Accessibility links

Breaking News

Russia And Iran Turn To Barter Trade

IRAN -- Russian Energy Minister Aleksandr Novak (L) exchanges signed agreements with Iranian Energy Minister Reza Ardakanian during Economic conference in Isfahan, June 18, 2019

Iran imports Russian equipment and agricultural products in exchange for crude oil it had already sold to Moscow, Russian Energy Minister Aleksandr Novak said on Tuesday, June 18, in Tehran.

Novak arrived in Tehran Monday to hold talks with the Iranian Oil Minister, Bijan Namdar Zangeneh. The Islamic Republic state-run monopolized TV&Radio news agency (IRIB) cited Namdar Zanganeh as saying ahead of the meeting with his Russian guest, "we are discussing bilateral relations and Iran-Russia global cooperation."

A day later, responding to a question in Tehran, Novak disclosed, "Yes, we have talked about oil for goods procedure," adding, "Russian producers of agricultural goods are currently receiving the money deposited through selling Iranian oil. We talked about the prospects of oil for goods exchange and the ways to continue it."

Tehran and Moscow signed a deal two years ago for Iran to export its crude to Russia in exchange for Russian products, Bijan Namdar Zangeneh said at the time.

The agreement was initially reached in 2014 when Iran was under international sanctions over its controversial nuclear program.
The deal allowed Iran to sell 100,000 barrels of oil per day (bpd) to Russia to procure foodstuff and goods for an estimated $2 billion annually, based on the amount of oil discussed.

When the sanctions against Tehran were lifted in 2016, Novak said the deal was no longer necessary.
However, in March 2017, Novak announced the deal was again on the table, with Russia buying 100,000 barrels per day from Iran and selling the country goods.

Later, in August 2017, Novak said that Russia would begin receiving Iranian oil shipments at the end of the following month, adding that "the details of legal documents are in the final stages."
For his part, Russian Trade Representative in Iran, Andre Luganski, said that Moscow would in return export to Tehran goods under this program, according to Interfax.

But it is not clear how Iran transfers the oil to Russia and if the exchange is fully taking lace or not.
Heading a 120-strong delegation, Novak has visited Iran for a new round of joint economic commission meetings.

Russian Ambassador to Tehran Levan Dzhagaryan said Sunday that Tehran, Beijing and Moscow need to form a strategic trilateral cooperation bond to defy the U.S. unilateral measures against the Joint Comprehensive Plan of Action (JCPOA) or Tehran's nuclear deal of 2015 with world powers, Fars news agency affiliated to the Islamic Revolution Guards Corps reported.

Washington dropped the deal last year in May and reimposed its unilateral sanctions on Tehran, which have crippled Iran's economy. Tehran is virtually deprived of any significant oil exports to its traditional customers, who prefer not to violate U.S. sanctions.