Russia Pushing for Oil-for-Goods Deal With Iran

Nov 30, 2014 — 19:27
The freedom Tower in Tehran's being lit up by floodlights.

Russia hopes a deal to supply grain and equipment to Iran in return for oil can be reached soon, Russia's Economy Minister Alexei Ulyukayev said Sunday.

"It [the deal] will affect not only grain, there are broad lists of goods. … We expect that [a deal] could be reached in the near future," Ulyukayev told reporters in Tehran, according to news agency RIA Novosti.

In January, Reuters reported that Moscow and Tehran were discussing a barter deal worth up to $20 billion that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.

Such an agreement would enable Iran to significantly raise oil exports despite sanctions over its nuclear program, and give the slowing Russian economy a much-needed boost. But it would also strain relations between Moscow and the West at a time when they are already frayed over the Ukraine crisis.

The United States has warned Russia that an oil-for-goods deal could run counter to nuclear talks between world powers and Iran, and might fall foul of U.S. sanctions.

Russia's Economy Ministry was not available for comment on Sunday, but in April, Finance Minister Anton Siluanov said Moscow would observe UN sanctions rules for any deal with Iran, rather than the tougher ones imposed unilaterally by the United States.

Ulyukayev did not specify a date when the deliveries of grain and equipment to Iran could start, but said discussions were continuing.

He said Russia was discussing supplying Iran with equipment for the oil and gas industry, agricultural machinery, cars, planes and electric generators, among other goods.

Iran and the six powers last Monday gave themselves seven more months to resolve a standoff on Iran's nuclear program that has seen crippling economic sanctions imposed on Tehran, and extended the partial easing of those sanctions that followed an interim agreement.