Could Iran Be Trading Oil With Russia For Nuclear Support?

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].’

This post was published at Zero Hedge on 09/26/2014.