Dmitri Medvedev could be forgiven for having a celebratory shot of vodka with breakfast yesterday morning at the news that President Obama plans to abandon America’s missile defence shield in Eastern Europe. Mr Obama will have longer to wait before he can judge whether or not to celebrate.

At best, the development raises hopes of a warmer relationship between Moscow and Washington and the chance of greater co-operation on the many issues of global concern that founder under a Russian veto at the United Nations Security Council — Iran’s nuclear arsenal being the most pressing. At worst, it is proof to Moscow that Mr Obama is weak, that intransigence pays off and that the best way to get what it wants is to do nothing.

Moscow denies that any deal was made in advance, but the denial is semantic: it knows exactly what Washington wants. In February, President Obama sent a letter to Mr Medvedev setting out the trade. A shield in Eastern Europe might not be necessary, he noted, if Russia got on board against the Iranian nuclear threat. Mr Medvedev was cool on the letter, then complained of a lack of specifics. Next week he and Mr Obama meet on the sidelines of the United Nations General Assembly. That will be the time for specifics.

Washington wants tough new sanctions on Iran’s energy sector — sanctions that Russia has long opposed. Moscow seems divided on that now, at least publicly, with President Medvedev apparently mulling sanctions over, while Sergei Lavrov, his Foreign Minister, rules them out.

Russia could offer other help over Iran. In 2007 it signed a deal to provide Iran with its own S-300 anti-aircraft missile system to protect its nuclear facilities. Israel has vowed to bomb Iran if it believes that the system is on its way. Saudi Arabia has offered what amounts to a bribe, promising to buy $2 billion (£1.2 billion) in Russian arms if Moscow scraps the deal — an attractive offer when Russia is trying to increase its share of the Middle Eastern arms market.

Russia’s gain is Poland’s and the Czech Republic’s loss. They have missed out on the huge American military footprint that hosting the shield would have brought them, a presence that they saw as a bulwark against an assertive Russia. Ukraine and Georgia’s chances of admission to Nato look further away than ever, as does the Alliance’s easternward expansion.

The timing is disastrous for Ukraine in particular, given the Kremlin’s determination to reverse the pro-Western Orange Revolution and ensure victory for a pro-Russian candidate at the presidential elections in January. But just as Western encroachment into Russia’s “sphere of influence” seemed only to make Moscow more belligerent, a greater sense of security could make it more inclined to leave its neighbours alone. It is a faint hope for the former Soviet states.

The reaction of the Middle East reaction has been notably mute. If Russian pressure on Tehran begins to yield Iranian concessions on its nuclear programme, Israel could begin to negotiate peace with the Palestinians. A first step would be to heed Mr Obama’s calls to halt settlement building on the West Bank. A more compliant and less belligerent Iran would also reduce the threat of a Middle Eastern arms race, where Sunni Arab nations have started looking at the development of their own nuclear deterrents.

Saudi Arabia has argued for American protection over the region to deter an arms race. The redeployed shield could calm the nerves of Egypt, Turkey and Saudi Arabia, who have warned that they too could go nuclear if Iran is allowed to get the bomb.

Who stands to gain

Dream scenario
• Russia reverses course and backs tough new sanctions on Iran. Withdraws aid and nuclear fuel agreements with Tehran
• Iran feels the pressure and begins to negotiate the dismantling of its nuclear weapons programme Israel feels less threatened and, in return, freezes settlements as part of genuine efforts to forge peace with the Palestinians
• Arab nations feel less threatened by Iran and drop thoughts of developing their own nuclear capability
• Russia agrees a new arms reduction treaty with the US, slashing its nuclear stockpiles. It becomes less aggressive in its overtures to anti-US Latin American states such as Venezuela and reaches a compromise on Nato expansion

Nightmare scenario
• Russia pockets Obama’s missile defence concession but finds new gripes to continue blocking sanctions against Iran. It finally supplies S300 air-defence missiles to Tehran, which it has agreed to sell but not yet delivered
• An emboldened Iran continues to develop its nuclear weapons programme
• An increasingly rattled Israel digs in on peace talks, continues settlement building on Palestinian territory and prepares to strike at Iran’s nuclear facilities unilaterally. A Middle East arms race begins as Arabs look to develop their own nuclear deterrent
• Moscow continues to expand its influence in America’s backyard, meddle in the affairs of former Soviet states and use energy supply as a political weapon
• Mr Obama is left looking naive and weak

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