Iran, Russia negotiating $1.5bn a month oil-for-goods deal

Updated 11 January 2014
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Iran, Russia negotiating $1.5bn a month oil-for-goods deal

LONDON/ANKARA: Iran and Russia are negotiating an oil-for-goods swap worth $1.5 billion a month that would enable Iran to lift oil exports substantially, undermining Western sanctions that helped persuade Tehran in November to agree to a preliminary deal to curb its nuclear program.
Russian and Iranian sources close to the barter negotiations said final details were in discussion for a deal under which Russia would buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.
"Good progress is being made at the moment with strong chances of success," said a Russian source. "We are discussing the details, and the date of signing a deal depends on those details." The Kremlin declined comment.
"Our desire is to sign the deal as soon as possible," said a senior Iranian official, who declined to be named. "Our officials are discussing the matter with the Russians and hopefully it will be inked soon, regardless of whether we can reach a (nuclear) agreement in Geneva."
It is not clear whether the deal would be implemented before the finalization of a nuclear agreement outlined in Geneva in November between Iran and six world powers.
Russian purchases of 500,000 bpd of Iranian crude would lift Iran's oil exports by 50 percent and provide a major boost to its struggling economy. With current oil prices near $100 a barrel, Iran would earn about an additional $1.5 billion a month.
"Iran has to find a way to accommodate more exports: This is the reason behind this," an Iranian official said. "Both sides should rush for it. Russia will be able to guarantee a large amount of trade with its neighbor and Iran will be able to overcome its export difficulties."
No details were available about the equipment and goods on offer from Russia.
Given Russia is a major oil exporter, the Iranian oil would likely be exported from Iran on Russia's account, with Russian goods and equipment bartered in exchange.
Most Iranian oil goes to Asia.
Iran's biggest oil buyer is China, which imported about 420,000 bpd in 2013. Unlike Iran's other oil buyers, China has not cut purchases much, despite urging by the United States to persuade.
Other major Asian buyers of Iranian oil, including Japan, South Korea and India, have cut imports sharply under pressure from Washington. Turkey also cut imports, while South Africa eliminated them.


Iran rial plunges to new lows as US sanctions loom

Updated 24 June 2018
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Iran rial plunges to new lows as US sanctions loom

  • The dollar was being offered for as much as 87,000 rials, compared to around 75,500 on Thursday
  • The currency has been sliding for months because of a weak economy

DUBAI: The Iranian rial plunged to a record low against the US dollar on the unofficial market on Sunday, continuing its slide amid fears of returning US sanctions after President Donald Trump in May withdrew from a deal on Tehran’s nuclear program.
The dollar was being offered for as much as 87,000 rials, compared to around 75,500 on Thursday, the last trading day before Iran’s weekend, according to foreign exchange website Bonbast.com, which tracks the unofficial market.
Iran’s semi-official news agency ISNA said the dollar had climbed to 87,000 rials on Sunday from about 74,000 before the weekend on the black market, and several Iranian websites carried similar reports.
The currency has been sliding for months because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who fear the pullout by Washington from the nuclear deal and renewed US sanctions against Tehran could shrink the country’s exports of oil and other goods.
The fall of the national currency has provoked a public outcry over the quick rise of prices of imported consumer goods.
Merchants at the mobile phone shopping centers Aladdin and Charsou in central Tehran protested against the rapid depreciation of the rial by shutting down their shops on Sunday, the semi-official news agency Fars reported.
A video posted on social media showed protesters marching and chanting “strike, strike!” The footage could not be authenticated independently by Reuters.
Hours later, Information and Communications Technology Minister Mohammad Javad Azari-Jahromi said on Twitter that he visited the protesting merchants.
“I will try to help provide hard currency for (mobile) equipment (imports),” Azari-Jahromi wrote, adding: “The merchants’ activity has now gone back to normal.”
Some of the US sanctions against Iran take effect after a 90-day “wind-down” period ending on Aug. 6, and the rest, most notably on the petroleum sector, after a 180-day “wind-down” period ending on Nov. 4.
The rial has weakened from around 65,000 rials just before Trump’s announcement of the US withdrawal in early May, and from 42,890 at the end of last year — a freefall that threatens to boost inflation, hurt living standards and reduce the ability of Iranians to travel abroad.
In an effort to halt the slide, Iranian authorities announced in April they were unifying the dollar’s official and black market exchange rates at a single level of 42,000, and banning any trade at other rates under the threat of arrest.
But this step has failed to stamp out the unofficial market because authorities have been supplying much less hard currency through official channels than consumers are demanding. Free market trade simply went underground, dealers said.