Russia And Iran Sign Oil-For-Goods Barter Deal; Escape Petrodollar

Tyler Durden's picture

Iran signed an agreement with Russia under which it has broken free from the petrodollar, and will "sell", or rather barter crude oil to Russia in exchange for products. The announcement was made by Iran’s Oil Minister Bijan Zanganeh, as reported by Russia’s RIA and TASS news agencies.

"The deal has been concluded. We are just waiting for the implementation from the Russian side. We have no difficulties; we signed the contract, everything is coordinated between the parties. We are waiting for Russian oil companies to send tankers,” he said, as quoted by Russian news agencies. While sanctions against Iran have been lifted, restrictions on trade in US dollars for the country's banks remain, making it difficult to sell oil on the open market.

As reported here just over three years ago, the $20 billion agreement was initially signed in April 2014 when Iran was under Western sanctions over its nuclear program. Russian traders were to participate in the selling of Iranian oil. In exchange, Iran wanted essential goods and technology from Russia.

This is what Reuters reported in April 2014 when the deal was first announced:

Iran and Russia have made progress towards an oil-for-goods deal sources said would be worth up to $20 billion, which would enable Tehran to boost vital energy exports in defiance of Western sanctions, people familiar with the negotiations told Reuters.

 

In January Reuters reported Moscow and Tehran were discussing a barter deal that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.

 

The White House has said such a deal would raise "serious concerns" and would be inconsistent with the nuclear talks between world powers and Iran.

Little did the US know back in 2014 that less than three years later, Russia would also be running the US, courtesy of wholesale manipulation of tens of millions of Americans, whom it hacked and convinced to vote for Trump.

Sarcasm aside, when the sanctions against Tehran were lifted in 2016, Russian Energy Minister Alexander Novak said the deal was no longer necessary. However, Novak said in March 2017 that the plan was back on the table with Russia buying 100,000 barrels per day from Iran and selling the country $45 billion worth of goods, Russia Today reported.

Russia and Iran discussed energy, electricity, nuclear energy, gas and oil, as well as cooperation in the field of railways, industry, and agriculture.

Novak had announced in February that Russia’s state trading enterprise Promsirieimport has been authorized by the government to carry out the purchase of Iran’s oil through the oil-for-goods program under study by both countries. Meanwhile, Zanganeh had been quoted by the media as saying that Iran would be paid in cash for half of the oil that would be sold to Russia.  The due payments for the remaining half would be made in goods and services, the Iranian minister had said. 

A February report by the International Monetary Fund said that while Iran has been reconnected to SWIFT, significant challenges prevent Iranian banks fully-reconnecting to global banks still exist mostly due to remaining US sanctions.

“US primary sanctions apply to US financial institutions and companies, including their non-US branches (but not their subsidiaries). Moreover, with very limited exceptions, businesses and individuals related to the US continue to be generally prohibited from dealing with Iran, including with the government,” the IMF said.

“US dollar clearing restrictions have not been lifted and pose a significant challenge for non-US banks who may do business with Iran, but may not be paid in US dollars,” it added.

And since necessity is the mother of invention, what better way to bypass the world's reserve currency than to go back to the way commerce was conducted before currencies were even created: through barter.

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Herdee's picture

It's another development in the Silk Road.

Truther's picture

 

----->Iran is smart

----->The US will get revenge

 

knukles's picture

Let's not get all worked up over free blowjobs yet, folks, there's sumptin' wrong here.

Russia, China, and everybody else but the little old USofA signed onto a new international bank transfer system to obviate SWIFT, meaning that they can trade between the two without either dollars or barter.

OK, so the stone age barbarians who lost Vienna in 1683 have oil which Russia doesn't need in exchange for goods.  (Glow in the dark fun shit, kiddies)

Al Gophilia's picture

Settlement on exchange! What a novel idea. Will it work though?

InjectTheVenom's picture

the future :

>>>>   crypto

>>>>    petrodollar

Mycroft Holmes IV's picture

Queue false flag sucking us into war with Iran.

Same as it ever was.

auricle's picture

Trading oil for 'products' that like to go BOOM. 

apadictionary's picture

trump: fk nk. now iran is priority #1. cia: go ahead with the plan.

peopledontwanttruth's picture

I know I'll get down voted for this but it's a bigger picture than just the discussion here.

From a geographical position of Israel

Daniel 11:44-12:1
Holman Christian Standard Bible (HCSB)

44 But reports from the east and the north will terrify him, and he will go out with great fury to annihilate and completely destroy many. 45 He will pitch his royal tents between the sea and the beautiful holy mountain, but he will meet his end with no one to help him.

12 At that time
Michael the great prince
who stands watch over your people will rise up.
There will be a time of distress
such as never has occurred
since nations came into being until that time.
But at that time all your people
who are found written in the book will escape.

Revelation 16:12
Holman Christian Standard Bible (HCSB)

12 The sixth poured out his bowl on the great river Euphrates, and its water was dried up to prepare the way for the kings from the east.

Only Persia in spirit world is spoken of having (Kings) in the multiple and only Persia is geographically spoken from the east, all others world powers in the Bible with regard to biblical prophecy said to be from other directions.

Daniel 10:13
Holman Christian Standard Bible (HCSB)

13 But the prince of the kingdom of Persia opposed me for 21 days. Then Michael, one of the chief princes, came to help me after I had been left there with the kings of Persia.

logicalman's picture

The future:

>>>>>> Madness

>>>>>> Nirvana

 

karenm's picture

Well yeah, it's a narrative, like all media stories. The public line is always a lie to control and guide public opinion. Of course it doesn't make sense if one knows what's REALLY happening and where the lines are drawn.

 

The message this story is sending to the public is the USD is being undermined. That's what the puppetmasters want people to figure out.

 

As for reality? HA!! All leaders are Globalists who drink Cognac and smoke cigars together laughing at the dumbed down masses who think they actually give a shit about the idealogies the average person holds, like conservatism, liberalism, etc.

 

All they care about is money, power, and getting to their one world government. Period.

Blankone's picture

If anything I take this story to show the alternative system to Swift if ineffective. They have been reduced to the basic from of barter. Very fine for the local market or between the local farmer and another local company but not so great for international trade. It is not so efficient.

And how about all the businesses in Russia and Iran? Are they still stuck using the dollar to conduct business? Not all businesses in Iran are producing oil to trade to a Russian business and not all Russian businesses want oil for their products.

The inability to trade using their currencies is very backwards and disappointing.

philipat's picture

Part of the problem is that Russia and China have been working separately on SWIFT alternatives, which they should combine.

In the meantime, why will Iran not accept payment in RUB? Russia is now invoicing Europe for natural gas in RUB which will put firm support under it as European importers have to sell EUR to buy RUB to pay for gas imports. This makesit much more difficult for Washington to manipulate the RUB again (as last year). IMHO Russia should price all its energy exports in RUB, particularly after China opens the new Oil Futures exchange denominated in CNH, now rumored (again) to be imminenet. It also seems only a matter of time before China forces Saudi Arabia (even with so-called arms deals) to accept payment for oil in CNH from its largest customer, China.

All these things ARE going to happen, they can't be stopped so its just a question of WHEN. And when they do, say bye bye to the Petrodollar.

Cacete de Ouro's picture

Cut to the chase... Oil for Gold swaps would be in both countries' interests

jaxville's picture

  The oil glut will end eventually and Russia will be holding a very strong hand then.  Long term planning is way over the heads of most Western regimes.

BarkingCat's picture

We know that Russia can plan at least 5 years at a time. :0

Luckhasit's picture

Yea, it's "goods" and not "food or consumables".  We know the deal.

Russia will sell Irans oil to bypass that dreaded "black list" they are on, Iran gets the money back in currency and "goods" which can be military hardware or whatever the hell they want.

In return, Russia gets to sell shit to the Iranians and of course another notch in the Great Game.

jme540's picture

Lada now belongs partialy to Renault which provides technologies etc. so it not that bad nowadays. 

But Hyunday and Kia are crap, I agree with that.

East Indian's picture

Those who lost Vienna in 1683 were Sunni Turks; this is Shia Iranians. 

BarkingCat's picture

What do you mean lost Vienna?

They never had Vienna.

They failed to conquer Vienna.

Anteater's picture

100,000 barrels a day is $5M a day. It will take Iran 30 years to pay for those Russian goods and services at that rate.

This is just Iran using Russia to money launder its sanctioned oil through Trump Casinos.

Uranium Mountain's picture

War is coming.  Just ask Saddam Hussein how that turned out. 

karenm's picture

Oil=USD

 

Their fates are tied together. If the casino were to allow the truth to be known, both would be far lower in value than they are. Nonetheless, both will die in 2017.

Cruel Aid's picture

Let's see if the usd makes a correlative move.

BarkingCat's picture

Nor did he have a population whose average IQ is higher than that of the US.

Hell, average IQ in the US was higher back in the Sadam days then today.

One of the consequences of flooding ones country with people from low IQ regions.

US also didn't have the SJW infection going full blast back then.

Dr. Dooms-a-lot's picture

I see some Arab spring in their future.

dogismycopilot's picture

Persians are not Arabs. 

VOA will call it something like, "Persian Perenials" or "Persian Pride" or "Gay Persian Pride" (the latter being as DOS continues its LBGTQ Jihad around the world!)

xrxs's picture

Seems like an opportune time for Assad to do something illogical.

DipshitMiddleClassWhiteKid's picture

WW3 soon.

 

ZOG cant have the petrodollar undermined

NoPension's picture

I thought a Russia was a leading oil producer.

xrxs's picture

THE leading oil producer.

Global Hunter's picture

I think Russia has more refining capacity and Iran's isn't very good.  So Russia can get oil at a discount, refine it and sell it and keep their reserves in the ground and Iran gets a trading partner (and hurts petrodollar).  Russia gets a new emerging market for their goods.  Thinking out loud.

shovelhead's picture

Yup.

They don't lose money, they boost exports and sell refined gas at a premium.

Not to mention the thumb in the eye to the US deep state that keeps screwing with them. Some things are worth more than money.

Winston Churchill's picture

It always was, and still is, Iran's achilles heel.Limited refining capacity.

Oddly for a country sitting on so much energy, they could never produce enough energy for refining.

Thats why, even under the Shah, they've wanted nuke power plants.

On its face its illogical, but its the truth.

Dragon HAwk's picture

So they can make Missiles, but not refineries, priorities priorities

peippe's picture

Fun fact: Russia has the most uranium & titanium deposits on planet Earth.

They (Russia) can just swap ore for oil & dump it on the world market.

Guess what you need for good bombs? Lots of Uranium & titanium. 

CoonT's picture

titanium is everywhere. The trick is in the refining process

logicalman's picture

Lithium is HUGE if you want thermonukes.

OregonGrown's picture
Oil-For-Goods = Oil-For-Gold
chubbar's picture

Well, if the US thought that Iran wasn't going to work around trade and banking restrictions, they were profoundly naive. Russia turns around and sells the oil for Yuan to China and marches down to the SGE and buys gold, everyone is happy. The US  is essentially forcing Russia, China and Iran to figure out ways to avoid using the dollar when it does these sanctions. You'd think this is either by design or the US has it's head up it's ass again, I'm guess the latter in this case.

sinbad2's picture

Before the US eased up on the sanctions, Iran was trading with gold, I think fear that it might start a trend was one of the reasons the US eased up on the sanctions.

Soul Glow's picture

Doesn't Russia have enough oil?

max_leering's picture

plenty... but who cares how much... a few thousand barrels, send iran an S400 aa missile... sounds damn smart to me... another few thousand barrels, the Ruskie techs come and service said S400... what a concept!!... uncle sugar gets outplayed

just the tip's picture

it could be called leverage.  it is after all, barter.  so market prices of a barrel of crude can be easily obfuscated.

if i were gonna guess, i'd say that the production costs of iranian crude are less per barrel than the rooskie stuff.  so.  if the iranians want to sell their crude for a lower price than rooskie production costs, and get stuff in return, it's a win win.  and the rooskies turn around and sell the iranian stuff for a smaller profit.

DEMIZEN's picture

the iranians haul their oil to china while russians can deliver their far east reserves via pipe to local far east markets. why haul the unsold-untapped syberian oil back to central russia if they can substitute with iranian reserves and trade it for military gear?  makes sense to me. pure EROEI. i am sure china is in agreement.