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This working paper was prepared as part of the Russian International Affairs Council’s (RIAC) project Modern Russian–Iranian Relations. These two nations have great potential for bilateral cooperation, but that potential has not yet been fully realized. Incipient progress in negotiations on Iran’s nuclear programme and a prospective easing of the sanctions against Iran open up new possibilities for fostering and strengthening ties between Russia and Iran. This working paper analyses the current state of these two countries’ trade and economic ties; potential areas of cooperation in the Caspian region, Central Asia and the Middle East; and Russia’s future role in resolving the situation with Iran’s nuclear programme. The authors outline several specific areas and recommendations for bilateral dialogue, as well as actions that could bring cooperation to a new and higher level.