Iran is preparing to skirt Western sanctions and export up to 500,000 barrels of oil per day, valued at about $1.5 billion a month, to Russia in exchange for equipment and goods, in a move that could trigger more U.S. sanctions and further strain tensions between the two countries.
The bartered goods would include food and metals and not military equipment, Reuters reported.
Over the past five years, the United Nations Security Council has fired four rounds of sanctions at the Islamic Republic in attempts to reverse the nation’s uranium stockpile, which could be used to build bombs. The sanctions cap Iran’s oil exports at 1 million barrels per day, far below the 2.5 million barrels per day Iran exported in 2011. Iran has already far exceeded the sanctioned limit, exporting about 1.7 million barrels per day in February, the International Energy Agency reported last week.
Iranian and Russian officials have been negotiating the oil-for-goods deal since January, Reuters reported, noting at the time that with current oil prices near $100 a barrel, Iran would earn about an additional $1.5 billion a month. Now, the only step left is for Tehran and Moscow to agree on the oil price.
“Iran can swap around 300,000 barrels per day via the Caspian Sea and the rest from the [Middle East] Gulf, possibly Bandar Abbas port," one of the Iranian officials told the Voice of Russia radio program. "The price is lower than the international oil price, but not much, and there are few options. But in general, a few dollars lower than the market price."
The Iranian oil minister said this month that the country is determined to raise its trade volume with Russia under long-term deals.