Iran to Begin Oil Exports to Russia Under Oil-For-Goods Barter Deal

Published October 29th, 2017 - 02:51 GMT
Iran’s crude oil exports to Russia are part of an oil-for-goods barter scheme with Russia. (File photo)
Iran’s crude oil exports to Russia are part of an oil-for-goods barter scheme with Russia. (File photo)

Iran’s crude oil exports to Russia will begin soon under an oil-for-goods barter scheme first conceived in 2014, Iranian Deputy Minister of Petroleum Ali Kardor said on Saturday.

Kardor said banking problems related to the exports of Iranian oil to Russia had been resolved, which had made the opening letters of credit (LCs) possible.

Iranian and Russian officials have announced several times the imminent launch of the long-heralded arrangement which has not come through. Whether it will finally kick in this time, it has to be waited and seen.

The arrangement dates back to 2014 under which Moscow would buy up to 500,000 barrels per day (bpd) of Iranian oil in exchange for Russian equipment and goods. It called for swapping around 300,000 bpd via the Caspian Sea and the rest from the Persian Gulf.

For now, the two sides are considering shipping 100,000 bpd of Iranian oil to Russia, with supplies being “either physical or swap-based,” according to Russian Energy Minister Alexander Novak.

Kardor said Iran is about to receive 50% of payment in euros and the rest in goods and services.

Russian oil and gas companies have signed a series of MoUs with Iran where Lukoil, Gazprom, and Zarubezhneft plan to develop Paydar Gharb, Abteymour and Mansouri oil fields.

On Wednesday, Russia’s state-owned Rosgeologia said it was in talks with Zarubezhneft, Gazprom Neft and Lukoil on joint implementation of projects worth $1.5 billion in Iran, Tass news agency reported.

"Of course, we are negotiating ... Big companies have already announced their participation in joint projects on the Iranian territory. Accordingly, we can act in tandem regarding geological exploration and service operations, and we are involved in it now," Rosgeologia CEO Roman Panov said.

According to the National Iranian Oil Company (NIOC)'s exploration head Seyyed Saleh Hendi, negotiations were underway with Lukoil, Rosneft, Zarubezhneft, Tatneft, Gazprom and Gazpromneft to turn MoUs to firm contracts for development of more than 10 oil and gas fields in Iran.

Speaking to Russia's Sputnik news agency, Hendi said Russian companies can acquire better shares in Iran's oil and gas market via establishing strategic alliances with European, Chinese and South East Asian companies.

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