorsk and Ust-Luga. However, Ukrainians have been improving their attacking capabilities over the last couple of years, and I think that this year they demonstrate that they can evade Russian air defenses, that they can penetrate the Russian air defense bubble constantly and deliver damages, basically every three to five days, these facilities get hit. However, the pace of repair for now is such that Russia is able to compensate for this. So, some of the oil that is stored there is burned and lost, so it's irrecoverable losses. But Ukraine has, for now, to hit really the loading capacity to really make these ports absolutely untenable and make it impossible for Russians to use. This doesn't happen. So the ports stop their loading for a day or two, and then they double down. Like, last couple of days, Ust-Luga was, I think, servicing about five vessels a day, just trying to load as much as they can and ship this oil. So, yes, Ukrainian attacks are creating a dent in the Russian oil profits, but this dent is probably not fully compensating the earnings that Russia is making. And final point, one of the major markets for Russia is also China and buyers in Indo Pacific. Russia has a pipeline that goes to the Pacific. Russia has a direct pipeline that goes into China. And Russia has an oil port that sends a lot of tankers to the Indo Pacific as well. So, that's where Ukrainians cannot hit because of the physical limitations. They're just thousands and thousands of kilometers away. So, that's the market where Russia is earning a lot of money. And then Trump administration, in its first moves, ironically, is to issue a license by OFAC, by the US Treasury, to allow stranded Russian oils that are stuck in tankers to be able to be sold across the world, including the largest buyers in India, in The Pacific, China, and so on. And that's also a big windfall for the Kremlin.
Dearlove: Sascha, in reading recently a French analysis, actually it was in the journal Le Grand Continent, which I'm sure you're familiar with, they were reporting that Russian oil revenues in 2026 were less than half of what they were in 2025. What I'm saying is that the Russian revenue from oil had been massively degraded through all sorts of measures, sanctions, and whatever else. And that actually, this initial boost, which happens this month in April, your analysis I agree with, won't actually have much impact on the Russian war effort to begin with. I mean, it might if it's sustained over a longer term. And, I mean, what happens now if, for example, Trump really does escalate and the regime in Iran becomes impotent? I mean, they can't sort of run the country, govern the country any longer. And we must, in some respects, be getting relatively close to that point, because it's even quite hard to understand what the governing infrastructure is. I mean, it could well be okay. I'm playing devil's advocate a bit. This apparent massive advantage actually evaporates rather quickly.
Gabuev: It is possible, but I think that as every war, this one is contingent, and it really depends on what will happen in the coming days and weeks. I agree with you. The current level of the oil prices might be a short term blip. However, the longer the war and destruction continues, it is possible that the oil prices will stay elevated. And that's the kind of most basic scenario I think that many people and institutions are looking into, for a simple reason. Even if the governance in Iran is destroyed, we will not look into what will happen to the country itself. But the question is whether whatever is left of the Iranian regime is credibly able to deter normal shipping via the Strait of Hormuz. And I think that we can envisage scenarios where, oh yes, they can do that, because they can launch their Shahed drones and so on without even controlling the coastline and increase the insurance cost and so on. So, it will not fully interdict the shipping, but you really need to go in and eradicate what's left of the regime, which is, as we know from all of The US adventures in the region, in the neighboring country, is quite costly. Whether Trump will go there, I don't have a crystal ball to read Vladimir Putin's mind. You need probably 20 more balls to read President Trump's mind, because it's changing all the time, and there seem to be multiple persons in him coexisting. However, I think that this is kind of one element which may keep the prices up. The second element is the level of destruction that has been already underway in The Gulf for both gas exporting infrastructure and oil exporting infrastructure. We know that producers in The Gulf definitely have an inbuilt incentive to talk up the level of damage in order for President Trump to walk away, claim victory, and stop the hostilities. However, all of the satellite imagery available tells that the damage is substantial, and the reconstruction will take some time. So, the prices will be kept elevated. And then, if the regime is not fully done, and there is a new order in the Strait of Hormuz, the prices stay elevated. Or Trump walks away, Bibi Netanyahu and the Israelis walk with them, but they go into what the Israelis say is maintenance mode. You know, you cut the grass every now and then, the Iranians rebuild elements of their air defense bubble, and the Israelis come in to cut this, and then Iran starts to retaliate, hit the infrastructure, interdict the shipping in Strait of Hormuz. It's a totally plausible scenario. So with that, if you are, for example, China, which is hedged against this, are you interested in more oil and gas infrastructure that connects you to Russia or less? Probably more. And that's another way that Putin can profit from this. It's getting more gains in the China market. That's long term. It takes some years to build additional infrastructure. But China has an inbuilt incentive to go along this path.
Mccann: Sascha, can I ask you, given what you've just set out there, about the ways in which Russia benefits in the short term and in the long term, what incentive does Russia have to help Iran, and in what way might that be plausible? I mean, we've seen reporting, for example, about Russia potentially helping Iran with targeting, you know, identifying targets and helping guide Iran in that way. And there is obviously a pact or at least some kind of treaty between Russia and Iran, although not necessarily militarily. What incentive does Russia have to actually get actively involved to keep this conflict going?
Gabuev: I guess that, first of all, the treaty that has been signed between Iran and Russia is not a security alliance. Russia doesn't have an obligation to come to Iranian defenses. However, it's a pretty elaborate treaty that envisages various ways that the countries would cooperate. And long before the war in Ukraine and the full scale invasion of Ukraine, Iran was a very important Russia's regional partner in the Middle East. However, Russia was trying all the time to balance its relationship in The Gulf and the broader Middle East and have a productive relationship with Saudi Arabia, a very productive relationship with Israel. And actually, personal bond between Putin and Netanyahu was pretty thick before October seventh attacks. And all the time, Russia tried to play this balancing act where its relationship with Iran and its proxies like Syria were balanced against a very healthy and solid relationship with Saudi Arabia and others. But war in Ukraine has tilted this balance, and now Iran is de facto Russia's most important partner in the whole region and is one of the major allies in Russia's war against Ukraine. I would say that the war has become an organizing principle of Russia's foreign policy, and in every relationship, Russia is looking for three things: one, how can this country help my direct military effort on the battlefield in Ukraine? Second, how can this country help my embattled economy to evade sanctions and earn more money? And three, since The US and the West is so involved in helping Ukrainian self defense, how can this country help me to pay The US back and really give it taste of its own medicine? Ironically, Iran is one of the few countries that checks all the three boxes. Iran was sharing sensitive military technology, particularly the Shahed drones that Russians have upgraded, but nevertheless, it was a major and remains a supplier to the Russian war machine. Russia has learned a lot from Iranian infrastructure around the shadow fleet and sanctions evasion. And three, I think, is the most important. That's exactly the payback time. My former boss, the former president of Carnegie, William Burns, in his capacity as the CIA director, so not my boss then, said that Vladimir Putin is the ultimate apostle of payback. And I think that's a very apt characterization. So now is the time to pay The US the blood debt that has been created by The US and other services, including the service that Sir Richard used to lead, help for Ukrainian legitimate self defense. The West has turned intelligence military assistance for Ukrainian brave defenders into an industrial killing machine, through which tens of thousands of Russian servicemen have lost their lives. Not unprecedented. We've been there during the Cold War, but this is something very, very new in the living memory.
Mccann: So the Russians have the incentives. And you're saying that you think that they would then get involved, actively involved?
Gabuev: Yes. I guess that we have pretty credible reports that the Russians are involved. However, the way they can be involved is limited by two factors. One is their own war in Ukraine. They have plenty of stuff that Iran would need. They have pretty robust production of air defenses. They have a pretty robust production of missiles and drones, and so on and so forth. Whether they have the time to get this into the country between the previous war June last year and this time, we don't know, probably not. But also, these are exactly the same systems that they need themselves in their war against Ukraine, because Ukrainians are so successful and the war consumes so much of Russian air defenses and so on. So, in terms of hardware, their ability to help is limited. However, they have assets that are there in the press: intelligence, helping Iranians with the targeting data on telling them where certain US or allied assets are in order to strike them, food supplies, medicine, stuff that helps Iran to stabilize the regime, and to keep the ball rolling. So another limiting factor would be, how do you calibrate that to not really anger Donald Trump? Because Russia is still engaged in this diplomatic game with him, trying to string the Americans along to get a deal over Ukraine on its terms. So I think that that results in help that is probably palpable. We read about that in the press. This is mostly leaks from intelligence services that seem to be very credible. Russia has ability to help. Russia has a motive to help. Most likely Russia is indeed helping Iran. However, this help is calibrated both because of the objective limitations that Russia has and subjective limitations because Russia doesn't want to cross a certain imaginary line that Donald Trump has.
Dearlove: Can I just raise the question of the extent to which this support for Iran is, let's say, marginal? And if you look at the Russian record with regard to Venezuela, maybe we could include Cuba in that now. We can certainly include Syria. It has these deals or, let's say, cooperation agreements or expresses a degree of support. But when it actually comes to it, it's much more making statements which are, you know, aggressive and tough, but in reality, not really being able to do very much at all because they are, as you have said, so obsessed and wound up with the war in Ukraine. They're tied down by that obligation that their ability to come to the assistance of Iran is actually pretty marginal. Maybe some targeting from overhead or something like that from time to time, maybe a bit of intelligence cooperation. You've described the massive advantage to Russia, with which I agree. It doesn't seem that Iran actually is getting a very good deal at all, and this must undermine Russian credibility as an ally if you look at the examples I've enumerated.
Gabuev: I agree with you, but with a couple of caveats. Number one, I guess that in places like Venezuela and Syria, Russia was both punching above its weight against The United States and the West that didn't see these theaters as really priority theaters, where you need to spend a lot of blood and treasure to change the regimes. And that was probably lessons learned during war in Iraq, the Afghanistan adventure, and so on. I'm not an American, but everything what I read tells me that Americans are tired of never ending wars. And that created a room for the Russians to go in where there is a power vacuum or where The US doesn't see it as a priority to get really massively involved. And I think that the red lines that President Barack Obama has famously pronounced in case of Bashar Assad using chemical weapons against its own citizens and then doing nothing material has really incentivized the Russians to step in. However, if Russians bump against a pretty resourceful and decisive United States, particularly with its allies, like in case of a tandem of Americans working together with the Israelis, there is very little that Russia can do. Because these theaters are not where Russia has a lot of assets, these are not existential for Russia, and risking an all out war with The United States over the fate of Nicolas Maduro, or the fate of the communist regime in Cuba, is definitely not what Russia is seeking. So that's point number one. I think that Russia can back down. However, in case of Syria, we see that the Russians managed to maintain their military installations there. The new president of Syria has been to Moscow twice already. And it's interesting that the Russians managed, like out of all of the misery of collapse of Assad, to keep their involvement in reduced form, but still be there. As for the Iranians, I don't think that the Iranians have expected the Russians to come in, declare war on The United States, and be as involved as a real alliance would mean, because they don't have an alliance. But this limited help is probably still not inconsequential. Yes, it pales in comparison to what, for example, The US and the West have done to Ukraine. And that shows you just the power asymmetry between a collective West, particularly with a resourceful, strategically thinking Captain America like the one we've experienced under Joe Biden leadership, Russia definitely can do far, far, far less. However, it still moves the needle a little bit. And I guess Iran, being a much weaker party, still proves to be pretty formidable and resourceful. This war, correct me if I'm wrong, but doesn't look like a spectacular success. After the decapitation strike, after blowing up Iranian air defenses and military and so on, I don't think that the objectives of regime change have been achieved. And, again, we'll see what will happen, but it is also plausible that the Iranian regime will come out alive, resilient, being able to impose its will at least on its neighbors. And if Russia can claim some contribution to that, that's not a very small feat, I would say.
THE UKRAINE DIMENSION
Mccann: Should we talk about the other element of this conversation, which is something we've touched on a couple of times so far, and it's the Ukraine conflict? Now, obviously, President Zelensky can sense the danger because he has made it his mission to really flag through visits, you know, to European capitals, for example, but also through speeches. And I think becoming more robust on social media, he recognizes the danger that Ukraine is in here, partly through the distraction elements and partly through the the weaponry element, I think, you highlighted, but also, I think, something broader than that, which is this realignment. And I'm really interested in what you think about where that leaves the Ukraine Russia conflict. What you said about China and the incentive that China has to rely more on Russia, that would seem to suggest that Russia's place in the world is going to shift after this. Where do you think we are when it comes to the Ukraine Russia conflict and finding some kind of solution to that?
Gabuev: I would focus on kinda more material practical things than the kinda broader Russia's role in this conflict and so on. My view that the invasion of Ukraine was, well, a moral crime, but also a horrible strategic mistake. If you are seeking to boost Russia's security and prosperity, that was the worst thing to do, because you've created a sworn, resourced enemy next to your door that knows your country very well, that has a lot of material and grievances to endanger your security for many, many years to come, and there is no easy path to normalization or reconciliation between the two neighborly nations of Russia and Ukraine. You have expanded NATO. You have reactivated the sense that core of NATO's mission is deterrence against Russia. You've destroyed your pillar of prosperity, being trade and technological cooperation with Europe, and you're increasingly dependent on China. I don't see any long term benefits for Russia stemming from this war, strategically speaking. And I guess that Russia's position in this world is more diminished. Right? But that's kind of the bigger picture. Smaller picture, and just if we move to a more operational level, I think that the key trade off here and the danger for Ukraine are twofold. Number one, the export revenues. So Russia will have more resources, more money to throw into its military industry and to throw at Ukraine. That's negative. And two, which is very crucial, are the interceptors for Patriot. Ukraine, with the help of its Western partners, has developed a really tremendous defense industrial base, particularly located in Europe, that has all of the variety of defensive and offensive weapons, tactically for the frontline, and more strategically, to hit targets like Russian oil assets and so on. Ukrainians know how to handle Russian drones, Russian cruise missiles, and these types of weapons, defensive and offensive, are expanding. The only bottleneck is really Russian ballistic missiles. And for that, the antidote are Patriot systems supplied by The US. Given the rate of consumption of interceptors to Patriots, the war in The Middle East is definitely eating out into resources available to Ukraine. So if throughout this year, Russia builds a bigger stash of its ballistic missiles, and The US and its allies eat through the stash of Patriot interceptors, come winter or late fall, Russia will be able to launch massive attacks against Ukrainian rear and destroy many more power plants, ports, and other facilities vital for Ukrainian military economy, for the viability of Ukrainian cities, and for viability of Ukrainian economy going forward. And that will be the major downside. And I think that when President Zelensky talks about his concerns, that's the key issue on his mind. He's absolutely right. That's very worrisome.
Dearlove: Zelensky has been around the Middle East, and there's talk of him obtaining new support and new friends. And, of course, if you take the Saudis at the moment with a high price of oil, they've got pretty deep pockets when it comes to cementing Ukraine. I mean, also, we have this other side issue, but could be crucial where if Magyar wins the Hungarian election, the EU money that hasn't been released to Ukraine could so you could have a conjunction of funds coming in from, let's say, Saudi and The Gulf States and the EU simultaneously, which, to an extent, would counterbalance the sort of analysis we've made in talking about the issue with, you know, increased oil revenues. So I suppose the point I'm making is that we aren't in a situation of static balance. It's highly dynamic. There are so many uncertainties. And I suppose my other question for you, which I don't know the answer to, is there any imminent addition to the Patriot system, in terms of ballistic missile defense becoming available? For example, if Ukraine has this massive increase in funding, which it can then tap into a different market. I mean, I don't know the answer to that question, but you may.
Gabuev: Okay, Sir Richard. I agree with you that the way Ukrainians play that military assets card that they have, the really unique expertise in counter drone warfare, is very smart. And I hear they're getting tons of advice, but that's a very bold strategic move, and that's the silver lining for them in this conflict. They have demonstrated that they have capabilities to shoot down drones. Like, the drones that Iranians operate are still 2022, 2023 technology. This is kind of child's game for Ukrainians because they have to deal with much more sophisticated Russian versions of these drones, and they're quite successful. So, if the Gulf's injection of capital into production of these weapons creates revenue streams for the Ukraine defense industry and, by extension, the Ukrainian state, as well as scale to produce these systems, like in bigger numbers. Maybe some production will be localized in The Gulf. Maybe they will expand production in Ukraine. And in Europe, that's good news. The problem is the time lag, so it will take some time for this new production to materialize. Nevertheless, we know that Ukrainians have been nimble, so that's positive news. Same goes for potential injection of capital into Ukrainian budget. We don't have information about that, but that would be smart to negotiate if you're playing team Ukraine. And third point is we know that the Russians have been using Dubai and other places in The Gulf for smuggling components that they need for their defense industry, particularly Western components. And if the Ukrainians can negotiate with local players that they really clamp down on these routes, that would be also a very smart move. I guess, however, that on Patriots interceptors, that's really the crucial bottleneck. There is just no other available system that takes out the Russian ballistic missiles so effectively as Patriots do. There's simply none. Developing the alternatives and so on will take some time. There is an Italian French alternative that's not as successful, unfortunately. And then here is the crucial gap where the Ukrainians will have this shortage of missile defense systems, and the Russians may have an advantage because of their stash of ballistic missiles. However, whether that's crucial or not, we don't know, because the Russians have tried to knock out Ukrainian power grid last year and the year before, and they started this bombardment in 2022, and they haven't been successful. It doesn't mean that they will never be successful. They might, at some point, and that's exactly what keeps me very worried. But again, this war is contingent, and the story of this war is that the Russians have a big economic, material, financial manpower advantage, and they still haven't been able to convert that into a decisive blow to Ukrainian self defense effort. Ukrainians have proven themselves to be very resilient, brave, nimble, and they get a lot of help from very smart and resourceful partners.
Mccann: Do you have any information? And I understand it's difficult to maybe to obtain this. But do you have any information about how the Russian people feel about what's going on right now, about the perception of the war in Ukraine and the perception of what's going on in Iran, how that's helping or hindering?
Gabuev: I guess, first of all, public opinion is worth following. And yes, we have polling data from a country at war with really draconian censorship. For a conversation that we are having, I would land a prison term of a year and a half two officially already, because you cannot discuss these issues honestly and have a sane conversation about that in Russia. However, we've seen that the approval ratings of President Putin and United Russia, his parliamentary party, Russia is facing a parliamentary election this fall, are going down. The most likely trigger for that is not anything what's happening in either Middle East or Ukraine, but the deterioration of the Russian economy that was very, very palpable beginning of this year and the first half of last year. So the cumulative effect of big expenditures, like 40% of the budget spent on the war effort, very high interest rate that the Central Bank of Russia uses in order to suppress inflation, plus the sanctions effect, all of that has finally created a dent in this confidence that the Russian economy feels okay, and the citizens are feeling that. And the Russians have started to implement restrictions on Internet, really suppressing Internet connectivity, including mobile Internet, in large cities, including Moscow, and that's deeply, deeply unpopular. So it is connected to war in Ukraine and the regime's obsession about Ukrainian drones, about potential attacks on Putin, about people being dissatisfied about the economic downturn and so on. So we see that kinda affecting the popularity. However, one warning is that this is a very repressive society, a very atomized society, where price of protest is prohibitive. So, even if people hate Vladimir Putin's guts, it's very difficult to expect that they will show up to the streets and try to topple the regime. We are very far from that, if that ever happens.
Dearlove: I was going to say that it's an irony that the characteristic shared by Iran and Russia is that both of them have the Internet switched off at the moment, and that both of them are very autocratic, repressive regimes. And amongst educated Russians and amongst educated Iranians, of which there are many, it has a very high rate of literacy. This point cannot be entirely lost on those, you know, suffering in these sort of circumstances. We, you know, we don't necessarily think about it ourselves because we take these facilities for granted, but it is extraordinary when you look and compare the two countries to see the similarities of repression.
Gabuev: That's true. However, I don't think that there are great public avenues in Russia to unpack the whole crisis that the country has found itself in, thanks to Putin's foreign policy choices and the society and the elites' complicit acceptance of that. Well, Putin was boiling the frog of the Russian critical thinking and civil society and all of the checks and balances for quite some time. He is in charge for more than a quarter century. And I don't think that there is, for now, a space in Russia to start this conversation of how much this war against Ukraine and confrontation with the West has benefited us as a nation, has helped our security and prosperity. And this is why people unfortunately fall into the narratives provided to them by propaganda that, oh, the West is out to get us. Oh, the Brits hate us so much, and everything what's bad in our country is thanks to MI6. Right? I all the time meet very smart people who believe in these conspiracy theories, and it's sad. The only way is just to have this calm conversation, which is not happening inside the country. This is why people like me have been pushed out into political exile.
Mccann: Sascha, we like to end this podcast by asking people for the one decision that they are watching out for this week. It could be a political decision. It could be something else. In the context of everything we've been talking about, what do you think is the one moment, the one decision that you have an eye on this week?
Gabuev: Well, we have Trump's ultimatum expiring on the day we are recording this podcast. I think that it will have crucial effect whether Trump really decides to hit bridges, power plants, desalination plants, in Iran, and the way that the Iranian regime may respond to this escalation. We're entering yet another unpredictable, uncharted chapter of this conflict.
Mccann: And I think we've been through so many.
Gabuev: Yeah. It just seems like it's been two years, though it's been just a couple of weeks.
Mccann: It's a long time, but a short time. Sascha, it's been so brilliant to have you with us today. Thank you so much for sharing your expertise. I've got so much to think about after that conversation, and I'm sure our listeners will too. Thank you very much for your time.
Gabuev: Sascha, thank you. Fascinating discussion.
ANALYSIS WITH SIR RICHARD DEARLOVE
Mccann: Thank you so much, Sir Richard and Kate. So, Richard, I thought that was really fascinating with Sascha. Some of the things that he said, I mean, I don't know about you, but for me, the thing that is really going to stick with me is how much Russia is making just from the conflict in Iran in terms of the oil revenues and the fact that when you think about how it felt like the tide had been turning, you know, the Russian economy had really taken a hit. It was really, really not producing in the same way that it had been. It just feels and I know it's early days, and Sascha said things can change, but it just feels like that boost to Russian economic fortunes is so important and so significant.
Dearlove: Yeah. I think he's right. And a $100,000,000 a day is a very substantial sum. I had already seen that quoted in other journals, and some people even say it might be an underestimate. And given that Putin's biggest problem at the moment is the Russian economy and the impact on ordinary Russians, it's beginning to hurt badly. This is a significant improvement maybe of his political and economic prospects. And I thought what was very clear from Sascha's analysis was that, you know, the advantages to Russia are multiple, and we don't necessarily see them because, you know, they're, to an extent below the surface apart from the financial one. And no wonder Russia is embracing this opportunity, although you could claim, you know, it's a byproduct. And I think, ironically, the advantages to Iran of the relationship are nothing like so significant. In fact, you could even argue there's a downside for Iran in their attachment to Russia, because it affects the way the rest of the Gulf Arab states think about the conflict. I think this is a really important discussion and great insight, and makes us realize that there is a further perspective which is worrying. And the final point he made, I think, about the supply of Patriots being diminished to a point where they're not gonna be available for defense in Ukraine puts us in anticipation of a real deterioration in Ukraine's military situation in the late autumn, early winter of this year.
Mccann: And some really difficult decisions for us to grapple with as a country. Because, you know, if Trump's appetite for helping Ukraine after this and, you know, so much remains up in the air, but if his appetite is lessened even more, are we willing to step up? Is Europe willing to step up? I mean, you could really clearly hear there from Sascha that there isn't an alternative. There's not an alternative to the Patriot system. But, you know, I remember speaking to one of our guests about how Russian citizens have endured one of the most difficult winters they ever have. And this fear about taking down the entire energy infrastructure in Ukraine just looms over the coming winter. And almost the idea that although Ukraine has been plucky and determined, every country has a limit, and every group of citizens have a limit. And can people really take another winter like the one that they already had to endure? I think that that's such an important point to make. It couldn't be more clearly stated, and that's the first time I've had a discussion around the war in Iran, the war in Ukraine, which makes this point so precisely, so clearly.
Dearlove: So heads up to our listeners. There's something there to worry about.
Mccann: More to worry about. More to add to the list, unfortunately, but something to keep an eye on and especially the reaction to that warning because it won't be the first time or the last time that we hear that. Thank you very much for tuning in today. That is all for this episode. For more conversations with leading decision makers and thinkers, and as Sir Richard said there, to really stay ahead of the curve, you can find all of our chats on onedecision.com or on our YouTube page. There are additional commentaries, conversations, and some explainers there if you'd like to have a look. I'm Kate McCann, and I've been joined by Sir Richard Dearlove. Thank you very much for listening.
