TEHRAN (Mehr News) — Oil cooperation between Iran and Russia can be boosted to some $50 bln and Moscow has expressed readiness to make this investment, said Iranian Leader’s senior adviser Ali Akbar Velayati on Thursday. He made the remarks during a live interview with Iran’s state TV on Thursday noon.

Ali Akbar Velayati

(Credit: Majid Asgharipour / Mehr News)

Referring to his meeting with Russian President Vladimir Putin earlier today, Velayati said that the message of Iran’s Leader and president was delivered to the Russian official: “The meeting lasted for some two hours and it was very constructive, clear and friendly,” he noted, adding, “we talked about topics of mutual interest.”

President Putin highlighted that the volume of trade between the two countries have increased by 36% in the first four months of 2018, Velayati added. The Iranian official went on to say that a $4-bln oil deal with a major Russian firm will become operational in the near future. Two other major Russian oil companies have also made initial sign contracts with Iran which would be worth $10 bln, he added.

Mr. Putin’s reports in the meeting demonstrated that Iran-Russia oil cooperation can be developed to some $50 bln which is a considerable volume, he said, adding that Russia can appropriately replace Western companies, such as French Total which have left Iran due to US sanctions.

Meanwhile, Indian refiners cut imports of Iranian oil last month as they started weaning their plants off crude from the country to avoid sanctions by the United States that are set to take effect in November. India’s monthly oil imports from Iran declined to 592,800 barrels per day (bpd) in June, down 16% from May, according to data from industry and shipping sources reported by Reuters.

Iran had been pushing hard for oil producers to hold output steady as U.S. sanctions are expected to hit its exports, meaning Tehran had little to gain from OPEC production increases that lower oil prices and cut its revenue. However, Saudi Arabia and Russia had other ideas. According to three sources close to OPEC and Russia, the world’s two biggest oil exporters agreed in May to work hand in glove to engineer a sizeable increase in oil output — notwithstanding for different reasons.

With their end game in mind, Russia first proposed that the combined output of OPEC countries and non-OPEC allies, such as itself, should jump 1.5 mln bpd from July. Their tactic was for Saudi Arabia to then suggest a more modest rise of less than 1 mln bpd in the hope it would be acceptable to Iran, Reuters reported. Russia, meanwhile, was under pressure from its own energy companies to lift caps on output and fight a steep rise in domestic fuel prices that was hurting Putin’s popularity, according to two Russian oil industry sources.