Zangeneh: Russia Will Import 500,000 Barrels of Oil from Iran Daily Starting Next Week

Iran's Minister of Oil states that the operation to export 500,000 barrels of oil daily from Iran to Russia may begin next week. This trade is part of a swap agreement of Iranian oil for Russian goods, negotiations for which have been ongoing for two years. Bloomberg reported that Bijan Namdar Zangeneh, Iran's Minister of Oil, told reporters on Sunday, June 7, upon returning from the OPEC meeting in Vienna, that 'a large portion of Iran's oil imports to Russia will be paid for in cash, and we will use this money to purchase items from Russia.' In this context, Reuters also covered Zangeneh's remarks, noting that Russia had announced in April (two months ago) that the oil swap operation would be implemented. Bloomberg writes that Zangeneh stated he spoke with Alexander Novak, the Russian Minister of Energy, at the OPEC meeting, and it is currently planned to export 'less than 500,000 barrels of oil' to Russia, with the proceeds from this oil being used to purchase goods such as steel, wheat, and petroleum products from Russia. Zangeneh mentioned that Belarus and Kazakhstan would be able to receive Iran's oil exports to Russia, as these countries are members of the Eurasian Customs Union. It is still unclear what Kazakhstan, which currently exports more oil than Iran, will do with Iranian oil. Zangeneh also stated that Russia would participate in various projects in Iran in exchange for part of Iran's oil imports. In this regard, the Mehr news agency reported on Sunday, citing Mohsen Qamsari, the CEO of the National Iranian Oil Company, that 'this agreement does not mean a barter of goods for oil.' He emphasized that 'the Russians must take Iranian crude oil, sell it, and the money will remain in a fund,' adding that based on the resources of this fund, the purchase of various goods and equipment will be facilitated. The report adds that Iran and Russia have reached a final agreement to sell oil and create a joint fund for purchasing various goods and products in exchange for oil money. Iran's oil exports have halved since the imposition of sanctions. Previously, Iran exported about 480,000 barrels of oil to Europe, which was cut off in the second half of 2012. Other Iranian oil customers also reduced their purchases to obtain exemptions from U.S. sanctions, causing the country's oil exports to drop from 2.5 million barrels per day to about 1.2 million barrels in recent months. Iran is currently negotiating with six world powers to lift Western sanctions to reach a comprehensive nuclear agreement, with a deadline for this agreement until July 1.