Russia Supplying Grains, Other Goods for Iranian Oil

Russia Supplying Grains, Other Goods for Iranian OilRussia Supplying Grains, Other Goods for Iranian Oil

Russia has started supplying grains, equipment and construction materials to Iran in exchange for crude oil under a barter deal, Russian Deputy Foreign Minister Sergei Ryabkov said on Monday.

"I wanted to draw your attention to the rolling out of the oil-for-goods deal, which is on a very significant scale," Ryabkov told Russian senators, Reuters reported.

Russia has been an ally of Iran in international talks over Tehran's nuclear program that has led to an interim deal under which Iran would curb the program and allow international control in exchange for ending economic sanctions. Russia hopes to benefit from any such move if the preliminary nuclear agreement is followed by a technical one as planned by the end of June and has already moved ahead with an oil-for-goods swap.

"In exchange for Iranian crude oil supplies, we are delivering certain products. This is not banned or limited under the current sanctions regime," he added, declining to give more details.

Iran is the third largest buyer of Russian wheat, and Moscow and Tehran have been discussing the deal since early 2014.

Sources told Reuters a year ago a deal worth up to $20 billion was being discussed that would involve Moscow buying up to 500,000 barrels of Iranian oil a day in exchange for Russian equipment and goods.

"Iran can swap around 300,000 barrels per day via the Caspian Sea and the rest from the (Middle East) Gulf, possibly Bandar Abbas port," Reuters cited an Iranian officials as saying last April.

"The price (under negotiation) is lower than the international oil price, but not much, and there are few options. But in general, a few dollars lower than the market price."

Oil was priced around $100 a barrel at the time of report. Brent was traded above $58 a barrel on Monday.