"Vladimir Putin inherited a strong Russian-Iranian relationship from his predecessor, Boris Yeltsin. Russia made major arms agreements with Iran under Yeltsin, selling Tehran jet planes, tanks, and submarines, and also began building a nuclear reactor for Iran at Bushehr. The two countries also cooperated on regional issues such as Tajikistan and Afghanistan, and Yeltsin valued the low Iranian profile during the first Chechen war (1994-96). Putin strengthened the relationship further, beginning his rule by abrogating the Gore-Chenonymdin agreement under which Russia was to cease selling arms to Iran by 2000. While Putin and Iran were to have some problems over Chechnya and the optimal exit route for Caspian Sea oil and natural gas, these were overcome by 2005 when Iran emerged--despite its clandestine nuclear program--as Putin's most important ally in the Middle East, as Russia sought to reemerge as a major power there. Moscow increasingly became Iran's protector against the sanctions that first the United States and then the European Union sought to impose because of Iran's violation of international agreements. Putin's policy on Iran, however, contained some serious risks for Moscow, including a sharply deteriorating relationship with the United States and the possibility that newly-elected Iranian President Mahmud Ahmadinezhad, an Islamic fundamentalist, might one day challenge Russia over its policy in Chechyna."
Strategic Studies Institute: http://www.StrategicStudiesInstitute.army.mil/