Iran, Russia strengthen ties through food, carpets, banking & more
3 Min Read
Cooperation between Moscow and Tehran will only weaken the impact US sanctions have in a changing world.
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People walking inside a Tehran mall in Iran, April 20, 2020 (WANA)
Iran and Russia have been warming up in relations, with reports in July revealing that Iran had become Russia's top customer in purchasing Russian wheat with 360,000 metric tonnes in deliveries according to data-intelligence company Kpler.
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This month, Russia launched an Iranian satellite into space, as a part of Iran's space program, which is coming to success.
The two countries' close collaboration comes against a backdrop of targeted and comprehensive sanctions waged by the West against them, which has prompted closer cooperation in the long run. The US-led world order has only polarized alliances further.
The closer cooperation will ameliorate the aggressive impacts of the West-led sanctions on the two countries by locating new markets for their products and boosting military cooperation. Recently, US National Security Advisor Jake Sullivan called the ties a "profound threat".
Furthermore, bilateral trade has risen 10% between the two countries this year - in 2021, according to Russia, bilateral trade increased 80% higher, reaching $4 billion.
With food and military cooperation on the rise, there is also carpet and clothing trade with frequent Russian customers, doubling since February and now making up half the customer base.
Iran is also selling clothes to Russian buyers, replacing Western brands and automotive spare parts to Russian car makers.
Earlier this month, the Iranian Finance Ministry's banking and insurance department said Iran could join the Russian Mir payment system within months of when talks between Tehran and Moscow reach a conclusion - this, according to Qorban Eskandari, the department's head, could be in the very near future.
Last month, authorities in the Iranian Foreign Ministry announced that they will soon begin to accept Mir cards for transactions. The development in economic relations came during rising reports that Tehran and Moscow were working on expanding economic relations to combat US sanctions.
Read more: Iran’s experience in facing sanctions available to Russia and may inspire it – Experts
On July 23, Iran's Currency Exchange (ICE) launched a currency pairing system that enables exporters and importers to make payments in both the Iranian rial and the Russian ruble.
In July, Kremlin aide Yury Ushakov highlighted that "Iran is an important partner of Russia, relations are of a friendly nature, have a long history, and are developing very effectively in the widest range of areas. Both sides have plans to bring bilateral cooperation to a new level — the level of strategic partnership. A new interstate agreement is being prepared.”
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In other words, Ushakov said that Russia and Iran have plans to elevate their relations to the level of a strategic partnership and that a new deal is being drafted.
Last February, Russian banks were excluded from the SWIFT interbank payment system by the decision of the European Commission and its allies. The maneuver was intended to hit the country's banking network and its access to funds via SWIFT, which is pivotal for the smooth transaction of money worldwide.
