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Could Iran Be Trading Oil With Russia For Nuclear Support?
Submitted by Joe Parson via OilPrice.com,
With the help of a few former Soviet neighbors, Iran is set to revitalize their crude oil exports after the profound effect of past sanctions.
Not only has Russia offered to provide goods and services in return for Iranian oil, Azerbaijan and Kazakhstan have proposed reinstating oil swap deals. Oil swaps in general are not new, as they are often used to optimize logistical obstacles. In Iran’s case, it is the supply of crude oil to their refineries in the north from countries closer than Iran’s own oil fields in the south. An oil-for-goods arrangement has also occurred in the past, notably with Saddam Hussein’s Iraq trading oil for food under the auspices of the United Nations.
However, the sanctions against Iran by American and European countries do not make allowances for any such humanitarian trade. Therefore, coordinated efforts by Russia, Azerbaijan, and Kazakhstan could potentially bring more Iranian oil into the global oil market. Iran has offered nearly 500,000 barrels a day to Russia to export from their southern ports in exchange for food and electricity generation expertise. An excess of more than 500,000 barrels a day from Iran, most likely directed at India and China, will notably alter regional oil demand requirements.
Sanctions Inhibiting Iran’s Energy Sector
It wasn’t until 2006 that much of the developed world joined in sanctioning Iran, and finally, in 2011 and 2012, they had a notable effect on Iran’s ability to export crude oil and other petroleum products. With limited access to international finance, oil, and insurance markets, U.S. Deputy Secretary of State William Burns said, “Iran may be losing as much as $50 billion to $60 billion overall in potential energy investments [annually].”
These sanctions come after prolonged failure of UN nuclear negotiation talks with Iran. Russia, an active member of those talks, often tries to capitalize on its role to proffer access to RosAtom into the Iranian nuclear industry. Originally under the guise of preventing the weaponization of spent Iranian fuel cells, Russia now seeks to offer their services in return for Iranian oil.
Oil Swaps and Modern Bartering
In 2010, Iran stopped more than a decade of oil swaps with Kazakhstan, Turkmenistan, and Azerbaijan. Iran, which benefited from the logistical simplicity, was ultimately making only $1 per barrel swapped, yet OPEC was counting the oil swaps against Iran’s quota. As Iran saw continued surges in oil prices, the $1 per barrel no longer made long term financial sense; talks had mentioned increasing the price to $5, but ultimately failed.
However, Iran’s now struggling crude production and export levels may benefit from these oil swap deals by providing a production incentive. Iran’s ability to keep domestic refineries supplied is key to its ability to optimize transportation cost and increase productivity to pay for Russian goods and services. Although Russia is currently stifled by American and European investment restrictions, they still have supply contracts to satisfy. Unfortunately, there are limited other near-term solutions to meet those contracts without American and European investment in greenfield activities in the Arctic or shale oil basins.
Iran, which agrees to provide up to 500,000 barrels a day for the exchange, is only purchasing what amounts to nearly 14,000 barrels a day of grain. The remainder has likely been allocated towards Russian goods and expertise for the “Electricity Generation Sector.” Accordingly, on Sept. 12, Russian experts presented their plan for the new Bushehr-2 Nuclear Power Plant (NPP). It is likely that the Iranian side intends on paying for these services with crude oil export out of their southern ports. This provides additional utility for Russia to satisfy export contracts with India and China without increasing domestic productivity.
Iran is thus also able to reallocate funding originally intended for goods and services now provided by Russia. This is likely to go towards mitigating sanctions that have caused a decline in new field developments, precipitating a decline in overall production.
In the event that Azerbaijan and Kazakhstan are able to increase their oil production capacity, oil swaps with Iran may become an increasingly common feature to cut costs to supply distant markets. Through bartering, Russia may be able to undercut threats of an American shale oil export boom by offering reduced oil prices to Northeast Asia. Geopolitically, Russia’s support to Iran will place them in a key position to mediate potential future conflicts. However, once Russia is able to supply large quantities of oil via pipeline, Iran’s influence will likely decrease and Russia may force rapprochement to garner international goodwill.
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Ben Bernanke prints trillions, and oil is limper than Fred Durst.
duh
Why the heck not? Saudi Arabia sells cheap oil to US to keep the corrupt monarchy in charge.
All's fair in Love, War, Currency and Energy. Bitchez.
If I had more currency, she's have more energy...
Yes, they could be
I thought Russia has plenty of oil already.
Maybe I'm just mental or don't know what an "oil swap" is. It sounds like voodoo.
at this point, given how warm & fuzzy our relations are with the russians, the only thing that would surprise me would be if russia WASN'T helping iran go nuclear.
i guess reset buttons are only for video game consoles.
It's probably in Russia's interests to help everybody to go nuclear, now. It's a lot harder to fuck with a country that can covert your 'peacekeeping forces' into a rapidly expanding cloud of ionized gas.
Game theory. There will pass a point where 'The West' (banksters) control enough of world that Russia can't win the phony war by allying with what's left - assuming that the whole shebang isn't just being staged for our entertainment, that is. So Russia would be wise to lightly arm every bugger that is likely to stay friendly for the immediate future.
^^^
and at least my PS3 has the "reset" button spelled right
"We have never been so close to a deal as now. But the truth is that the final phase of the talks that lie before us is probably the most difficult," Frank-Walter Steinmeier told reporters on Thursday after sitting down with Rouhani at the Iranian delegation's hotel in New York, on the sidelines of the UN General Assembly meeting.
Progress has been made in recent months towards a deal between Iran and negotiators from the five permanent members of the UN Security Council - China, Britain, France, Russia and the United States - plus Germany.
http://www.dw.de/steinmeier-says-iran-nuclear-deal-has-never-been-so-clo...
"We have never been so close to a deal as now. But the truth is that the final phase of the talks that lie before us is probably the most difficult," Frank-Walter Steinmeier told reporters on Thursday after sitting down with Rouhani at the Iranian delegation's hotel in New York, on the sidelines of the UN General Assembly meeting."
Translation: "They won't give us their gold, control of their oil, ownership of their central fiat factory, acquiesce to Greater Israel, and haven't yet agreed to borrow billion and billions to prop up the Rothschild banksters so we still don't have an agreement."
An American, not US subject.
Steinmeier, Steinmeier, that name sounds vaguely familier....I can't quite place the origin.
And then what would stop Iran from turning on Russia one day in the not too distant future?
As noted by Yours Truly several times in the past, it makes sense to Index oil prices to another Precious Real Asset: GOLD.
By having a Gold-Oil Price Index, no fiat or FX games can be played by Western powers (i.e. the US and its group of Friends, Lackeys and Hostages). After that, ALL fiat currencies will/shall be indexed to these ABSOLUTES.
Recall the E = mc2. Meaning that the only things that are absolute is Matter and Energy. Or, if you prefer... it is Precious Matter plus Precious Energy that is the only true "currency" (Money) in the Universe.
IOW: Fuck you Neo/Zio-Cons, GS and Yellen! Satanic Bitchez.
The world will resist pricing oil in gold. Some link is inevitable but there will be fiat in the middle and oil traded will impact the value of the fiat (other traded items will too).
Obalo's plan of empowering the MENA and Russia is going wonderfully
What can the West do if Russia does business with Iran? Are they going to sanction it?
What will happen if Russia doesn't do business with Iran? The West will sanction Russia again!
I was amazed when the final curtain came down that all along the protagonist, the antagonist , all maior and the bit part players had had a clearly pre-defined and precise role to play, each knowing that of the others', how and when to act. The whole drama which had played out in front of us had been written and scripted for 'our' illusion. The theatre of war was never quite so believable after that.
(i'm talking of broadway type stuff here, of course)
When coffee is $50 billion a cup ...well then we can put the comments of U.S. Deputy Secretary of State William Burns in proper perspective.
The real action here is the movement of goods not in the US dollar value of these things. Today that is all we can see but ask anyone who has lived through a period in which the government destroyed the currency and you can begin to see where real value lies.
3 eggs will usually get you an apple but the price of each of these can vary widely.
But Russia will not protect Iran in a military fashion when it is taken down. Russia did not follow through with the sell of it's missile systems to Iran or Syria. Iran can build it but cannot protect it, it will be destroyed when the invasion (in whatever flavor) occurs.
Russia also uses the sanctions by the west against Iran to get what it wants from some of it's "friends".
When Larry King interviewed Putin he asked, why do some countries want the atomic bomb? Putin responded by saying small countries want the bomb because they see what the US has done and they fear the US. They see N. Korea which has the bomb not get attacked or invaded by the US. So they want the bomb to feel secure. Putin said Russia is not afraid.
The companion to why countries want the bomb is why the US does not want them to have it.
The US sells the story to the sheep that no one can else can be allowed to have it because of fear of unprovoked aggression or other offensive actions delivered within the US borders.
The truth is that the US does not want them to have it to keep other countries restrictd in their response to invasion. Those smaller countries will not have the ability to build and launch ICBM's but they could use them to take on a NATO/US military close to it's borders.
If Syria could launch medium range limited nucs their people would not be being butchered now.
And Russia is not one to talk. Putin backed out of the deal to even sell Iran or Syria it's modern surface to air missiles. China, did not China suggest that NKorea give up it's nuc missiles? Of course, that might have just been for show by China.
"China, did not China suggest that NKorea give up it's nuc missiles? Of course, that might have just been for show by China."
China definitely wants N. Korea to get rid of it's nukes--North Korea is run by crazies and is on their border. Even though North Korea is an ally, I'm sure Chinese leaders would rather it would just disappear. It's not like much is positive happening there for China or the locals (trade, research, etc.) and it's a political and demographic time bomb.
Why the hell not? If so it is likely a good thing. Someone has to fight the zio-fascist-fucks.
This is completely unpredictable . Complication piled on complication .
See oil as equivalent of gold , then see
https://www.academia.edu/8507311/Drowning_in_Gold
In the article you reference, Mr. Andre Willers shows a very superficial understanding of gold and wealth. Most of his examples were from an era when gold was a currency but he then compares QE which merely increases the medium of exchange and does nothing to wealth.
I don't find much useful in the piece.
It's all on Alibaba.
Good Luck leashing the bear
once poked in the eye
All bets are off
Russia has been arming Iran for years. See link.
Probably some used nukes too. Wouldn't you?
The Sunburn - Iran's Awesome Nuclear Anti-ShipI saw a promo for US Navy on Thursday night NFL.
Would NOT like to be on a US Navy ship in the Persian Gulf or Black Sea or Med Sea if shooting started.
Aftermath: Day 2, the War With IranIran still "owes" the US Navy over an Airbus.
kinda like shooting fish in a bucket
Holy Tsar Bomba. I can only, only hope that greedier heads prevail over those who see the face of god in orange fireballs; and that together they conclude it is much better to sort things out without a hot war. It's the firebrand monotheists that are most dangerous and we know who they are.
Alas, the western leaders are banging the desk for hot war. Utterly fucked-up.
Additionally, the slightest pressure off this status and my OGZPY doubles; so there's that, too. I'm well past Kumbaya, gents.
Sanctions are ethical tribalism; wholesale gaming going on.
In a relatively short time, the China-Pakistan Economic Corridor
will become functional. This economic corridor borders along the eastern boundary of Iran, and will facilitate Iran's exports of oil and gas to Pakistan and to China, a project referred to as the Iran-Pakistan Pipeline... Despite a recent mighty effort by the Saudis and the US to block the Iranian portion of the project, the project is going forward on schedule.
(incidentally, this China-Pakistan Economic Corridor will greatly shorten the route from the gulf states to China, and will throw a monkey wrench in most of the US plans to gain control of the Straits of Molucca and the South China Sea oil tanker route.)
see:
http://en.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor
http://www.gulfoilandgas.com/webpro1/projects/3dreport.asp?id=100730
http://www.isgs.pk/projects/iran-pakistan-gas-pipeline-ip-3
http://timesofindia.indiatimes.com/world/pakistan/Iran-Pakistan-gas-pipe...
http://www.atimes.com/atimes/South_Asia/SOU-02-210314.html
http://tribune.com.pk/story/707307/back-from-the-brink-pakistan-iran-agr...