January 28, 2023

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From Trade to Swapping: How Russia and Iran Boost Cooperation in Face of Sanctions

Russia and Iran continued to bolster bilateral economic collaboration in the face of western sanctions last year. Russian State Duma Speaker Vyacheslav Volodin said that in 2022, trade turnover between Moscow and Tehran increased by 15% to a whopping $4.6 billion on Monday.How is the Russian-Iranian economic partnership developing and what spheres does it cover? Sputnik answers these and other questions.New Level of RelationsSpeaking at a session of the Inter-Parliamentary Commission on Cooperation between the Russian State Duma and the Iranian Parliament in Tehran, Volodin stressed that the two sides successfully develop relations in a whole array of areas.The State Duma speaker pointed to both sides’ final efforts to hammer out “a new basic interstate agreement and a number of specific deals”, which stipulate partnership in such areas as trade, transport, energy, agriculture, logistics, as well as investment and customs regulation.He added that Russia sees great potential “in the implementation of joint large-scale infrastructure projects, and the expansion of cooperation between the Eurasian Economic Union and Iran.””We are talking about the planned conclusion of a platform agreement on a free trade zone instead of a temporary agreement. This is especially relevant in the context of our countries’ implementation of the project to create the North-South International Transport Corridor (NSTC),” Volodin emphasized. The 7,200-km corridor aims to attract the transit of cargo flows from India, Iran, and the Persian Gulf nations through Russian territory to Europe.Boosting Energy CooperationLast year saw an intensification of energy contacts between Russia and Iran, which is based on common interests in the Caspian region and resolve to counter the West’s policy of sanctions.At the beginning of 2022, Russia opened a loan for $1.4 billion for the construction of the Sirik thermal power plant in Iran. In July 2022, the Russian energy giant Gazprom and the Iranian National Oil Corporation signed a memorandum of understanding.The projects are estimated to be worth about $40 billion and they include the development of the Kish and North Pars gas fields, as well as Russian participation in the exploitation of the South Pars gas field. Under the projects, Russia is expected to invest several tens of billions of dollars in the development of the deposits.Separately, Gazprom and the Iranian National Oil Corporation discussed the development of six oil fields and the construction of export gas pipelines.Swap BusinessIranian officials were quoted by media outlets as saying last year that Tehran plans to acquite around 6-9 million cubic meters per day of Russian gas in swap deliveries.Moscow, in turn, is reportedly interested in the scheme, which envisages Russian hydrocarbon resources being supplied to Iran through Azerbaijan, and the relevant volume then going to the markets of the Asia-Pacific region.According to him, the very beginning of cooperation between Iran and Gazprom is fundamentally important, something that stabilizes Russia’s economic position and opens up more opportunities for Moscow in the Asian market by means of supplies via Iran.Trade Relationship Trade between the two countries grew by 81% in 2021, and increased another 30% over the first five months of 2022. More than 80% of trade consists of agricultural goods, with Russia exporting grains and oil seeds and importing Iran’s GMO-free fruits and vegetables, as well as dried fruits and nuts, among other natural and high-quality goods.In addition to trade, the two also increased political, geostrategic and military-technical cooperation in recent years, with sanctions forcing both sides to search for alternatives to western-dominated institutions and systems.Russia and Iran are working to de-dollarize trade, seek to implement a SWIFT-style system for bank transfers and are negotiating the means to ensure interoperability of one another’s payment systems. They signed a $40 billion energy cooperation agreement in July, and agreed to expand cooperation in automotive manufacturing in August.Russian Lawmaker: No Chance for US to Hamper Moscow-Tehran CooperationDuring the Monday speech, Russian State Duma Speaker Volodin underscored that Russia and Iran are successfully resisting the international expansion of the US and NATO bloc, which is “confirmed by the unprecedented sanctions pressure” on the two countries.He added that Washington and its allies are seeking to hamper the economic development of Russia and Iran, “interfere in internal affairs, [and] spread misinformation.”The Russian lawmaker also underlined that the development of dialogue between Russia and Iran is of importance to ensuring international security.Moscow was hit by several rounds of unprecedented western sanctions shortly after it launched its special military operation to demilitarize and de-Nazify Ukraine on February 24, 2022. As for Iran, then-US President Donald Trump reinstated a set of harsh economic sanctions against the Islamic Republic in May 2018 after he announced Washington’s unilateral withdrawal from the 2015 Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA).Original News : https://sputniknews.com/20230124/from-trade-to-swapping-how-russia-and-iran-boost-cooperation-in-face-of-sanctions-1106655138.html

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