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Oil-rich Iran looking for financial ties with Russia

Both sides in the past have considered a swap mechanism to facilitate oil-related trade.

By Daniel J. Graeber
Oil-rich Iran looking for financial ties with Russia
Iran sees an imminent opportunity to open the financial doors with Russia. Photo by DyMax/Shutterstock

TEHRAN, Aug. 23 (UPI) -- With sanctions pressures starting to fade, a representative from oil-rich Iran said the financial doors for cooperating with Russia were starting to open.

Iranian and Russian interests have aligned in the military effort to stem the tide of civil war in Syria, with Russian warplanes leaving from Iranian facilities in recent weeks. Negar Kabiri, an envoy for Iranian business interests in Russia, said monetary transactions between the two countries were now imminent.

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"The monetary transactions between two Iranian and Russian banks will start soon," Kabiri said.

Two years ago, when the sanctions noose was tightening on Tehran, Iran and Russia, itself under financial pressures, were reviewing the potential for an oil-for-goods deal. Iran at the time was cleared to export around 1 million barrels of oil per day and the swap had the potential to allow for an additional 500,000 bpd.

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Iranian authorities last week started preliminary talks with littoral countries to the Caspian Sea to start oil swaps. Oil swaps were halted with Iran's Caspian neighbors in 2012.

Iran has long been searching for a way around the U.S. dollar to circumvent sanctions imposed by Western powers in response to its controversial nuclear program. Some of those sanctions were eased in January after Iran was verified as meeting the terms of a multilateral nuclear deal last year, though banking restrictions remain in place.

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Iran this week started rolling out the draft terms of a new contract model for the oil industry. A director at a national oil company this week said the new contracts would be advantageous to the national interest even as they offer the chance for foreign investments in a post-sanctions Iran.

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For Russia, President Vladimir Putin spent most of the summer courting his Azeri and Iranian counterparts, meeting separately with each of the leaders since June. Iranian President Hassan Rouhani said trade relations with Russia have improved since the signing of multilateral nuclear agreement last year. Russia already supplies Iran with some of the fuel it needs to power its Bushehr nuclear power plant.

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