Russia and Iran: Shaping A New Building Block in the Global Energy Trade

By The SLD Team

Unfortunately, Inside the Beltway seems preoccupied with mirror its experience on to what the Russians are doing in the Middle East.

Because the US has gotten bogged down in a more than decade long COIN and air engagement against ISIS with more people in the CAOC than bombs on target, the assumption is that the Russians will not only get bogged down, but have no clear objectives.

Whether he succeeds or not in a volatile part of the world is open to question.

What is not is that he does not have clear objectives.

In addition, to expanding his naval presence and establishing an air base to operate in conjunction with the naval base, and thereby expanding his Mediterranean military infrastructure, Putin always things like a commodities broker.

And the Iran opening which has yielded no demonstrated advantage to the United States, clearly has for Russia.

iranrus1

And one of this advantages involves expanding routes to transit Russian energy to the global markets.

According to a piece by Tyler Durden, Iran could well be opening a passage to Asia for Russian crude oil.

Russia is looking to expand its influence through oil trade. And a little-reported deal this week may give it access to an entirely new part of the planet when it comes to crude exports.

That’s the Persian Gulf. Where reports suggest Russia is close to negotiating a “secret passage” for its oil shipments.

The move is coming through a deal with Iran, which that government says could open the door for crude oil swaps between the two countries — facilitating exports of “Russian” oil out into Asia and beyond.

Iran’s Deputy Petroleum Minister Amir Hossein Zamaninia told local press Monday that Russian energy company representatives will be arriving in Iran this week to discuss such a swap deal.

Here’s how it would work.

Russia lacks access to ocean shipping routes beyond the Pacific and Arctic. Iran has better access, through its ports on the Persian Gulf.

But Russia does have ports on the Caspian Sea. And as the map below shows, that provides a short shipping route into Iran.

Russia and Iran can exchange crude oil shipments along the Caspian Sea

The swap scheme would see Russian crude oil sent to Iran, in exchange for equal shipments of Iranian crude flowing to Russia.

And from there, it will be interesting to see what happens.

Officials said that Russian oil would likely be used within Iran’s northern provinces. But the swaps agreement opens up another possibility — Russian crude could be sent further south, and even exported through Persian Gulf ports.

That would give Russia unprecedented access to markets around the Indian Ocean — including go-to crude buyers in Asia, greatly changing the dynamics of oil markets in this part of the world.

Special thanks to Dr. Harald Malmgren for bringing this issue to the attention of the editorial team.

Bookmark this article.

Leave a Reply

Your email address will not be published. Required fields are marked *