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Iran, Russia Ruffle US Feathers With Oil-Swap Deal

Tyler Durden's picture




 

This morning's apparent U-turn in US-Iran relations - when the US demanded the UN rescind Iran's invite to the Syrian peace conference having somewhat instigated their invitation in the first place - is a little confusing for some. However, as OilPrice's Joao Peixe points out, reports are emerging that Iran and Russia are in talks about a potential $1.5 billion oil-for-goods swap that is sure to upset the powers that be in Washington.

 

Submitted by Joao Peixe via OilPrice.com,

Reports are emerging that Iran and Russia are in talks about a potential $1.5 billion oil-for-goods swap that could boost Iranian oil exports, prompting harsh responses from Washington, which says such a deal could trigger new US sanctions.

 

So far, talks are progressing to the point that Russia could purchase up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods, according to Reuters.

 

"We are concerned about these reports and Secretary (of State John) Kerry directly expressed this concern with (Russian) Foreign Minister (Sergei) Lavrov…  If the reports are true, such a deal would raise serious concerns as it would be inconsistent with the terms of the P5+1 agreement with Iran and could potentially trigger US sanctions," Caitlin Hayden, spokeswoman for the White House National Security Council, told Reuters.

 

Russian purchases of 500,000 bpd of Iranian crude would lift Iran's oil exports by 50% and infuse the struggling economy with some $1.5 billion a month, some sources say.

 

Since sanctions were slapped on Iran in July 2012, exports have fallen by half and Iran is losing up to $5 billion per moth is revenues.

 

In the meantime, a nuclear agreement reached in November with Iran and world powers is in the process of being finalized, and the news of the potential Russian-Iranian oil swap deal plays to the hands of Iran hawks in Washington who are keen to seen the November agreement collapse.

 

The November agreement is a six-month deal to lift some trade sanctions if Tehran curtailed its nuclear program. Technical talks on the agreement began last week.

Under the terms of the tentative November nuclear agreement, Iran will be allowed to export only 1 million barrels of oil per day.

 

In mid-December, Iranian oil officials indicated that they hoped to resume previous production and export levels and would hold talks with international companies to that end.

 

This announcement sparked an immediate reaction from US Congress, which has threatened oil companies with “severe financial penalties” if they resume business with Iran “prematurely” following the six-month agreement reached in Geneva.

 

There are plenty of figures in Congress—Republican and Democratic alike—who are opposed to the deal. The key “Iran hawk” in US Congress, South Carolina Republican Lindsey Graham, has described the deal as “so far away from what the end game should look like”, which should be to “stop enrichment”.

 

The opposition in this case believes any talk between Tehran and Western oil companies is premature because they are convinced that we won’t see a comprehensive resolution after the six-month period, and that sanctions will be laid on stronger than ever before.

Yet again, it would seem, Iran is another proxy pissing match between the US and Russia... and remember, nothing lasts forever...

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Mon, 01/20/2014 - 15:14 | 4348738 john39
john39's picture

nice to see good news for a change.

Mon, 01/20/2014 - 15:25 | 4348781 thunderchief
thunderchief's picture

So uncle sam runs back to its extremist terrorist bed buddies, the house of Saud. Bend over and say uncle if you want to keep that petro dollar.

What a sad state of affairs for the USA.

Mon, 01/20/2014 - 15:57 | 4348879 El Oregonian
El Oregonian's picture

Yup, and the Mongrels have stormed the walls and have overcome them. Sorry, the SHTF is about to begin... choices have consequences.

Boy, it is going to suck for the banksters when they impale their asses and set them upright in the courtyards of the town squares.

Mon, 01/20/2014 - 15:59 | 4348900 J S Bach
J S Bach's picture

Good for them!!!  I love seeing countries trading freely without having to pay tribute to the International Usurers through petro dollars or interest on debt-based currencies.

Old fashioned bartering is one way to slay the beast.

Mon, 01/20/2014 - 16:51 | 4349060 ZerOhead
ZerOhead's picture

I keep forgetting... who did Iran attack again?

Mon, 01/20/2014 - 17:40 | 4348858 ZH Snob
ZH Snob's picture

did they really think Iran would adopt and embrace the petro dollar at this stage of the game?  at a time when the Saudis are all but through with it?  the sun is setting on this defend-the-dollar aggression around the world.  everyone has had enough of it, and China (or Russia) will always provide an alternative, much to the dismay of our lost leaders.

Mon, 01/20/2014 - 15:21 | 4348739 TruthInSunshine
TruthInSunshine's picture

Oil for P-800 Oniks?

Mon, 01/20/2014 - 16:09 | 4348934 CrashisOptimistic
CrashisOptimistic's picture

Frown.

Russia is the number 1 oil producer of the world and pumps almost 11 million bpd and export most of that.  Extra supply can't help the price they get for that export.

Either the reports or bogus or hmm wait, this is just 500K barrels.  Not per day.  Just a single shipment, to pay for some stuff Russia makes.

Never mind, that's a drop in the  . . . barrel.  Not enough to move price.  The Russkies are just selling some shit they built to Iran and Iran found a way to pay for it.

Mon, 01/20/2014 - 16:23 | 4348987 TruthInSunshine
TruthInSunshine's picture

Oil is fungible on world markets.

It matters not that Russia produces its own oil. Taking barrels of oil in exchange for goods is as good as taking fiat (some would claim better) based on commodity market pricing.

Mon, 01/20/2014 - 16:53 | 4349063 Urban Redneck
Urban Redneck's picture

And it's like the Russians can't turn around and sell the oil to someone else in exchange for something more useful (to them). Petro-laundering, with a side of sovereign immunity...

Mon, 01/20/2014 - 17:31 | 4349153 CrashisOptimistic
CrashisOptimistic's picture

Both you guys are right.

It means Russia has decided to break the Iranian sanctions, and the EU will say not a damn word about it they want to stay warm.

Mon, 01/20/2014 - 18:27 | 4349391 Jack Burton
Jack Burton's picture

Mobile Suoer Sunburn Anti Ship Missiles. Not your average dum missile, this baby flys with a big brain inside, capable of making the decissions needed to evade counter measures and hit the target. This isn't some old Chinese Silkworm, those days are over, Russia is deep into the world of high tech, this isn't the USSR. The west has never, ever faced weapons like this, if they do face them, all the easy wars will be over, America will awaken to CNN running stories of 5,000 USN sailors fighting for their lives on a burning Carrier. Not since World War Two has the Navy faced this type of thing. If Russia can built the best heavy anti aircraft missile system in the world S-400 - S-500, able to hit aircraft, missiles and smart bombs, imagine how much easier to build a mobile missile to hit large warships which are Big and Slow.

Tue, 01/21/2014 - 01:52 | 4350713 matrix2012
matrix2012's picture

Forget about the China's oldies SilkWorm, instead do not discount  the existence of China’s latest DF-21D anti-ship ballistic missile (ASBM), dubbed as the "carrier killer", the biggest threat in the anti-access arena at the moment. The DF, or Dong Feng literally means 'East Wind' in Chinese.

On January 12, 2014, a photo of suspected test of the launch of DF-21D anti-ship missile was posted on the internet. Judging by the photo, the warhead of the missile is cone-shaped and there are nozzles on the missile for adjusting its direction. Perhaps the nozzles are used for terminal guidance and substantial maneuver to break through enemy defense, That is the first exposure of the test launch of the latest version of DF-21 after the first exposures of China’s DF-21A and DF-21B missiles.

According to an article by Wang Genbin, deputy commander-in-chief of Department 4 of China Aerospace Science & Industry Corp. (CASIC), on a journal publicly available, in the two decades since 1988, China spent 3 billion yuan ($494 million) in successfully developing DF-21A, 21B, 21C and 21D missiles and completed the transition from development of only nuclear missiles to that of both nuclear and conventional missiles and from fixed target to low-speed target. In addition, the accuracy has been improved from several hundred to several tens of meters.

In an interview with Asahi Shimbun, former US Pacific Commander Adm. Robert F. Willard said that China’s DF-21D has acquired initial combat capability

A US research institute believes that in 2011 and 2012, China conducted quite a few launches of DF-21D in the South China Sea and successfully hit and sank a simulated model of aircraft carrier made by transforming China’s Yuanwang 4 survey ship.

In the period between 2012 to 2013, China for the first time deployed for combat its DF-21D anti-ship missiles. One combat brigade of such missiles is located near Zhaoqing, Guangdong Province while a second brigade will be deployed in Anhui or Henan province. At present, US military believes that China’s anti-ship ballistic missile has already had combat capability.

Source: huanqiu.com “Exposure of suspected test launch of DF-21 anti-ship missile that has already been in service according to US source”

 

matrix

 

Mon, 01/20/2014 - 15:22 | 4348744 lolmao500
lolmao500's picture

Don't you worry, Turkey and Murica are working hard to piss off Russia by invading Syria...

Today's bullshit (even pushed on CNN) : Assad runs nazi-like concentration camps with at least 11 000 dead so far...

https://twitter.com/anadoluagency/status/425344147860361216/photo/1

CNN has an exclusive clear evidence of systematic torture and killing of prisoners by the Assad regime.

A #policeman, designated with taking photographs of regime dissidents has defected from #Syria with 55,000 photographs of 11,000 victims. #AA

Riiiiiiiiiight. 55 000 photographs of 11 000 people... did they all took artsy pics with different outfits??

Mon, 01/20/2014 - 15:32 | 4348808 Joe A
Joe A's picture

Well, that model worked really well in Yugoslavia. In 1999 when the Kosovo issue enflamed CNN said one day that 100,000 Albanian men went missing and presumed executed. A few days later the BBC said that 250,000 Albanian men went missing and presumed executed. Not even the Nazis of WWII had such capacity.

Rinse and repeat. If at first you don't succeed, try, try again.

Mon, 01/20/2014 - 15:37 | 4348832 TruthInSunshine
TruthInSunshine's picture

I heard some MSM 'news' channels report that they're cutting electrical cords to babies' incubators.

Mon, 01/20/2014 - 15:54 | 4348889 Joe A
Joe A's picture

I just had an deja-vu when I read your post....hmmm....where did I hear that one before...?

Mon, 01/20/2014 - 16:17 | 4348963 kridkrid
kridkrid's picture

That's one of those "red pill, blue pill" examples for me. When you don't realize until much later in life that everything is a lie (even the things that are true still exist within the context of a lie) you have to retrace your steps. I was a freshman in college for the first gulf war and had not yet begun to question everything. They had some balls on that one, but nobody called them out. Remarkable. I was going to write that they have to be a little bit better these days as people have the ability to share information more readily and call BS when BS exists... sadly... that's not the case.

Mon, 01/20/2014 - 18:08 | 4349304 Winston Churchill
Winston Churchill's picture

Human skin lampshades, and soap made from dead nuns is always a good

follow up. Damn Huns, er....Syrians.

Depressing how the sames lies still work after a hundred years.

Tue, 01/21/2014 - 02:01 | 4350723 matrix2012
matrix2012's picture

kridkrid, the phrase red/blue pills just reminds me :D

Not quite relevant for those avid readers of ZH, yet it's still a kind of fave lines to quote to the low information sheople :-)

 

"You take the blue pill, the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes."

Mon, 01/20/2014 - 17:53 | 4349238 nightshiftsucks
nightshiftsucks's picture

Oh no,those poor incubators.

Mon, 01/20/2014 - 15:32 | 4348812 john39
john39's picture

and Saddam, er, Assad's goons unplugged incubators with babies in them too...  before driving off in mobil chemical weapons trucks (oh wait, damn got rid of those too)...

Mon, 01/20/2014 - 15:36 | 4348828 y3maxx
y3maxx's picture

...Moar New Wars in 3...2...1

Mon, 01/20/2014 - 15:40 | 4348840 Al Huxley
Al Huxley's picture

I think you're getting your propaganda streams crossed, but I could be wrong, maybe they recycle their bullshit every 10 years, so it's reapplicable now.

Mon, 01/20/2014 - 16:18 | 4348864 Tinky
Tinky's picture

No, this time it was Assad's forces using chemical weapons against their own people!

Except, of course, that the U.S. government was lying again:

http://www.moonofalabama.org/2014/01/missile-experts-white-house-made-fa...

Mon, 01/20/2014 - 16:20 | 4348976 kridkrid
kridkrid's picture

The incubators and the mobile meth labs, I mean WMD labs were under Saddam, but they led to different wars. Of course, we've always been at war with eastasia.

Mon, 01/20/2014 - 16:47 | 4349050 mick_richfield
mick_richfield's picture

Disney used to do their children's movies on a 7-year cycle.

I think you would have to stretch that out by 50% or so if the target audience is children of voting age.

Or of Selective Service age.

 

Mon, 01/20/2014 - 15:40 | 4348831 lolmao500
lolmao500's picture

This ought to be fun too...

--> In the next hours, the Kurdish self-rule in northern Syria will be declared.

Interesting timing... Me thinks they have received the go ahead because Syria is going to be invaded for real this time... The Kurds can't defend themselves from Assad weapons but if Assad is deposed and Syria divided, as per the plan, then it all makes sense...

Mon, 01/20/2014 - 16:17 | 4348962 Lore
Lore's picture

Heaven help you if there's oil and gas under your feet.  You will be targeted for Liberation.

Mon, 01/20/2014 - 17:58 | 4349255 LeisureSmith
LeisureSmith's picture

I think i have to call bullshit on that one. Most likely the Turks trying to kick up some dust.

I like the Kurds, they are handing out some serious hurt to those Saudi backed, Turkish supplied, mentally unsound, Captagon crazed, goatloving jihadi cavecunts running wild in that part of the sandbox.

Good job kurds.

Mon, 01/20/2014 - 15:39 | 4348838 Skateboarder
Skateboarder's picture

Show some clips of brown people either being predators of liberty or victims of abuse, over and over again ad nauseum, and come up with false allegations to incite the want of war. The sole two functions of corporate media.

Tue, 01/21/2014 - 17:25 | 4353114 Sokhmate
Sokhmate's picture

it prolly was a scantily clad cosplay photo shoot. I'll volunteer for post processing.

Mon, 01/20/2014 - 15:16 | 4348746 PontifexMaximus
PontifexMaximus's picture

The US would be more than happy to make this deal......first come , first served

Mon, 01/20/2014 - 15:33 | 4348819 Sudden Debt
Sudden Debt's picture

unless Iran takes cheezecakes instead of gold, it's a possibilty... otherwise....

Mon, 01/20/2014 - 16:48 | 4349054 mick_richfield
mick_richfield's picture

yellowcake ?

Mon, 01/20/2014 - 15:17 | 4348748 peterUK
peterUK's picture

I like ZH. It’s an intelligent website. It proffers a reasoned competing perspective on financial markets.

But it owes its readership an apology of sorts, because by imploring them to sell and equities and buy gold and silver it has cost them a large fortune.

It daily parades its excuses, but in truth it can’t claim to be right when it’s been so, so wrong. 

The tragedy is that the website has morphed from being a contrarian opinion former to a contrarian shaker without credibility.  

I say this as a Brit who’s thankfully ignored its invocations and as a reader who laments its boneheadedness.

One day ZH will get it right. Perhaps sooner than later. But meanwhile, let’s be frank, it has  screwed its following more keenly than the muppets who follow Goldman Sachs.

Mon, 01/20/2014 - 15:23 | 4348770 Overleveraged_a...
Overleveraged_and_Impatient's picture

ZH never said TO buy or sell anything. All they do is present compelling facts and opinions. You can do as you please with it

Mon, 01/20/2014 - 15:24 | 4348777 peterUK
peterUK's picture

Absolute pish, sir. And you know it. 

Mon, 01/20/2014 - 16:03 | 4348912 shovelhead
shovelhead's picture

I should listen to somebody who lives in a country that eats canned beans on toast?

 

Tue, 01/21/2014 - 02:17 | 4350753 thestarl
thestarl's picture

and their fucked up teeth the soapdodgers

Mon, 01/20/2014 - 16:11 | 4348939 CrashisOptimistic
CrashisOptimistic's picture

There is always an X in your upper right corner.

And you do realize that when someone is suggesting billions of people will die, they only have to be right once.

Mon, 01/20/2014 - 16:30 | 4348991 Lore
Lore's picture

Peter:  There are innumerable sites where other people would be more than happy to do your thinking and make your decisions for you, and they'll even take your money.

Mon, 01/20/2014 - 16:57 | 4349075 Sashko89
Sashko89's picture

Hey Peter their is mainstream financial news for you... go invest with those guys

Mon, 01/20/2014 - 18:22 | 4349372 Disenchanted
Disenchanted's picture

Buy stawks then peterUK...I'm sure Goldman has some they'll dump, uh...unload, uh...sell to you.

In the future when the bottom drops out, come back and tell us how you made out.

Mon, 01/20/2014 - 18:34 | 4349421 Jack Burton
Jack Burton's picture

Nice try peterUK, I read ZH, they have told the truth about manipulated markets. You do know stocks are manipulated via QE? ZH gives facts, I have never been told to buy gold by the ZH moderators. In fact, fool, gold is still, in the long run, the only sensible bet. If you read ZH for short term trading information and tips, you have gone mad! Don't troll by telling lies or even attempting to put words into others mouths and demand they defend them. I've been to one rodeo, a worlds fair, a picinic and I ain't never heard such rubbish as your initial post.

Stocks soar because of the Federal Reserve funding the price run up with printed money, in what way is ZH supposed to give trading tips in a world where governments fund market rises?

Better return to reading the Daily Mail online, old chap.

Mon, 01/20/2014 - 15:25 | 4348778 Bioscale
Bioscale's picture

One question: what would YOU recommend me as a reasonable investment for my retirement in 20-30 years? I mean what if not gold? All the folks around me put their money into government bonds, bank deposits, capital insurance. Will gold to be a bad investment in 20-30 years compared to its alternatives? I believe the opposite.

Mon, 01/20/2014 - 15:25 | 4348784 Smartie37
Smartie37's picture

@PeterUK,

What is the rate of Actual inflation since 1999? and 2008?

What is the change in the S&P 500 index expressed in Real dollars since 1999?  and 2008?

Answer first, then opine.............. 

Mon, 01/20/2014 - 15:31 | 4348805 peterUK
peterUK's picture

I'm not opining about anything, Smartie. I'm merely drawing attention to the relentless bearishness of ZH and the merciless bullishness of equities. That and the fact that ZH should come clean and admit it got it wrong.  A smidgen of mea culpa wouldn't got amiss.

Mon, 01/20/2014 - 15:50 | 4348874 Tinky
Tinky's picture

I'd suggest that you engage in a careful study of the nuanced distinction between trading and investing so as to protect one's wealth. Once you've mastered that distinction, you'll be welcomed back – but not before.

Mon, 01/20/2014 - 15:56 | 4348893 superflex
superflex's picture

Answer the question about real inflation then.

You know the answer.  You're just trolling in an article which has nothing to do with equities or commodities.

Now get back to Yahoo Business and BTFATH!

 

Do NOT follow this link or you will be banned from the site!