Israel Matzav: Russia double dealing again

Russia double dealing again

Just two days after his country voted in the IAEA Board of Directors to censure Iran for its nuclear program, Russian Energy Minister Sergei Shmatko met with Iranian Foreign Minister Manouchehr Mottaki about the sale of refined oil products to Iran.

Shmatko met on Sunday with Iranian Foreign Minister Manouchehr Mottaki and was scheduled to meet Ali Akbar Salehi, head of Iran’s Atomic Energy Organization. Shmatko and Salehi will visit the delayed Bushehr nuclear power station. He will also meet Iranian Oil Minister Masoud Mir-Kazemi, an Energy Ministry spokesman said.

“We’re going to be discussing downstream projects as well as upstream projects. There’s a project to develop Iran’s petrochemicals industry, and Sibur is very interested,” Shmatko told reporters Friday in Moscow.

Sibur, controlled by Gazprombank, is Russia’s largest petrochemicals company.

“Plans for deliveries of oil products by Russian oil companies will also be discussed,” Shmatko said.

There is a widespread expectation that European countries could approve sanctions, including a halt on fuel exports to Iran. The country imports about 40 percent of its oil products at a cost of between $5 billion and $7 billion annually, depending on prices.

Russia currently does not export oil products to Iran, said Mehdi Ghazanfari, Iran’s commerce minister, who in June listed only iron, steel, wood, electrical equipment, paper, fertilizers and vehicles as imports from Russia.

Spokespeople for Rosneft, LUKoil and TNK-BP said they were unaware of any plans by their companies to begin oil product exports to Iran or whether company executives would accompany Shmatko on the trip.

“Everything depends on the price,” said LUKoil spokesman Dmitry Dolgov, when asked about prospects for such export deals.

Rosneft spokesman Nikolai Manvelov said: “If it’s interesting, we will go for it.”

A call to the Iranian Embassy went unanswered Friday afternoon.

It should be clear from this meeting that a Russian vote in favor of sanctions is not in the bag, that Russia is willing to play both sides of the fence, and that Russia is taking advantage of the Obama administration's weakness. Unlike China, I doubt Russia would feel threatened by a possible cutoff in Gulf oil exports in the event of an Israeli attack on Iran. If anything, the resulting rise in price would probably benefit the Russian economy.

What could go wrong?

Israel Matzav: Russia double dealing again