Iran to sign oil contract to sell Russia 100,000 bpd

Iran announced on Tuesday it will begin selling 100,000 barrels of oil a day to Russia within the next 15 days and receive payment half in cash and half in goods and services, the Iranian Students’ News Agency (ISNA) reported.

Iranian Oil Minister Bijan Namdar Zanganeh provided details about the deal after meeting Russian energy minister Alexander Novak in Tehran, ISNA said.

“Of course we were ready to sign the contract tonight but our Russian counterpart was in a hurry and had to go to the airport,” Zanganeh said. He added that a number of Russian companies have already signed memorandums of understanding with Iranian companies.

Zanganeh said that Russia will be cooperating with an OPEC decision last November to cut production levels and will be reducing its oil output by 300,000 bpd, according to ISNA.

Reuters

10 Comments on "Iran to sign oil contract to sell Russia 100,000 bpd"

peakyeast on Tue, 21st Feb 2017 3:23 pm

To Russia? Exporting oil to top 2 world oil exporter?

This is some way of worming around some existing or future embargo?

From my understanding Iran has just been freed of those embargos?

Cloggie on Tue, 21st Feb 2017 3:51 pm

My guess: Russia has a Eurasian-wide pipeline system. Russia can pump Iranian oil both to Europa as well as China.

peakyeast on Tue, 21st Feb 2017 4:54 pm

@Cloggie: That sounds reasonable to some extent… But couldnt Iran just ship through strait of Homuz/Gulf of Oman to China? Its the straight way without too many complications.

Perhaps its the GOODs that are interesting.

I also wonder: Is the cash in Rubles?

Cloggie on Tue, 21st Feb 2017 5:06 pm

http://www.reuters.com/article/us-iran-russia-oil-idUSKBN1602F1

makati1 on Tue, 21st Feb 2017 5:20 pm

peaky, of course it is in Rubles. Iran does not deal in USDs except where forced to. The ‘trade goods’ could be weapon systems or wheat or anything Russia exports. It is a deal to tie Iran even closer to Russia.

The oil is going somewhere, but not Russia. 100K bbls/day is a drop in the bucket but the money is needed by Iran.

This is just another small step away from the US dollar system. Every one counts.

peakyeast on Tue, 21st Feb 2017 5:40 pm

@mak: It could be in Rubles only, but it could also be a combination of currencies IMO – for example some Yuan.

makati1 on Tue, 21st Feb 2017 5:59 pm

peaky, yes, of course. Yuan would also be reasonable for its trade with China. I suspect that it is a combination of the two. It does not need dollars.

rockman on Tue, 21st Feb 2017 9:49 pm

The US is a major oil importer and we’ve been EXPORTING oil for more then 3 decades with the largest yearly total (170 million bbls) in 2015. Russia is a major oil exporter and IMPORTED 11 million bbls of oil in 2014.

Come on guys. Most have been around here long enough to understand the complexities of oil trades. IOW there are different oils needed by different countries. Such as Canada, a major oil EXPORTER, has IMPORTED 100’s of millions of bbls of light US oil. And for a simple reason: they needed it.

brough on Wed, 22nd Feb 2017 3:20 am

You’re right Rockman, this is just a story about an everyday trade in the oil-biz. A bit of a none news item, I’m suprised Reuters bothered to post it. Could give both parties in the transaction some advice. Never done trade with the Iranians, but many times with the Ruskies. Nothing will happen here unless the paperwork is sorted properly.

rockman on Wed, 22nd Feb 2017 9:06 am

“I’m surprised Reuters bothered to post it” I suspect Reuters is like many news agencies with websites: some component of its revenue stream comes from the hit count. So tossing out some red meat can help. The disappointment is not including a few simple facts: like the Russian oil import history the Rockman pulled up in a 30 second net search.

Iran to sign oil contract to sell Russia 100,000 bpd

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