Putin-Rouhani cut deal to ensure Iran evades US sanctions, Israel said to warn

Agreement sealed in Tehran last month provides for Iran to export crude oil to Russia, where it will be refined and sold worldwide, Foreign Ministry document reportedly specifies

By TOI staff and Agencies 14 October 2018, 9:09 pm 3

Russia and Iran have agreed on a mechanism to spare Iran the impact of what are intended by the US to be crippling sanctions on its oil industry from next month, an Israeli Foreign Ministry document reportedly warns.

The mechanism provides for Iran to export crude oil to Russia across the Caspian Sea. The oil will then be refined at Russian refineries, and from there it will be exported worldwide, the “secret” Israeli document states, according to a report on Hadashot TV news on Sunday.

In return, Moscow will provide Iran with unspecified trade and service benefits.

The goal of the mechanism, the reported Israeli document makes clear, is to enable Iran to bypass the US sanctions on its oil industry that are set to come into force on November 4.

The US administration, which has withdrawn from the 2015 P5+1 world powers nuclear deal with Iran, is hoping that escalated sanctions will cripple the Iranian economy and force Tehran to come back to the negotiating table, where US President Donald Trump would aim to reach a new deal that would more stringently deny Iran any means of attaining nuclear weapons.

The Russian-Iranian deal was reportedly reached last month in Tehran, where Russian President Vladimir Putin, Iranian President Hassan Rouhani, and Turkish President Recep Tayyip Erdogan held summit talks.

A handout picture taken and released on September 7, 2018, by the Turkish Presidential Press service shows Turkish President Recep Tayyip Erdogan (R) , Iranian President Hassan Rouhani (C) and Russian President Vladimir Putin (L) joining hands during a trilateral summit in Tehran. (AFP/Turkish Presidency Press Office)

The Israeli document also reportedly warns that European states, which remain supportive of the 2015 deal, are ready to tacitly agree to let Iran continue to sell oil to various states in Asia.

The general aim of the Russian-Iranian mechanism, and of the European tacit agreement to other Iranian oil exports, is “to avert the collapse of the Iranian economy” when the US sanctions take effect, and thus “to prevent Iran from withdrawing” from the 2015 nuclear deal, according to the TV report. Maintaining the accord, the report said, is deemed by Moscow and the EU to be in their interest.

The Israeli document reportedly warns that the Putin-Rouhani agreement is “a very significant” one — a means “to breach the US sanctions wall” that will start with oil, but could also have further implications, the TV report said.

The report did not say whether the conclusions in the document have been shared by Israel with the US — whose leaderships are allied in their bitter opposition to the 2015 deal, and utterly mistrust Iran’s insistence that it is not seeking nuclear weapons.

Furthermore, the TV report noted, the mechanism underlines the alliance of interests between Moscow and Tehran, and is therefore of relevance, as Israel seeks to prevent Iran deepening its military presence in Syria. That Israeli effort has seen relentless Israeli airstrikes on Iranian and Iran-linked targets in Syria; last month, Syrian anti-aircraft missiles accidentally downed a Russian military spy plane in the course of an Israeli airstrike, plunging Israeli-Russian ties into crisis.

Rouhani has insisted several times in recent weeks that Iran will continue exporting crude oil despite the US efforts to stop it through sanctions. “We will continue by all means to both produce and export” oil, Rouhani said in remarks broadcast on state TV on September 5, for instance, two days before the summit with Putin and Erdogan. “Oil is in the frontline of confrontation and resistance.”

Three weeks ago, Rouhani ridiculed the Trump administration’s sanctions efforts, calling the threat to prevent Iranian oil exports an “empty promise” that would not work. “The United States is not capable of bringing our oil exports to zero,” he declared.

The US wants to reduce Iran’s oil exports effectively to zero with the renewed sanctions from November 4, after pulling out of the nuclear deal between Iran and world powers in May.

Russia, however, has vowed to try to salvage the 2015 deal, and to protect its economic relations with Tehran.

It has been unclear, however, how much other countries will cut back on Iranian oil imports — despite the threat of their trading with Iran impacting their trading relationships with the US. Britain, France, Germany, Russia, and China, which also signed the nuclear deal, opposed the Trump administration’s decision to withdraw from it. European countries are trying to salvage the landmark accord.

Iran said late last month that it expected the European Union to establish a legal framework by November 4 to bypass the American sanctions and to allow the continuation of trade between Tehran and EU member states.

The European Union, for its part, said its members would set up a payment system to allow oil companies and businesses to continue trading with Iran.

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