OREANDA-NEWS. Iran has again raised the imminent prospect of selling crude to Russia, although details are scant and there is no confirmation from Moscow.

Iran's oil minister Bijan Namdar Zanganeh said negotiations to supply Russia with 100,000 b/d of its crude are "in the final stages" and that a contract will be signed within two weeks. He had met with Russian energy minister Alexander Novak in Tehran.

No real indication was given as to the logistics of such a deal but Zanganeh did say that the volumes would be taken "by a Russian company for a specific destination outside of Russia.".

Russia's state-controlled Rosneft is hungry for crude, but not to take to Russia. This week it struck offtake deals with Libya's state-owned NOC and with Iraq's semi-autonomous Kurdistan region, as it looks to secure crude for its growing overseas refining operations.

The Russian firm last year bought a 49pc stake in India's 400,000 b/d Vadinar refinery, which it plans to load with its own crude. In Germany, Rosneft holds a 25pc stake in refining consortium Bayernoil, which operates the 210,000 b/d Neustadt-Vohburg refining complex, a 24pc stake in the 301,000 b/d Miro refinery and controls the 208,000 b/d Schwedt refinery with 54pc.

Talk of Iran supplying crude to Russia first surfaced in February 2014 when Iran's ambassador to Moscow Mehdi Sanaei said the two countries were mulling a deal that would in turn see Russia supplying goods and technologies. US and EU sanctions on Iran over its nuclear programme hindered efforts to move this forward, but the initiative appears to have been given new life since the lifting of sanctions in January 2016.

With Russian production long running at around 11mn b/d — and recent output at much higher, record levels — and it sharing no border with Iran and no pipeline link, both the logic and the logistics of Iranian crude going into Russia, looked dubious. Sale to a Russian company for refining abroad makes much more sense.

This latest round of talks on the crude supply proposal is the second in as many months, after a meeting between Zanganeh and Novak in Tehran in December. Then, as now, details were thin. But Zanganeh said Russian payment for this crude would be made both in cash and in the provision of Russian goods "that Iran requires." The split will be 50:50, he said.