Chaired by Owji and Novak, the Council is tasked with following up on cooperation between Tehran and Moscow.

New Chapter

The economic and political relations between Iran and Russia have had numerous ups and downs in the past years, but the level of these relations in the 13th administration has gone beyond that of the previous administrations in such a way that the presidents of the two countries met five times in 2022 alone and focused on expansion of cooperation.

More than 50 Iranian experts and deputy ministries and representatives of various organizations traveled to Russia with the delegation of the Islamic Republic of Iran to attend the Iranian-Russian Business Council, and the Russians with more than 150 people consisting of public and private sectors in the form of various working groups in this have attended the meeting.

Persons in attendance were representatives from the Ministry of Petroleum, Ministry of Foreign Affairs, Ministry of Economy, Ministry of Roads and Urban Development, Ministry of Energy, Ministry of Science, Research and Technology, Ministry of Agriculture, Ministry of Sports and Youth, Ministry of Communications and Information Technology and representatives from the Presidential Office, Majlis, Armed Forces Staff, High Council of Trade, Industrial and Special Economic Zones, Atomic Energy Organization of Iran, Central Bank of Iran, National Development Fund of Iran, National Standards Organization, Chamber of Commerce and Iran Business Center.

Three working groups discussed and exchanged opinions in the 16th Business Council meeting. The working groups included "Water and Power", "Space", "Oil and Gas", "Atomic Energy", "Agriculture", "Transportation and Customs", "Standard", "Banking, Finance and Investment", "Culture, Labor and Sports", "Free Zones", "Trade", "Communications, Information Technology" and "Science and Technology".

Addressing the meeting, Owji thanked Novak for hosting the event, saying:  “Fortunately, the relations between the Islamic Republic of Iran and the Russian Federation are expanding and we are in the golden era of the relations between the two nations and the two great countries of Iran and Russia.”

He said that the relations between the two countries have never been so close to each other and this golden opportunity should be used to the fullest.

All-Out Development

Owji enumerated grounds for cooperation between Iran and Russia as follows: Establishing extensive banking cooperation to create a suitable and reliable payment system in order to facilitate trade and investment, swap energy carriers, especially gas, crude oil and petroleum products, and develop Iran's gas export markets with the participation and investment of the Russian side in various sectors of Iran's oil industry, especially development of the value chain of petrochemical products, oil refining and field development, activating the North-South Transport Corridor, especially focusing on the full utilization of existing capacity and infrastructure development.

He also called for the mutual acceptance of the two countries’ standard system with the aim of developing trade, exchange of agricultural products, including the import of grain from Russia and the export of tropical agricultural products to Russia, and the use of Iran's position as a transit hub and swap of Russian agricultural products, creating a joint fund for regional and global investments, bilateral guarantee funds to issue mutual guarantees for the companies of each side with the aim of reducing the risk of trade and investment among other work axes between the two countries.

Among the other domains of negotiations between Iran and Russia in the energy sector, one may refer to technology transfer in the field of IOR and EOR, in which case some oil wells would be used for hydraulic fracturing.

Achieving a favorable level of trade between the two countries is of great importance, especially in infrastructure areas such as the North-South Corridor, oil and energy, transit; monetary, banking and customs cooperation. To that effect, Minister Owji has said it would help the two nations reach a favorable level of trade.

Nasrollah Ebrahimi, acting head of the Secretariat of the High Council of Trade, Industrial and Special Economic Zones, has said major Russian firms from various sectors attended the meetings.

“They have held serious economic negotiations with their Iranian counterparts in the field of joint investment in projects between the two countries and welcomed Russian investors to participate in Iran's petrochemical hubs, oil and gas, airport, etc.” he said.

“In the first step, it is planned to create a connection between Lotus Astrakhan, Anzali and Chabahar Free Zones, and in the future, they are going to extend the connection to the Mundra Free Zone of Mumbai, India. In this meeting, Russian private and state-owned banks were invited to operate in the common free zones of the two countries within the framework of transparent and unified regulations. In case these banks wish to form offshore banks and international stock markets, the ground will be paved for them. The two countries’ capital markets should be assisted in terms of bank transactions,” he added.

$44bn Investment in Energy

Iran’s Petroleum Ministry in the 13th administration has held intensive negotiations with the managers of the Russian energy industry for the development of relations between the two countries in the energy sector. It has already signed more than $4 billion worth of contracts with large Russian companies for the development of oil and gas fields. Meantime, more than $40 billion worth of memorandums have been signed with large Russian companies in various fields, such as construction of gas pipelines to neighboring countries, swap of oil, gas, petroleum products, and export of petrochemical products. In this regard, petrochemical products and catalysts were exported to Russia last month.

According to Owji, Russian firms and investors have so far finalized $4.5 billion worth of agreements for the development of seven oil and gas fields in Iran.

Mohsen Khojasteh-Mehr, CEO of National Iranian Oil Company (NIOC), has referred to the $40 billion memorandums, saying: “This memorandum is related to development of three gas fields in the Persian Gulf and 6 oil fields in Iran, which are approaching the end of the studies and whose MDP is available. Therefore, in late November, a high-level delegation of Russian companies will travel to Tehran to present a report on this memorandum and finalize it.”

Neutralizing Sanctions

Touching on possible sanctions that the US and the European Union plan to apply to Russia in January, Owji said: “Iran has been facing such sanctions for years, so it is a good opportunity to neutralize the sanctions with the help of two countries.”

Referring to the implementation of agreements and joint plans between Iran and Russia in the near future, he said: “Right now, there is a strong will in the public and private sectors of both countries to neutralize the sanctions.”

He added: “Iran and Russia have good capacities, especially in the field of hydrocarbon resources in the region. The oil and gas resources of the two countries are very influential in the world today, and fortunately, the two countries have made good and aligned decisions within the framework of OPEC+ alliance.”

He said that Iran’s Petroleum Ministry would work in favor of broader strategic cooperation in various domains of the energy sector.

Noting that a historical opportunity had been created for the two countries to broaden their ties, Owji said: “Iran-Russia cooperation will not only result in growth in both countries, but also it will prepare the ground for other countries in the region to grow.”

He said Iran and Russia were both under unjust sanctions, saying: “By relying on our own potential, we are sure we can neutralize these sanctions.”

Russia Investment

Novak has laid emphasis on better ties between Iran and Russia in the energy sector, saying: “Russian companies are currently investing in the oil fields of Islamic Republic of Iran, and the volume of such investments will increase next year.”

He referred to a very large package of agreements in the field of energy and added: “For example, this year Gazprom signed a memorandum of understanding with NIOC. Agreements have been made regarding recovery from the gas fields of Islamic Republic of Iran, as well as the export of gas to third countries.”

“We have also agreed on the swap of oil products and this cooperation is promising,” he added.

Novak said Iran-Russia relations had strategic commercial and foreign policy ties, noting that they were determined to expand their ties.

“I express my gratitude to Iran’s petroleum minister due to his constructive approach and his review of all aspects of cooperation,” he said.

Novak said the Russian-Iranian Business Council meeting could give a fresh impetus to Tehran-Moscow ties. He added that Iranian and Russian presidents had developed reliable ties.

“Trade exchanges between the two countries are developing and expanding. During the first eight months of 2022, they grew 45% year-on-year,” he said.

“Iran and Russia are among the main exporters of hydrocarbon. For this reason, we try to focus on other commercial areas such as construction materials, petrochemical trade, as well as agricultural products,” he added.

Novak said that agreement had been made for Iran and Russia to remove obstacles to commercial and economic cooperation. “We will also help Islamic Republic of Iran reach agreement with the Eurasia Union for free trade.”

“It was also agreed to have joint projects in the field of shipbuilding, automobile manufacturing, and airplane manufacturing, and joint Iranian-Russian companies would be formed to cooperate in supplying necessary parts,” he said.

Deepened Ties

The relations between Iran and Russia have become more intimate over recent years, and the two countries, as Caspian Sea littoral states, have realized in these years that in order to strengthen their forces in the region they must act in accordance with collective and neighborly behavior in order to confront the Western bloc.

This issue has been highlighted in the 13th administration more than in the past, and with the unfolding crisis of Russia-Ukraine war, the Russian side has focused more on strengthening this relationship.

In the economic sector, cooperation between Iran and Russia has been increasing in the last few years, and according to statistics, despite COVID-19 restrictions in the last two years, the volume of trades shows a good increase.

The total value of the goods exchanged between Iran and Russia in 2021 was $4.035 billion, which is the highest figure in the history of relations between the two countries. Of this amount, $3.068 billion was worth of Iran's imports from Russia and $967 million worth of Iran's exports to Russia. The figures for 2020 were respectively as follows: $2.22 billion, $1.425 billion and $795 million. A two-fold increase is visible.

At the same time, the volume of trade between the two countries has seen a significant jump in the past two years, especially in the export of Iranian goods to Russia, and as the numbers show, commercial cooperation between the two countries in 2022 is on a sharp rise.

As far as oil and gas is concerned, it could be argued that Iran and Russia have seen a big jump ever since the 13th administration took office in Iran. Minister Owji visited Moscow twice in the first half of the current calendar year and met with senior officials there.

The Russian-Iranian Business Council first met in December 1996, which was the first one following the collapse of the Soviet Union in 1991.

The 15th meeting was held in June 2019 in Iran.

Courtesy of Iran Petroleum