Update: On August 19, 2015, Russia Today announced that Tehran and Moscow have reached an agreement on the delivery of Russia‘s upgraded S‑300 surface-to-air missile systems. While the deal is yet to be officially signed, such a ceremony is expected to occur the week of August 24. It is believed that Russia will provide Iran with four battalions of S‑300 batteries. Deliveries of this highly-capable and destabilizing weapon system is expected to occur by the end of 2015. Iranian Defense Minister Hossein Dehgan also stated that Iran is currently in negotiations with Russia to purchase fighter aircraft.
On Monday, April 13, Russian President Vladimir Putin lifted the self-imposed ban on exporting its S‑300 air defense system to Iran. Although lifting the ban does not mean any systems are actually sold, the possibility complicates the U.S. and EU‘s negotiations with Iran over its nuclear program and, if a sale were made, would potentially destabilize the military balance in the region. It would also undermine the worst-case-scenario fall-back positions currently in place, were negotiations to fail and Iran to move forward with what is believed to be a nuclear weapons program.
In 2007, Russia initially agreed to sell the missile system to Iran, but subsequently rescinded its offer under diplomatic pressure from the U.S. and Israel. Since then, Russia has publicly considered delivering on the contract multiple times, but did not moved forward in a material way. Russia‘s decision to reopen the issue follows discussions last February between Rostec, Rosoboronexort and Iran, where Moscow‘s main arms producer and exporter offered Tehran five battalions of its latest S‑300VM system.
Speculation regarding the timing of this decision has hinged on the following considerations: 1) the sale strengthens Moscow’s arms supply relationship with Iran prior to any potential nuclear agreement and reopening with the West; 2) the sale might now be used as a bargaining chip against Israel and the U.S. regarding other issues of interest to Russia; and 3) the disruption of an already tenuous nuclear framework agreement between the West and Iran could be of strategic benefit to Moscow and its concern over low oil prices; and 4) the move could be partially to forestall the $4 billion lawsuit launched by Iran‘s Defense Ministry and Aerospace Industries Organizations over the initial canceling of the contract (although good relations between the two countries on several other fronts, including in the nuclear industry and in the recently announced oil-for-grain arrangement likely mooted any real threat stemming from this legal claim).