Daily Israel Report

U.S. Threatens Russia with Sanctions Over Oil Deal with Iran

Treasury Secretary Jack Lew tells his Russian counterpart that any oil-for-goods deal between Iran and Russia could lead to more sanctions.
By Elad Benari
First Publish: 4/11/2014, 2:12 AM

U.S. Treasury Secretary Jack Lew
U.S. Treasury Secretary Jack Lew
Reuters

The United States is threatening Russia with more sanctions, not only over the situation in Ukraine but also over a possible oil deal between Moscow and Tehran.

Reuters reported that U.S. Treasury Secretary Jack Lew told his Russian counterpart on Thursday that any oil-for-goods deal Moscow might strike with Iran could run afoul of U.S. sanctions.

"Secretary Lew reiterated our serious concerns regarding reports of a possible deal between Russia and Iran involving oil-for-goods," a Treasury representative said in a statement, after Lew met with Russian Finance Minister Anton Siluanov.

"He made clear that such a deal ... could trigger sanctions against any entity or individual involved in any related transactions," the representative said, according to Reuters.

Lew also told Siluanov a deal would run counter to an agreement between Iran and six world powers, including the United States and Russia, in which Tehran promised to curb its nuclear program in return for a modest easing in Western sanctions. The sanctions were imposed to choke off Iran's oil revenues.

Reuters reported last week that Iran and Russia had made progress on a barter deal that could be worth up to $20 billion under which Moscow would provide Russian equipment and goods in exchange for Iranian oil.

The interim agreement with Iran is meant to lead to a final accord that minimizes any potential Iranian nuclear weapons threat in return for a full lifting of sanctions.

The sides met again for another round of talks in Vienna on Wednesday, following which Iranian Foreign Minister Javad Zarif said the two sides were up to 60% in agreement.

A senior U.S. official was less upbeat but said all sides were committed to keep trying.

Lew and Siluanov also spoke about Ukraine, Thursday’s report said, with Lew repeating that the United States stood ready to impose additional sanctions on Russia if it continued to step up tensions, according to the spokesperson.

"Lew stated that the United States continues to believe that there is an opportunity to resolve the crisis through diplomacy," the representative said, according to Reuters.

The representative added that Lew encouraged Russia to further participate in an international effort to restore Ukraine's economic health, "especially as it relates to the free flow of energy and trade."