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EghtesadOnline: Russia has said it may join a European Union payment system aimed at salvaging the Iran nuclear deal if the mechanism is expanded to include oil purchases.

The system, called Instrument in Support of Trade Exchange (INSTEX), is designed to facilitate payments to Iran despite the US trade sanctions reimposed on the country after Donald Trump pulled out of the landmark agreement in 2018, The Telegraph reported.

With its economy grappling with the US blockage of crucial oil exports, Iran said this month it would begin enriching more uranium than allowed by the “joint comprehensive plan of action”.

In a not-so-subtle reference to the United States, Vladimir Putin's spokesman on Thursday called INSTEX an “important initiative” to protect European companies from “illegal attempts by third countries to limit their activities”. He said Russia was watching to see how well it functioned, Financial Tribune reported.

“With consideration of the initial experience using this system when it is activated, we can't exclude our cooperation in this,” the spokesman said. 

Foreign Minister Sergei Lavrov, however, complained on Wednesday that INSTEX was only covering deliveries of food, medicine and other humanitarian aid, “which aren't banned by the Americans anyway”.

To bolster Iran's economy and ensure the survival of the deal, INSTEX would need to facilitate oil exports as well, he said. 

“Payments of a few million dollars have been completed through this channel. That's nothing compared to the obligations that Iran's partners took on as part of the join comprehensive plan of action,” he said during a press conference with the foreign minister of Côte d'Ivoire.

“These assume the unimpeded purchase of Iranian oil and the unimpeded transfer of payments for delivering this energy source.”


Third Parties Welcome

Backed by 10 EU states, INSTEX was launched in January but only became operational last month. It offers Iran a credit line of several million euros, far less than the €20 billion in annual trade the EU did with Iran before the US sanctions.

The EU has said it would welcome third countries to join INSTEX but is still deliberating over whether the system should include oil payments. 

Saving the nuclear deal will require the continued support of Moscow, a key ally of Tehran. 

It is China, however, that may be able to do the most for Iran's economy by buying its crude oil in defiance of US sanctions.

Lavrov's comments echoed those of Iranian officials who said INSTEX was a positive development but insufficient to keep the county solvent.  

The country's envoy to the United Nations called the system a “very lovely car but without any gasoline”.


Iran Russia European Union Sergei Lavrov nuclear deal oil sales Payment System Mechanism INSTEX Inclusion join oil purchase however