President Donald Trump’s next round of economic sanctions on Iran will go into effect on Sunday, November 4, and Forbes has tweeted this week that “by weakening Iran, the sanctions cede Russia the power to balance crude oil markets.” Tass on Thursday provided an excellent example of this will happen:
Back in March, Russian oil producer Zarubezhneft entered into contracts to develop two fields in Iran. Now th same company sold those contracts to the Russian federal state unitary enterprise Promsyryeimport, a.k.a. Vladimir Putin’s enterprises.
Tass quoted a source close to the transaction, who said, “The enterprise has been sold together with the personnel, and the contracts on the balance sheet,” adding that the company did not sustain major losses since there had been no real expenses shelled out on the projects yet.
The source explained that “Russia remains in the projects through Promsyryeimport,” and thanks to that it is retaining “control over the projects, and all formulated plans remain in force.”
The budget for developing both fields is estimated at a relatively measly $740 million, and the contracts are for 10 years. The expected annual output will It be as much as 2 million tons of crude. In today’s markets, one ton of crude oil (Iran has no refining capacity) is worth roughly $420, which could yield an annual income of $840 million once production gets on the way.
Promsyryeimport has been operating an “oil-for-goods” program in Iran. Basically, Russia siphons off Iran’s crude, and Iran receives Russian goods in return (ah, just smell those beluga…). The current barter deal gives the Russians about 100,000 barrels a day, according to Tass.
And now you know why Russia won’t let Israel bomb Iranian terror militias in Syria. Not as long as the Tehran chicken is still giving good plucking.