Iran’s barter trade bypassing US sanctions gains momentum

2022-04-20 19:52:32
Iran’s barter trade bypassing US sanctions gains momentum

Iran’s campaign to bypass US-led sanctions is moving into higher gear as more countries, especially in Asia and Latin America, soften up to barter trade with the Islamic Republic.

Multiple sanctions by the US and Europeans choking Iran's access to global banking channels with the aim of damaging its economy and disrupting the country's key trade activities have prompted Tehran to explore new modes of trade and barter has emerged as the most viable conduit.

Last week, CNN speculated that Russia may have to turn to a trusted ally with more than four decades of experience with Western embargoes, meaning Iran, as Moscow faces unprecedented sanctions on virtually all sectors of its economy.

Until the Ukraine war, Iran was the most sanctioned country in the world, according to Castellum.Ai, which tracks sanctions. Russia now holds that record and the two countries are in what analysts call "a marriage of convenience" that is likely to grow stronger as the war in Ukraine escalates, the American broadcaster said.

"Common interests in helping the other evade sanctions are important to these dynamics in Russia-Iran relations," it cited Giorgio Cafiero, CEO of Persian Gulf State Analytics in Washington DC, as saying.

Last month, Russian Transport Minister Vitaly Savelyev said his country was "studying the case of Iran" to help it deal with sanctions on maintenance and spare parts. Iran still operates some planes purchased before the 1979 Islamic Revolution that toppled a West-friendly regime in the country.

"This bilateral relationship will likely grow stronger as the war in Ukraine rages on, especially if the Vienna talks fail to revive the JCPOA," Cafiero added, referring to the 2015 deal the former Trump regime abandoned.

Cariero noted that the West’s hostility will bring Russia closer to Iran and make Tehran useful to Moscow. According to CNN, after decades of Western economic constraints, the Islamic Republic has become a master of circumventing the most draconian sanctions ever imposed on a country. Today, Russia is living a similar experience as the West clamps down on Moscow in an effort to cripple its economy.

“Can Russia follow Iran's lead to circumvent Western sanctions? Some analysts say it already is,” the broadcaster said.

During a two-day visit to Moscow in January, Iranian President Ebrahim Raeisi shared that the two countries had discussed monetary and banking issues and agreed to remove trade barriers to increase trade to $10 billion a year.

Commercial exchanges between the two countries hit a new record in 2021, exceeding the equivalent of $4 billion. Russian exports to Iran accounted for over $3 billion, while Russian imports from Iran reached $967.3 million, according to media reports.

"The two countries can take steps to break the dominance of the dollar over monetary and banking relations and trade with the national currency," Raeisi said during his visit.

Nearly 80 percent of trade between Russia and Iran currently consists of agricultural products. Russia exports grains and oilseeds to Iran and imports Iranian fruits and vegetables, dried fruits and nuts.

Vice-Governor of Iranian Central Bank Mohsen Karimi said earlier this month that Iran is willing to trade with Russia in national currencies and agreements on this arrangement already exist.

Last November, Iran and Pakistan clinched a barter trade agreement during the meeting of their Joint Economic Committee in Tehran.

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