Shaheds For What? Russia Drone Deal May Have Given Iran Seller’s Remorse

Ukrainian Foreign Minister Andrii Sybiha shows Israeli Foreign Minister Gideon Saar a Russian kamikaze drone Geran-2, a copy of an Iranian-made Shahed-136 unmanned aerial vehicle in Kyiv, Ukraine, on July 23, 2025. (Photo by Maxym Marusenko/NurPhoto via Getty Images)

NurPhoto via Getty Images

Russia’s Iranian-designed propeller-driven Shahed-136 one-way explosive-laden attack drones have repeatedly targeted Ukraine’s cities for just under three years straight. During that time, Russia has applied substantial modifications, changing the engines, warheads, and even the color of these drones. Today, Iran reportedly regrets aspects of the arrangement under which it provided Russia with its homegrown drones, especially since Moscow has shown an increased capability to manufacture and modify its Shaheds independently.

Russia launched a record-breaking 6,129 attacks against Ukraine using Shahed-type drones this July, up from 5,337 attacks in June. On July 9 alone, Russia targeted Ukraine with 728 drones. Not content with these large-scale bombardments, Moscow aims to strike Ukraine with a single salvo of 2,000 Shahed drones!

Such enormous barrages are made possible by Russia’s localized production of Shahed-136s at the Alabuga Special Economic Zone over 600 miles east of Moscow. Iran permitted Russia to produce these drones as part of a $1.75 billion deal reached in early 2023.

As early as February 2023, Shahed debris uncovered in Ukraine contained multipurpose warheads suitable for attacks against larger infrastructure targets like the Ukrainian electricity grid. Later that year, Shaheds appeared with conspicuously new black coatingspaint containing carbon that makes them more difficult for radar to detect. Most recently, much faster, high-flying jet-powered Shaheds are forcing Ukraine to expend its most advanced surface-to-air missiles.

Tehran has some severe seller’s remorse since Moscow has localized almost 90 percent of its Shahed production and made these more sophisticated versions with limited Iranian input, according to a CNN report published on Friday.

Additionally, Russia is expanding its production facilities so that it can churn out even more drones.

These developments, coupled with the lack of substantial support it received from Russia during its 12-day war against Israel in June, have frustrated Iran.

Iran officially denies it sold Russia any military drones since the full-scale invasion of Ukraine started in February 2022, admitting only to selling Moscow some drones before the war. In reality, Tehran delivered several Shaheds via sea and air and supplied Russia with extensive technology transfers since early in the war. The 2023 contract initially envisaged the production of 6,000 Shaheds at Alabuga by September 2025, which Russia reached well ahead of schedule. The scale of its localized drone production exceeded initial expectations and also significantly lowered the per-unit cost of these drones for Moscow.

What Iran is getting in return for this valuable assistance is far from clear. Reports of Shahed-136 transfers in 2022 led to speculation that Iran would receive the Su-35 Flanker fighter jets it had ordered before the war, possibly as part of a barter arrangement. Many speculated that a batch of two dozen factory-fresh Flankers Moscow had initially built for Egypt would now go to Iran. However, Russia recently delivered some of them to Algeria, suggesting that’s not the case, or that Iran will ultimately receive fewer than 24. Iranian journalist Saeed Azimi reported in 2023 that Tehran had ordered and paid for 50 Su-35s by 2021 but never received a single one. To date, Russia has only delivered Iran a small number of subsonic Yak-130 trainer jets.

A report released by the Center for Advanced Defense Studies in May 2025 revealed that Russia has paid Iran in gold bars in return for its assistance in building this enormous new drone industry. The report uncovered at least $104 million worth of gold bars delivered as part of a contract between Alabuga and the sanctioned Tehran-based Sahara Thunder. Interestingly, CNN’s Friday report mentions that Sahara Thunder has complained about payments not being made.

It’s unclear whether Iran only sought gold in return for this military support.

While hundreds of Iranian-designed drones rain down on Ukrainian cities every night, not a single new Russian-supplied Su-35 was available to defend Iranian airspace in the face of Israel’s unrelenting aerial bombardments in June. Consequently, Tehran’s reported frustration with the limited returns it’s getting from its arrangement with Moscow is hardly surprising.

“From Russia’s unfulfilled promises to deliver defense systems like the S-400 and Su-35 fighter jets, to repeated delays in military cooperation, all suggest that this partnership is not based on mutual trust, but rather on opportunistic, short-term interests,” lamented an Aug. 5 editorial in an Iranian reformist daily.

Western intelligence sources cited in CNN’s report also dubbed Russian cooperation with Iran as “purely transactional and utilitarian.”

Which leads one to question what, if anything, Iran is getting from all of this.

Some analysts anticipate that Russia may eventually re-export its improved Shaheds back to Iran. However, there aren’t yet any indications Moscow will do so. On the other hand, there are indications that Russia is providing North Korea the ability to manufacture Shaheds locally in return for Pyongyang’s extensive support for the war effort against Ukraine. Moscow has also delivered a medium-range Pantsir-S1 air defense missile system to Pyongyang and may soon supply its vintage air force with fourth-generation MiG-29 and Su-27 fighters.

The CNN report also briefly speculated that a July 11 flight of a Russian Ilyushin Il-76 could have contained components for an S-400 system, although that hasn’t been confirmed. Incidentally, such speculation comes almost exactly a year after reports indicating Russia begun delivering unspecified air defense equipment to Tehran. Whatever might have been in that delivery, it did not prevent Israel from striking Iran’s existing S-300 systems last Oct. 26 nor even hinder its unprecedented June air campaign.

While much remains unclear, it’s certainly plausible that Iran feels it has gotten the short end of the stick in its military-technical cooperation with Russia.