Iran and Russia's Oil and Goods Barter Denied Again

Iran's Oil Minister has rejected claims regarding an agreement between Iran and Russia for the barter of oil and some essential goods, stating that the two countries are 'only' cooperating in the oil and gas industries. Bijan Zangeneh, in an interview with Mehr News Agency on Wednesday, December 19, said, 'The barter of Iranian oil for Russian goods is not true, and no such agreement has been made between the two countries.' He announced that Iran and Russia have only negotiated and reached an agreement on developing bilateral cooperation in the oil and gas industries, adding, 'Accordingly, Iran will utilize the technical and operational capabilities of Russian companies in the oil and gas industries.' Previously, various statements had been made by officials from the Islamic Republic of Iran and Russia regarding the barter of Iranian oil for Russian goods or services. Following the announcement of an agreement between Iran and Russia to construct at least two reactors, Jalil Jafari, a member of the Iranian Parliament's Energy Commission, stated on Saturday, November 24, that the cost of constructing these two reactors in Bushehr would be covered through oil barter, and 'there will be no pressure on the government and the public budget.' Mehr News Agency also quoted Alexey Ulyukayev, Russia's Minister of Economic Development, on Thursday, December 13, stating, 'I do not rule out the possibility that the implementation of this contract could start before the end of this year.' However, Mr. Zangeneh expressed ignorance regarding the comments made by the Russian Minister of Economic Development on Wednesday. Bartering Iranian oil for goods or services means that Iran provides its oil to a country and receives goods or services in return. Reuters first reported in late 2013 that the two countries were negotiating to barter 500,000 barrels of Iranian oil daily for Russian goods. Previous statements from Iranian officials also indicated confirmation of this report. For instance, Eshaq Jahangiri, Iran's First Vice President, stated in February 2014, 'We have discussed with the Russians the exchange of a large volume of oil resources for goods, which some have protested against, but we must say that if you do not enter Iran, others will come into this market, and there will be no place for you.' However, in recent months, differing statements have emerged from Iranian oil ministry officials. For example, Ali Majidi, former Deputy for Trade and International Affairs of Iran's Oil Minister, stated on Tuesday, September 9, that the two countries have agreed to cooperate in all sectors of energy, but 'the issue of bartering Iranian oil for Russian goods is not on the table at all.' On August 5, media from both countries reported the signing of a 'petroleum' memorandum between the two countries during the Iranian Oil Minister's visit to Moscow, but on August 17, Mr. Majidi told Mehr News Agency that this five-year memorandum includes the development of economic, commercial, and even oil cooperation, but no agreement for oil sales has been made. Nevertheless, two days after the signing of this memorandum, David Cohen, the U.S. Treasury's Deputy Assistant Secretary for Terrorism and Financial Intelligence, warned against any exchange of Iranian oil for Russian goods, stating that any entity entering into this transaction would face U.S. sanctions.