To counter the effects of the EU powered coalition against it on gas supplies, Russia and Iran have agreed to sign a free trade agreement with the Eurasian Economic Union, Russian Deputy Prime Minister Alexander Novak said yesterday

The Eurasian Economic Union is an economic union of some post-Soviet states located in Eurasia. The Treaty on the Eurasian Economic Union was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan, and Russia, and came into force on 1 January 2015

The deputy prime minister said Russia and Iran are also eyeing opportunities for joint projects, including in shipbuilding.

Also Read: Oil Price Cap Against Russia: Cracks Appear Among The Ranks Of EU Members

“We have also agreed to remove all barriers that exist today on the way of developing bilateral trade. And we are talking about reducing barriers at the borders with third countries. We have agreed to conclude an agreement on a free trade zone between Iran and the Eurasian Economic Union in the near future,” Novak said.

News of the new coalition follows reports that Iran and Russia would continue to work out the details of their oil and gas supply swap, which is expected to be signed by the end of this year.
The swap deal could involve 5 million tonnes of oil and 10 billion cubic meters of gas per year—at least in the first stage of the agreement.

Novak was also quoted saying that the deliveries from Russia to Iran had already begun, and that they would now look to expanding the types of products covered by the agreement.
Novak said trade turnover between the two countries would soon reach $4billion, having already increased this year, by 36.4%, reaching $3.3 billion.

Also Read: US Fears That Russia Could Still Evade The Oil Price Cap

Observers said yesterday that a deal with Iran regarding oil and gas shipments and shipbuilding projects would give Russia more latitude when it comes to shipping its sanctioned goods that would otherwise be subject to an outright ban or price caps.

Russia is hoping to find more outlets for its oil and gas as the measures against it go into effect. And if there is a subject that Iran knows best, it’s how to evade sanctions, the report said.

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