The alleged contract is being implemented and may be fulfilled in a year or two, the paper said, citing a top manager of a company producing S-300 components. The deal, worth at least $300 million, would be the most expensive one-time purchase of new armaments made by a former Soviet republic, the editor of online magazine Moscow Defense Brief, Mikhail Barabanov told Vedomosti.

However, Rosoboronexport spokesman Vyacheslav Davidenko told Interfax the company knows “nothing about any such contract.” Azerbaijani officials also said they did not have information on this issue.

The information on selling the system to Azerbaijan has sparked a new round of speculations in the media about the same contract with Iran, which is still in limbo. According to the deal signed in 2005, Russia should supply Iran with five S-300 systems. But its implementation has been delayed, as analysts say, for political reasons.

There were reports in the media that the new UN Security Council’s sanctions against Tehran would block the deal. Nevertheless, the contract between Russia and Iran has not been cancelled, Sergey Chemezov, the head of Rostekhnologii company, said on July 15. The final decision on signing or dropping the contract “must be the president’s decision,” RIA Novosti quoted him as saying.

Iranian officials have said Russia should fulfill its obligations and hinted Iran may otherwise try to produce its own missile systems. Some analysts predicted that if the contract is not fulfilled, Tehran could turn to China as its main arms supplier.

Relations between Russia and Iran have deteriorated after Moscow joined the UN Security Council’s sanctions against Tehran. The Iranian leadership has said it would be unwise for Russia to support the US’s moves.

However, on July 27, Russia criticized unilateral European Union sanctions imposed against Iran's energy sector. Moscow considers “unacceptable” the practice of unilateral or collective sanctions that go beyond the Security Council measures, the Russian Foreign Ministry said.

Although the information about the deal between Russia and Azerbaijan has not been confirmed, some analysts believe Baku may become an important factor in the Iranian nuclear issue.

Azerbaijan is modernizing its armed forces, they note. The former Soviet republic had advanced air defense systems. At the same time, many observers believe the purchase of S-300 systems would not change the balance of forces between Azerbaijan and Armenia. The two countries are at loggerheads over the breakaway Nagorny Karabakh region.

But if the S-300 deal took place, Baku could use S-300 to defend its air space from a possible “attack” from Iran, observers say. However, they stress such a possibility is not practicable.

Russia had already proposed to the US the use of the Gabala radar station in Azerbaijan. And for the US, relations with Baku have always been “more important” than with Tbilisi,” Caucasus analyst Vigen Akopyan told Regnum news agency.

If fears about the Iranian nuclear program are confirmed, then building an air defense shield in Azerbaijan is in Russia’s interests, the analyst stressed.

However, another Armenian analyst, Ruben Megrabyan, believes the alleged supply of the S-300 to Azerbaijan could really change the balance of forces between Baku and Yerevan. He also described the Iranian threat to Azerbaijan as “mythical.”

The information on the deal appeared before the visit of the Russian president to Armenia for the summit of the Collective Security Treaty Organization, and Yerevan should demand explanations from Russia, the analyst told Regnum.

Aleksandr Khramchikhin of the Institute of Political and Military Analysis also stressed it would be difficult “to imagine a direct war between Azerbaijan and Iran. The possible contract on purchasing S-300 should rather be considered in the context of Azerbaijani-Armenian relations, he told Prime Tass news agency. However, Armenia does not have “planes to be shot down by S-300,” he noted.

Some observers, however, call the alleged contract between Moscow and Baku “a normal thing.” Russia is a big arms supplier, and it sells weapons both to Azerbaijan and Armenia, Tatul Akopyan of the Civilitas analytical center said.

“The strategic partnership should not affect the co-operation with third countries,” he was quoted by Armenia Today news agency as saying. “From this point of view, I consider Russia’s position “acceptable.”

The Council of Defense Ministers of CIS States recently discussed the development of the integrated air defense system. Currently Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan and Ukraine are involved in this project. All the former Soviet republics strongly depend on Russia’s supplies in the air defense sphere.

Sergey Borisov,
Russian Opinion and Analysis Review, RT