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Russia Signs Fuel Deal With Taliban

  • Russia has joined the short list of capitals willing to trade with the Taliban.
  • Moscow inkedc a preliminary agreement with the Taliban to provide key fuels to Afghanistan, though what it is set to receive in return is not yet clear.
  • There is some speculation that Russia will receive agricultural goods and potentially future access to Afghanistan’s vast natural-resource wealth.

The Taliban, struggling to navigate Afghanistan through an economic and humanitarian crisis as its rule over the country remains unrecognized by the world, has found willing partners in two countries whose trade is severely restricted by international sanctions -- Russia and Iran. Moscow joined Tehran on the short list of capitals willing to deal with the Taliban under a preliminary agreement signed last week.

Afghanistan will get 1 million tons of gasoline, 1 million tons of diesel fuel, 500,000 tons of liquefied petroleum gas, and 2 million tons of wheat a year, Taliban Commerce and Industry Minister Nooruddin Azizi announced last week.

With the deal, "Russia joins that small number of countries which are willing to do business with Taliban, in terms of export and import," said Narendra Taneja, a prominent economist who chairs the Indian-based Independent Energy Institute.

What Russia will get in return from its cash-strapped partner is much less clear, but it appears that agricultural goods and the prospect of future access to Afghanistan's natural-resource wealth could be on the table.

The Taliban, which like Russia is essentially cut off from the global banking system, has said that it will pay for the commodities in Russian rubles. But Taneja suggests that is unlikely, considering Afghanistan's difficulties in obtaining the Russian currency through trade. "It seems to be more like a very informal kind of deal, a barter kind of deal, where Russia will supply oil and gas and [Afghanistan] will supply whatever they can in return," Taneja told RFE/RL from New Delhi.

Russia, like the rest of the international community, does not recognize the Taliban government and officially considers the hard-line Islamist group to be a terrorist organization. But Moscow on multiple occasions hosted Taliban officials amid peace talk efforts prior to the group's forcible takeover of Kabul in August 2021.

Since then, Moscow has maintained an embassy in Kabul and a special representative to Afghanistan. President Vladimir Putin has said that Russia would take steps toward removing the Taliban from its terrorism list and instructed the country's media to stop identifying the group as such, as required by Russian law.

Just ahead of the St. Petersburg International Economic Forum in June, which was attended by a Taliban delegation including Azizi, Putin allocated grain exports to the drought-ravaged country "if necessary."

The new deal comes after weeks of discussions in Moscow that transpired after a visit last month by Azizi. Moscow's special representative for Afghanistan, Zamir Kabulov, confirmed to the Russian state news agency TASS that a "preliminary" agreement had been worked out and Azizi has said that a longer-term deal will be forthcoming if both sides are happy with the arrangement.

Azizi said that Afghanistan would be receiving the commodities at a discount, and the fuel supplies will reportedly be delivered by road via Central Asia.

The Taliban commerce and industry minister also said that Afghanistan had received gas and oil from Turkmenistan and Iran. In late August 2021, Tehran lifted barriers to the export of fuel to Afghanistan that had been introduced earlier this month out of safety concerns amid unrest in the country.

Iran reportedly exported about 400,000 tons of fuel to Afghanistan from May 2020 to May 2021, and prior to the Taliban takeover Turkmenistan was the leading supplier of gasoline to Afghanistan.

"A country...shouldn't be dependent on just one country, we should have alternative ways," Azizi told Reuters last week.

The deal with Russia is seen as one of the Taliban's largest trade deals and has raised questions about what the militant group can offer.

To date, the export of and custom duties from coal have been a key source of revenue for the Taliban. Much of the coal has been trucked to neighboring Pakistan.

Related: The LME Is Carefully Considering A Potential Ban On Russian Metals

Aside from coal and agricultural goods such as fruits, nuts, and medicinal herbs, Afghanistan's untapped resources appear to be a potential trade chip.

The poverty-stricken country is believed to hold a wealth of mineral resources, including copper, iron ore, gold, lithium, and cobalt, as well as a host of rare-earth elements. U.S. government agencies have placed the value at more than $900 billion, while the former Afghan government placed the number at $3 trillion.

Afghanistan's potential has attracted keen interest from China, India, Russia, and other countries, and has led the Taliban to pursue the resumption of China's Aynak Copper Mine project while also cautiously negotiating over the mining of lithium and cobalt, two key components to the batteries that are fueling the world's green-energy drive.

Afghanistan also has untapped reserves of oil and natural gas, according to Taneja, but has not been able to exploit the resources commercially. "I think the significance of the deal between the Taliban and Russia is that this is the beginning of something, and this something may grow into bigger things, such as mining of rare minerals in Afghanistan, or maybe mining of natural gas," Taneja said.

While he says that Afghanistan might want to use the opportunity to promote the development of a pipeline, it is too early to say whether that could become a reality.

The completion of the TAPI pipeline, a major project that was intended to transport natural gas from Turkmenistan to Pakistan and India via Afghanistan, has been stalled for years, although the Turkmen leg was completed in 2019.

In November 2021, Turkmen officials engaged in discussions with the Taliban aimed at completing the Afghan section of the pipeline, which began in 2018 and was intended to provide Afghanistan with 5 billion cubic meters of gas annually, more than enough to cover its annual use of 200 million cubic meters.

Russia's invasion of Ukraine in February led many Western countries to impose sanctions on Russia, including on its petroleum and gas exports.

The deal with Afghanistan, however, would effectively evade such punitive measures.

"Since the sanctions against Russia's oil and gas, Russia is looking for new markets, looking for new countries where they can sell their oil," Taneja said. "So, Afghanistan may not be a big buyer -- it is a very small buyer of oil and gas -- but nevertheless, it is another country which seems to be interested in Russian oil and gas. And as you know, the Taliban government is not recognized by any country, practically. So therefore, they escape the sanctions."

Continued fuel deliveries by Russia could encounter other obstacles, however, with Taneja listing the need to find companies willing to insure cargos, the establishment of reliable payment and delivery mechanisms, and the risk of attracting sanctions in the future.

Moscow's dealings with the Taliban have led to criticism, and the new agreement to export oil and gas is no exception, as evidenced by the number of social-media posts noting the Taliban's official status as a terrorist organization in Russia.

But with Afghanistan suffering from a massive humanitarian crisis brought on by drought, floods, and war -- leading to its recent designation by the United Nations as a "hunger hot spot" -- Russia's delivery of wheat is being viewed as a positive development.

"Keeping aside politics, what's happening over Ukraine and between Russia and the West -- I think it's important for us as humans, to make sure that not a single person in Afghanistan starves," Taneja said. "The people are not Taliban, the rulers are Taliban. And the people are starving. So, they should be helped by every country."

By RFE/RL

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Leave a comment
  • Hugh Williams on October 24 2022 said:
    Many countries want to damage the Taliban by punishing the Afghan people. The US and UK especially use this kind of system with has been used against Cuba for 60 years.

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