Energy
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No Oil-for-Goods Agreement With Russia

No Oil-for-Goods  Agreement With RussiaNo Oil-for-Goods  Agreement With Russia

Oil Minister Bijan Namdar Zanganeh rejected assertions by the Russian economy minister that an agreement has been reached between the two counties to barter oil in return for goods, Mehr news agency reported.

Following recent reports quoting Alexei Ulyukayev as saying Moscow plans to sign contracts with Iran to start delivering grain and industrial products to Tehran in return for oil, Zanganeh said: “No such agreement has been reached with Russia."

Ulyukayev during his visit to Tehran in November called for such a deal to be reached in the near future, adding that the central banks of Russia and Iran are working on ways to make payments in currencies of two countries and preparatory work had begun to this end.

Zanganeh said Iran and Russia will only cooperate in the gas and oil industry, adding “Russian companies will provide Iran’s oil and gas industry with technical and operational support.”

In January, Reuters reported that Moscow and Tehran were discussing a barter deal that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.

The value of the deal is unclear. The Reuters report said the deal was expected to reach $15 to $20 billion and would be done in stages with an initial $6 billion to $8 billion tranche.

Russia and Iran signed a memorandum of understanding (MoU) in August for a period of five years, intensifying economic cooperation between the two countries. The document lays the foundation for a comprehensive multi-billion dollar trade deal in oil.

The two sides signed four MoUs on Sept. 9 in the oil and gas, petrochemical, industry and mining sectors, including an MoU between Iran International Petrochemical Company and the Russian Gas Stroll to build a fertilizer plant.

Over the years Iran and Russia have developed close ties in various fields, including nuclear energy projects.  Russia, for example, took part in constructing the Bushehr Nuclear Power Plant, which was completed in 2013. Following the construction, Russia guaranteed its involvement for two years, with Russian experts staying on hand to advise personnel and provide technical support.

Financialtribune.com