A $1.75 billion deal between Russia and Iran to produce Shahed-136 drones has soured, with Tehran feeling sidelined as Moscow upgrades the drones and manufactures them more cheaply — largely without Iranian input, Western officials told CNN.
Signed in 2023, the agreement aimed to produce 6,000 drones by September 2025. That target was met a year early, and Russia’s Alabuga factory now produces around 5,550 drones a month at about $70,000 each — down from $200,000 in 2022. Nearly 90% of production is localized, with Russian-made engines, electronics, and fuselages. The upgraded drones now have improved communications, longer battery life, and larger warheads.
Tehran reportedly expected greater returns — including weapons, tech transfers, and support in conflicts — but was disappointed during June’s 12-day war with Israel when Moscow offered only verbal condemnation. Iranian analysts say the relationship is “both cooperation and competition,” with Russia seeking to “get more and give less.”
Iranian officials also claim Russia has yet to pay for part of the deal, adding to frustration over stalled transfers of promised aeronautical technology. Still, some in Tehran believe the partnership will ultimately deliver military and economic benefits, citing reports of recent Russian arms shipments, including an S-400 air defense system.
Western intelligence sees the partnership as purely transactional, warning that Russia’s independence in drone production gives it leverage — and the ability to export upgraded, battle-tested Shaheds back to Iran if it chooses.
