Russia and Iran have agreed to sign a free trade agreement with the Eurasian Economic Union, Russian Deputy Prime Minister Alexander Novak said on Tuesday.
Russia and Iran are also eyeing opportunities for joint projects, including in shipbuilding.
"We have also agreed to remove all barriers that exist today on the way of developing bilateral trade. And we are talking about reducing barriers at the borders with third countries. We have agreed to conclude an agreement on a free trade zone between Iran and the Eurasian Economic Union in the near future," Novak said.
The news follows reports that Iran and Russia would continue to work out the details of their oil and gas supply swap, which is expected to be signed by the end of this year. The swap deal could involve 5 million tonnes of oil and 10 billion cubic meters of gas per year-at least in the first stage of the agreement. But Novak also said that the deliveries from Russia to Iran had already begun, and that they would now look to expanding the types of products covered by the agreement.
The trade turnover between the two countries has already increased this year, by 36.4%, reaching $3.3 billion, Novak said, and soon reaching $4 billion.
A deal with Iran regarding oil and gas shipments and shipbuilding projects would give Russia more latitude when it comes to shipping its sanctioned goods that would otherwise be subject to an outright ban or price caps. Russia is hoping to find more outlets for its oil and gas as the measures against it go into effect.
And if there is a subject that Iran knows best, it's how to evade sanctions.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More