11:23 GMT03 August 2021
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    Russia hasn’t ruled out the possibility of joining Instex, while participants are considering including oil in this European mechanism for trade with Iran. Sputnik has discussed the future of Instex with Nazanin Armanian, an Iranian political scientist and author based in Spain.

    According to Nazanin Armanian, the European proposal to launch the Instrument in Support of Trade Exchanges with Iran (INSTEX) has three main objectives:

    • “to hide its inability to comply with the nuclear agreement with Iran, despite the fact that only the US, one of the seven signatories of the nuclear agreement [Joint Comprehensive Plan of Action (JCPOA)], has abandoned it”;
    • “to give Iran an empty box of candy to keep it within the nuclear agreement”;
    • “not to lose the huge Iranian market, filling it with surpluses of its pharmaceutical and food products, the two groups of articles on which Instex is cantered”.

    However, according to Armanian, it hasn’t been taken into account that such products are not subject to US sanctions and Iran can acquire them from other suppliers. If Tehran doesn’t sell its oil, it won’t be able to pay for what it buys, so Instex will increase Iran’s debts to these countries, she explained

    “The current US sanctions imposed on Iran are worse than those imposed on Iraq by [former US President George W.] Bush as part of the Oil for Food programme, since [US President Donald] Trump is preventing Iran from selling its oil on international markets”, the analyst stressed.

    “If Russia manages to introduce oil into Instex, this problem would be solved”, Armanian noted.

    While Instex shareholders are discussing the possibility of including oil operations in the mechanism, US Treasury Secretary Steven Mnuchin is threatening countries that plan to trade with Iran with cutting off access to the dollar if they fail to comply with US sanctions.

    “One of the shortcomings of this mechanism is that, although it makes it easier for European companies to access Iran’s banking system, it doesn’t protect them from the harsh US sanctions”, the political scientist told Sputnik.

    At the same time, “it’s an opportunity for European countries to recover their national sovereignty. Spain has been a buyer of Iranian oil, and its companies reacted to the lifting of anti-Iranian sanctions in 2015 with great enthusiasm”.

    “In the same way that the Spanish government withdrew its frigate that escorted the USS Abraham Lincoln in the Persian Gulf, unmarking itself from the US war plans against Iran; we should break the illegal and dangerous US sanctions on the Iranian nation”, Nazanin Armanian said.

    According to the political analyst, the oil tanker war in the Persian Gulf shows that the US is willing to take the world to the brink of a major catastrophe in order to reduce Iranian oil exports to zero as Trump promised.

    “Right now, history has entrusted Russia and China with the mission of guaranteeing world peace, neutralising Trump’s war intentions, and helping Iran export its oil”, Armanian pointed out.

    For his part, Peyman Moulavi, secretary-general of the Association of Iranian Economists, noted that Russia is an oil exporter and in direct competition with Iran on the crude oil market.

    “In fact, Russia’s energy resources are also under US sanctions. But on the other hand, from the point of view of an exporter outside OPEC, Russia is an oil exporter and Iran’s direct competitor in the oil market. The creation of such a mechanism, which could consolidate trade between the two countries, is possible. Just as Iran cooperates with Europe, it can cooperate with Russia, India and China. The question is where the red line of this cooperation is”, Moulavi said.

    “The Europeans created the Instex system, but it hasn’t started working yet, because otherwise it could lead to US sanctions. Therefore, there is the same problem as in Russia – where is the point of achieving maximum cooperation?” the expert told Sputnik.

    “It seems to me that Instex is a clearing platform, that is, the money paid for Iranian oil should go through a compensatory transaction. And this, unfortunately, depends on the potential of the companies, the level of their capital, which can carry out this mutual transaction”, Moulavi said.

    “But in any case, if the commercial exchange grows, the pressure of the sanctions will increase”, he concluded.

    The views expressed in this article are solely those of the speakers and do not necessarily reflect the official position of Sputnik.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.

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    Russia, US, Iran, INSTEX, oil, Trade
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