Novak says Russia, Iran to finalize oil barter deal

By Azernews

By Ali Mustafayev

Russia and Iran examine details of the ‘oil for goods’ program, said Alexander Novak, the Russian Energy Minister.

“We finalize the details. The question is primarily being examined in terms of financial settlement,” the minister said on the sidelines of the Eastern Economic Forum on September 6, Ria Novosti reports.

The deal dates back to 2014 when Iran tried to boost vital energy exports amid the intensified Western sanctions.  Then, the two countries were discussing a barter deal that would see Moscow buy up to 500,000 barrels a day (bpd) of Iranian oil in exchange for Russian equipment and goods.

The swap deal was halted during the tenure of former President Mahmoud Ahmadinejad as authorities questioned its economic merits.

In May 2017, Iranian Oil Minister Bijan Namdar Zangeneh said Tehran and Moscow have signed an agreement whereby Iran will sell crude to Russia in exchange for products.

Novak previously said that the volume of oil supply from Iran is 100,000 barrels per day, which is 5 billion tons per year. The minister also mentioned that Russia’s state trading enterprise Promsirieimport has been authorized by the government to carry out the purchase of Iran’s oil through the oil-for-goods. 

 Russian Trade Representative in Iran, Andrei Lugansky, said that Russia can supply Iran with goods worth $ 45 billion within the framework of this program.

Iran and Russia have formed a strong alliance in recent years and ramped up efforts to boost defense cooperation, trade ties, and cultural interaction. The trade cooperation between the two regional neighbors strengthened following the signing of nuke deal in 2015 and removal of the international sanctions.

Iranian oil exports decreased by 50 percent after international sanctions against the country were tightened in 2001 due to a dispute over Tehran's nuclear program. 

The country plans to raise oil output by about 200,000 bpd to around 4 million bpd by the end of 2017. It was exempted from the OPEC deal to reduce output to regain market share after Western sanctions over its disputed nuclear programme were lilted in January 2016.