The deal would allow Iran to circumvent western and international sanctions aimed at curtailing the country’s nuclear program.
And it would allow Russian President Vladimir Putin to play the spoiler for the centrepiece of the Obama administration’s entire foreign policy — namely, its push for a final nuclear agreement with Iran — in retaliation for the unprecedented U.S. sanctions on Russia.
Basically, it’s a geopolitical and economic perfect storm. But at the moment, it isn’t clear whether the deal is actually going through. Business Insider inquiries to the White House’s National Security Council were directed to the Departments of Treasury and State, which have yet to comment.
Mark Dubowitz, the executive director of the Washington, DC-based Foundation for Defence of Democracies and an expert on the Iran sanctions regime, told Business Insider that he was also unsure of the reports’ validity, and raised the possibility that news of the deal could be part of an attempt to deceive U.S. leaders.
“It’s weird. [Russia] announced, then withdrew announcement, and then announced again but with no details,” Dubowitz said by email. “It may be an ongoing dispute over business terms or the Iranians and Russians are toying with the Americans.”
In any case, a sanctions-busting Iranian-Russian arrangement wouldn’t be surprising. As Dubowitz notes, Iranian Supreme Leader Ayatollah Ruhollah Khamenei often speaks of a “resistance economy” — his term for fostering closer trade relations with countries that are less susceptible to Western political and economic pressure.
Russia would certainly qualify, especially during a period of increasing intransigence from Moscow and conflict with the U.S. and E.U. states. And as Dubowitz told The New York Times in January: “If you’re Putin and you think you’re going to be a target of sanctions, the most obvious leverage is in the Iranian file, where Russian cooperation is so important.”
The semi-official organs in Russia and Iran gave a few details. Fars titled the story “Vladimir Putin Soon to Sign Historic $US20bln Oil Deal with Iran to Bypass Western Sanctions” and cited statements from Russian media and Kremlin officials suggesting that the deal would allow Russia to purchase a half-million barrels of oil each day. Other Russian media reports say the deal would only allow for the exchange of 50,000 barrels a day.
Russian state media outlet ITAR-TASS reported that the countries signed a memorandum of understanding on commercial ties on August 5. The report noted that Russian state energy giant Gazprom “demonstrated its interest to the Iranian market as far back as February of 2014,” which was also the month that protestors in Kiev ousted pro-Moscow president Viktor Yanukovych.
Even if details remain sketchy, it would make sense that a deal like this — which has been discussed for by Moscow and Tehran for months — is in the offing.
Hunter Walker contributed to this report.
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