Iran to sign $4bn oilfields deal with Russia in bid to bolster ties

Iranian Oil Minister Mohsen Paknejad has announced that Iran will cooperate with Russian companies in a $4 billion energy agreement as they work to bolster ties while attempting to withstand Western economic sanctions.

Paknejad stated earlier on Friday on state television that the agreement aims to work with Russian companies to develop seven Iranian oilfields.

Tehran and Moscow have forged closer ties since the start of the Ukrainian military conflict, signing a strategic partnership treaty in January, ranging from military cooperation to energy, banking, and agriculture.

The pair’s effort to break down barriers in all areas of cooperation is reflected in Friday’s agreement.

Iran’s efforts to resume nuclear negotiations with the United States come as a result of consultations with its allies in Moscow and Beijing earlier this week.

OPEC

Putin’s top envoy for OPEC relations, Alexander Novak, met with Paknejad on Thursday in a meeting with the Russian deputy prime minister.

The group, which includes OPEC and its allies led by Russia, suggested that the group increase oil output for the second month in a row at the time of the meeting.

The proposed increase highlights a member dispute over whether to comply with production quotas.

It comes in response to US President Donald Trump’s calls for OPEC to lower oil prices and his return to a “maximum pressure” policy on Iran, whose oil exports Washington wants to reduce to zero.

Additionally, the two nations announced on Friday that Moscow may offer Tehran 1.8 billion cubic meters (bcm) of natural gas this year at an undetermined price.

Paknejad claimed the agreement was still pending, but that Gazprom, a Russian company, was in charge of implementation, was working with the countries to reach an agreement as soon as possible.

Qatar and Turkmenistan have long been interested in establishing a similar hub in Iran.

long history

Russia has long cooperated with Iran in the fields of energy production and supply, and it supported Iran’s construction of its first nuclear reactor in Bushehr, which is located in Iran’s southern region.

Russian President Vladimir Putin and his Iranian counterpart Masoud Pezeshkian met in the Kremlin in January to discuss the potential supply of up to 55 billion cubic meters (bcm) of natural gas to Iran, starting with smaller volumes of up to 2 bcm.

A 55 bcm increase in flow would be comparable to the Nord Stream 1 undersea pipelines to Europe, which lost all of their gas in the Ukraine war in 2022 after being blown up by explosions in 2022.