“With this agreement with Iraq for the barter of oil for gas, the US ability to stonewall (payments) will be restricted, and given Iraq’s situation, the deal can benefit Iran,” said Hamid Hosseini, who serves as board manager at Iranian Oil, Gas and Petrochemical Products Exporters Union (OPEX), on Saturday.
Hosseini said that Iran will be able to receive some 30,000 barrels per day (bpd) of heavy-grade crude oil and another 70,000 bpd of mazut from Iraq to compensate for a part of its supply of natural gas and electricity to Iraq which he said is believed to be between $10 million and $15 million per day.
Facing a lower supply of natural gas from Iran to its power plants, Iraq was grappling with extensive power cuts during the scorching heat of early July.
The Arab country finally decided to agree to a long-running proposal from Iran to pay for the country’s natural gas and electricity in crude oil.
The agreement came after repeated US attempts to stonewall the payment of nearly $11 billion worth of funds to Iran that the Iraqi Ministry of Electricity had deposited into accounts in the Trade Bank of Iraq.
The agreement allowed Iran to restore its supply of natural gas to Iraqi power plants to levels agreed between the two countries under a gas export deal.
OPEX’s Hosseini said the barter agreement between Iran and Iraq has already angered the US as Washington has imposed sanctions on 14 Iraqi banks over their cooperation with Iran.
He said Iran will be able to gradually increase its imports of crude oil and mazut from Iraq under the barter deal to settle all of the arrears owed by Baghdad to Tehran.