TEMPO.CO, Jakarta - Iran and Russia are negotiating an oil-for-goods swap worth US$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."
U.S. and European sanctions have cut Iran's oil exports by more than half over the past 18 months to about 1 million barrels a day.
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 US$100 a barrel, Iran would earn about an additional US$1.5 billion a month.
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.
REUTERS | EKO ARI