Best of the Week
Most Popular
1.UK House Prices BrExit Crash NOT Likely Despite London Property Market Weakness - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit Implications for UK Stock Market, Sterling GBP, House Prices and UK Politics... - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - Nadeem_Walayat
7.UK Interest Rate Cut to 0.25% Imminent and More QE Money Printing - Nadeem_Walayat
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.The Stock Market is Reading it Wrong! - Chris_Vermeulen
10.Breakouts Galore in Gold and Silver - Jordan_Roy_Byrne
Free Silver
Last 7 days
Gold Stocks Benchmark Battle - 30th July 16
Top 10 Pokemon GO Playing Tips, Tricks and Secrets! - 30th July 16
Asset Bubbles Tend to Crash with a Vengeance - 29th July 16
Retirees Are Risking Their Life Savings on Junk Bonds - 29th July 16
The Next Recession is Coming - Expect Around 0% Returns for the Next 7 Years - 29th July 16
SPX is Shaking and Rolling - 29th July 16
Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - 28th July 16
FOMC Interest Rates and Their Impact on the US Economy - 28th July 16
The State Of The Economy - 28th July 16
Elliott Wave Crash Course - 3 Ways the Elliott Wave Principle Enhances Your Trading - 28th July 16
Japan's "Helicopter Money" Play: Road to Hyperinflation or Cure Debt Deflation? - 27th July 16
Monetary Zika - The Insidious Nature of Credit Expansion - 27th July 16
Gold and Pork Bellies - 27th July 16
Silver Is Insurance Against The Worst Part Of This Depression - 27th July 16
Don’t Buy The SPX Hope Stock Market Rally! - 27th July 16
Bitcoin $650 Still in Play - 26th July 16
Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - 26th July 16
The Forex Markets Are Getting Exciting! - 26th July 16
Underpriced Silver Is the “Rip Van Winkle” Metal - 25th July 16
Declines in Multiple Market Indexes - 25th July 16
Retailers Are Doomed as Most Americans Are Too Poor to Shop - 25th July 16
Here’s One Currency That Could Go to Zero - 25th July 16
Stock Market Top is Expanding - 25th July 16
Silver Manipulation – Because They Needed the Eggs - 25th July 16
Silver Market COT Stuns: What's Going On Here? - 24th July 16
Gold Demand Remains Stable During Sector Weakness - 24th July 16
Sernova, Diabetes and Haemophilia - 24th July 16
Russia: Tensions, Turmoil, and Western Hubris - 24th July 16
Soybean Commodity Price to Soar Again - 23rd July 16
SPX Stock Market Uptrend Continues - 23rd July 16
Gold And Silver – Debt Addiction Will Carry Precious Metals Higher, Guaranteed - 23rd July 16
Pokemon Go - How to Play, First Use, Balls, Stops, Catching Pokemon's... Great Excercise! - 23rd July 16
7 Signs That the Gold Market Remains Resilient - 23rd July 16
Basic Income in The Time of Crisis - 23rd July 16
Silver Bull Faces Correction - 22nd July 16
The Serious Warning No One’s Talking About - 22nd July 16
Stock Market Insight from Greed, Volatility, and Put/Call Ratio - 22nd July 16
What Will Happen To the Stock Market When Interest Rates Rise? - 22nd July 16
How to Escape the World’s Biggest Ponzi Scheme - 22nd July 16
Addicted to Debt - We Can’t Borrow from the Future Anymore - 21st July 16
Not Everything Is Bullish for Gold - 21st July 16
Don’t Get Sucked Back Into the Stock Market - The Big Picture Hasn’t Changed - 21st July 16
Silver – Caught Inside - 21st July 16
Forex: "The Markets Are Getting Exciting!" - 20th July 16
China Economic Troubles - Is Kyle Bass Finally Getting His Revenge? - 20th July 16
Why Lithium Will See Another Price Spike This Fall - 20th July 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

Russia And Iran Put Oil-For-Goods Deals Into Motion

Commodities / Crude Oil Sep 10, 2014 - 02:14 PM GMT

By: GoldCore

Commodities

Russia-Iran Oil-for-Goods Contracts

Representatives of the Russian and Iranian governments met in Tehran yesterday for the 11th meeting of the Iran-Russian Trade Council, where details of a ground breaking oil-for-goods swap between the two heavily sanctioned countries were revealed.

With both countries now sanctioned by the West, Russia and Iran have been in extensive negotiations on how to facilitate Iranian oil exports without breaching the UN Security Council nuclear deal that was agreed between Iran, Germany and the five UN Council permanent last January.


Sanctions on Iran had reduced Iranian oil production from 2.5 million barrels per day (BPD) down to between 1 million - 1.5 million BPD. Under the UN’s nuclear deal, Iran can only now export up to 1 million BPD. Iran has the world’s 4th largest oil reserves and both Russia and Iran are large producers and exporters of oil.

On August 5, Russia and Iran signed a Memorandum of Understanding (MoU) on oil-for-goods exchanges under which Russia could take 500,000 BPD of Iranian oil exports in returns for providing goods, services and equipment to Iran. This deal was said by Russian media to have been directly negotiated previously by Russian President Vladimir Putin and Iranian President Hassan Rouhani.

Yesterday in Tehran, details of one of these oil-for-goods deals became apparent, when an oil-for-power-plants was announced as part of a wide ranging economic cooperation agreement that was signed between the two parties. The trade agreement is said to be worth up to €70 billion.

According to the Russian news agency ITAR-TASS, the power plants deal will consist of Russian energy engineering company TECHNOPROMEXPORT providing services for the construction of seven thermal power plants by 2017 in return for oil supplies to Russia. TECHNOPROMEXPORT had already negotiated their deal with Iran earlier this summer. It was only the payment terms that had not been revealed.

According to the Iranian Fars news agency, current Iran-Russia trade was worth $5.1 billion in 2013, and the new wide-ranging Russian projects will include construction and renovation of Iranian power plants and power grids, as well as other transportation and aviation projects such as possibly relocating the production and assembly of Aviastar-SP Tuplolev TU-204 passenger aircraft to Iran.

Russian energy minister Alexander Novak, who attended the talks and signed an agreement with Iranian oil minister Bijan Namdar Zanganeh, said that “Iran and Russia had intensively worked to remove obstacles such as method of payment for trade exchanges”.

ITAR-TASS said that one of the existing impediments to the supply of Iranian oil to Russia has been “problems in organising interbank settlements”.

It was also revealed yesterday that TECHNOPROMEXPORT will be involved in the construction of electric power plants in Iran along with Inter RAO. In fact, yesterday a number of MoUs were signed between the two countries in the areas of oil and gas, petrochemical, mining and other industries.

Although the 500,000 BPD of Iranian oil exports to Russia does not breach the UN limit, it will be seen by the White House as a threat to the US led sanctions. With further  sanctions of its own, Russia now appears to be beginning to move its own chess pieces. 

Last month the Russian business daily newspaper Kommersant quoted Russian policy expert Andrey Baklitsky as saying “Russia, at present, is far less disposed to heed US recommendations”. Baklitsky thought that with sanctions on its own oil industry, Russian is less worried about violating Iranian oil sanctions. 

Russia doesn’t necessarily need Iranian oil imports and these could easily be re-exported to other countries including China. Iran is China’s third largest supplier of crude oil.

On Monday at a separate press conference at the oil ministry in Tehran, Fars news agency quoted deputy oil minister Mansour Moazzemi as saying that “Russia is Iran’s strategic partner and we will cooperate with them in any area we can, including oil.” 

Moazzemi also said that “We have started a serious job with the Chinese and Russians (in the energy sector) in such a strong way that the oil minister has now been appointed as the head of Iran-Russia joint economic commission instead of the foreign minister.”

Moazzemi then elaborated “We have also started a serious job with the Chinese which will be revealed to the public in the future.” 

As the world powers square up over sanctions and energy reserves, while using oil-for-goods deals to bypass US dollar settlement for oil transactions, the geo-political ramifications for the status of the US dollar as the world’s reserve currency  look to be on increasingly shaky ground. 

A breaking of the stranglehold of the dollar on international oil transactions could usher in a number of transaction substitutes such as the Euro, the Yuan, and also the international currency of gold. 

MARKET UPDATE

Today’s AM fix was USD 1,254.25, EUR 968.46 and GBP 779.91    per ounce. Yesterday’s AM fix was USD 1,256.00, EUR 974.78 and GBP 779.79 per ounce.

Gold climbed $0.90 or 0.07% to $1,256.50 per ounce and silver rose $0.06 or 0.32% to $19.09 per ounce yesterday. 

In morning trading, gold weakened marginally to $1,253 in London, down 0.22% from yesterday’s New York close. In overnight Asian trading today, gold ended at $1,257.10 in Singapore. Yesterday gold weakened and had touched $1,247.60 before recovering. Silver fell 0.52% to $18.95, down from $19.05.

Palladium has fallen substantially, losing 2.84% to $856, while platinum weakened, but less so, falling 0.71% to $1,385.

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife