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Iran, Russia reach deal to circumvent US oil sanctions

Iran, Russia reach deal to circumvent US oil sanctions

An Israeli foreign ministry document reportedly reveals that Russia and Iran have reached a deal to circumvent the last round of US sanctions scheduled to go into effect in the beginning of November, I24 News reported.


The agreement contemplates Iran supplying its crude oil to Russia through the Caspian Sea to be thereafter exported worldwide, Israeli television news station Hadashot reported Sunday. It is not yet clear what form of compensation Russia will pay to Iran for the oil supply, but it will likely be through trade and service benefits.


Trump slapped a first round of sanctions on Iran in August after pulling out in May from the 2015 international deal aimed at curbing Tehran's nuclear ambitions, to the dismay of his European allies. A second round of punitive measures is due on November 4 to target Iranian crude oil.


Trump argues that funds from the lifting of sanctions under the Iranian nuclear agreement have been used to support terrorism and build nuclear-capable missiles.


European allies have pledged to keep the deal alive, with plans for a mechanism to let firms skirt the US sanctions as they do business with Iran.


The agreement is meant to “to avert the collapse of the Iranian economy” following the new sanctions and accordingly “prevent Iran from withdrawing” from the 2015 nuclear deal.


However the Israeli report said it was a “very significant” deal “to breach the US sanctions wall”, which begins with oil exports but could have broader ramifications.


Rouhani has scoffed at what he considers the US’ vain attempts to prevent Iran from exporting its oil entirely.


It is not clear how other countries will respond, as European powers have suggested they would seek ways to make sure trade relations are not affected despite US threats.


The Russian-Iranian arrangement was said to be struck last month in Tehran during summit talks attended by Russian President Vladimir Putin, Iranian President Hassan Rouhani, and Turkish President Recep Tayyip Erdogan.


Iran's currency has been in steady decline since the start of the year as the country anxiously anticipates the re-imposition of full US sanctions, trading at record lows and losing nearly two-thirds of its value against the dollar.


The first wave of sanctions imposed over the summer applied to trading with US dollars by the Iranian government, trade in gold and other precious metals, and trade in graphite, aluminum, steel, coal, and software used in industrial processes.


Transactions related to the Iranian rial, Iran's issuance of sovereign debt and the country's large automotive sector were also under sanction.



But last month, the UN's top court ordered the United States on Wednesday to lift sanctions on humanitarian goods for Iran.


Tehran hailed its "victory" after the International Court of Justice ruled that sanctions re-imposed after Trump pulled out of a nuclear deal put Iranian lives at risk.


The US said the case was "meritless" and only involved a few sanctions, although the decision is still likely to rile Trump.


It remains unclear whether the judgment will be anything more than symbolic because both Washington and Tehran have ignored ICJ decisions in the past.


US-Iran relations have plunged to a new low since Trump's election in 2016 Trump and Iranian President Hassan Rouhani facing off at the UN in September.


Despite their 1955 Treaty of Amity and Economic Relations, Iran and the United States have not had diplomatic ties since 1980.


Hearings in a separate Iranian case against the US freezing of around $2 billion of Iranian assets to help American terror victims is due to start at the ICJ next week.