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Crude, Food Prices Jump As Looming Israel-Iran Conflict Spark 1970s Oil Shock Fears

Crude, Food Prices Jump As Looming Israel-Iran Conflict Spark 1970s Oil Shock Fears

Larry MacDonald of The Bear Traps Report penned a very informative note last month that outlined, “2023-2024 look a lot like 1973-1974.” He said, “We’re one event away from a 1970s-style stagflation explosion…” History books remind us that the 1973 oil embargo shook the global energy market.

We were reminded of MacDonald’s note because the global benchmark Brent is currently being subjected to a major repricing event of geopolitical risk as Israel makes preparations for a potential retaliation by Tehran after a precision strike in Syria earlier this week killed top Iranian commanders.

“The market now knows that some kind of retaliation from Iran will likely come, but it doesn’t know when and where and what, and that creates a great discomfort and nervousness,” Bjarne Schieldrop, chief commodities analyst at SEB AB, told Bloomberg.

On Thursday, UBS desk trader Alexander Gray outlined several bullish factors into Brent’s surge that has the benchmark around $91/bbl handle:

  1. Rally / buying right into the 14:30 New York energy close – suggests heavy index fund prepositioning ahead of GSCI roll onset tomorrow where energy will be weighted in the index
  2. Geopolitics – reports of potential attacks within Iran and also potential retaliation toward Israel following Monday’s airstrikes.
  3. Bullish consensus and flow – a number of Street strategists have been out today talking about upside risk toward the $95-100 range in crude. Meanwhile, flows here have skewed toward upside buying in the options space
  4. Technicals – Front-month WTI crude oil just completed a ‘golden cross’ technical formation with the 50- and 200-day moving average crossover. The front month is aimed at $88.58 above; $91.08 is key as the 76.4% Fibonacci retracement level in Brent… which is precisely where Brent is trading at this moment..

…click on the above link to read the rest of the article…

Israel Warns Iran Of Massive Regional War If Directly Attacked

Israel Warns Iran Of Massive Regional War If Directly Attacked

Update(1831ET): With Israel’s embassies around the world on a heightened state of alert, and extra IDF reservists called up, and home and weekend leave for all combat troops having been abruptly canceled Thursday, the Israeli population is anxiously awaiting a response – with some reports saying residents are already seeking the safety of bomb shelters.

Tehran has vowed that vengeance is coming soon for the Monday Israeli airstrike on its embassy in Damascus. Most pundits believe this will take the form of ballistic missiles raining down on Israeli cities. But Israeli leader Benjamin Netanyahu is reportedly vowing that if the Islamic Republic launches missiles from its soil it will ensure “a strong response” from Israel.

Israeli officials have told Axios late in the day that such an act would “take the current conflict to another level” — which most certainly would involve a direct Israel-Iran war and thus the eruption of a broader regional conflict. Axios adds the following observations:

  • Iranian proxies in Lebanon, Syria, Iraq and Gaza have attacked Israel but there hasn’t been an attack from Iranian soil.
  • A direct Iranian strike on Israel would be unprecedented and could lead to a regional war in the Middle East.

Netanyahu informed his security cabinet Thursday that Israel’s forces have already been engaged with Iran “both directly and via its proxies, and therefore Israel is operating against Iran and its proxies, both defensively and offensively.”

A statement issued by the prime minister’s office laid out: “We will know how to defend ourselves and will operate according to the basic principle of whoever is harming or planning to harm us — we will harm him.” The White House has meanwhile issued a statement shortly after Biden and Netanyahu discussed the Gaza crisis, saying “President Biden made clear that the United States strongly supports Israel in the face of those [Iranian] threats.”

…click on the above link to read the rest…

Oil Surges Over $90, Stocks Tumble After Israel Puts Embassies Around World On Maximum Alert

Oil Surges Over $90, Stocks Tumble After Israel Puts Embassies Around World On Maximum Alert

At this point Israel’s ties with key Gulf countries like the UAE are near breaking point, after only a few short years ago diplomatic normalization was hailed through Trump’s Abraham accords. But international and Israeli press reports are confirming the UAE has announced it is halting all coordination on humanitarian aid with Israel.

Further, as Israeli media reports: “The United Arab Emirates (UAE) has announced a suspension of diplomatic coordination with Israel in the wake of the death of seven World Central Kitchen humanitarian workers in Gaza.” Simultaneously, Israel is busy putting its embassies across the world on high security alert due to the “heightened Iranian response threat” in wake of Monday’s Israeli attack on the Iranian embassy in Damascus. All of this served to send Brent soaring in the last two hours, with Brent spiking above $90 for the first time since October….

… and sending stocks tumbling to session lows.

With Iran vowing that its retaliation is coming at any moment, Israel’s military is scrambling for readiness, with the latest measure being to pause all home leave for all combat troops.

“The IDF is at war and the issue of the deployment of forces is constantly reviewed as needed,” the Israeli military said.

President Biden is meanwhile is said to be “pissed” with PM Netanyahu over the killing of seven World Central Kitchen aid workers in Gaza, though Israel acknowledged that it was a “grave mistake”.

So far this sounds like more mere empty words of “concern” – a talking point that’s been on repeat from the White House even as its Gaza policy continues slowly fracturing the Democratic base – but Biden is said to have pressed Bibi for “an immediate ceasefire”.

The call readout further said ceasefire is needed to “protect innocent civilians” in Gaza and improve the humanitarian situation. Axios writes that Biden gave his Israeli counterpart an “ultimatum” as the US president “emphasized that the strikes on humanitarian workers and the overall humanitarian situation are unacceptable.”

“IDF At War”: Israel Scrambles GPS Signal As Iran Revenge Attack Imminent

“IDF At War”: Israel Scrambles GPS Signal As Iran Revenge Attack Imminent

With ever-present fears, Tehran could launch a missile or drone attack against Israel to avenge the deaths of three commanders and four officers of the Iranian Armed Forces, taken out by a precision Israeli airstrike at the Iranian embassy compound in Damascus earlier this week. New data suggests that GPS jamming across Israel is likely related to prudent defensive efforts to counter such an attack.

On Thursday, Reuters journalists and Tel Aviv residents said GPS service deteriorated and, in some cases, entirely disrupted as an attempt by the military to prevent guided missiles and drones from hitting critical high-value targets deep within the nation.

Many bombs, drones, and other weapons use GNSS (global navigation satellite systems) for increased accuracy. Signs of GNSS signals disrupted are more evidence Israel is on the defensive as it awaits missile attacks from Iran.

Data from the GPS interference website “GPSJAM” shows large swaths of Israel have high levels of GPS interference.

Other signs the conflict in the Middle East is broadening and entering a new dimension are reports that the Israeli military halted leave for all combat units on Thursday.

“The IDF is at war, and the deployment of forces is under continuous assessment according to requirements,” the military told Reuters in a statement.

In a separate report, Israel’s military said it was strengthening its aerial defense system with reserve soldiers:

“It was decided to increase manpower and draft reserve soldiers to the IDF (Israel Defense Forces) Aerial Defense Array.” 

This follows the deaths of some of the highest-ranking leaders in the Quds Force, who were in charge of Iran’s covert intelligence and military operations across Syria and Lebanon on Monday. The strike was among the deadliest for the Iranian military in years (read: “ZH Geopolitical Week Ahead: This Is A Declaration Of War”).

…click on the above link to read the rest of the article…

Major Gas Pipeline Explosion In Iran Deemed ‘Terrorist Sabotage’

Major Gas Pipeline Explosion In Iran Deemed ‘Terrorist Sabotage’

In the overnight hours reports emerged of two explosions along Iran’s main south-north gas pipeline network. At least one of the massive fires that resulted was caught on video, which widely circulated, leading to speculation over whether it was an accident or attack.

Iran’s Oil Minister Javad Owji later in the day said the blasts were caused by sabotage, but did not name any suspects or possible external entity responsible. He also called it a “terrorist act”.

Via Iran International

“This terrorist act of sabotage occurred at 1 a.m. local time on Wednesday morning (2130 GMT Tuesday evening) in the network of national gas transmission pipelines in two regions of the country,” Owji said.

He described that area settlements had suffered gas outages, but there were no mention of casualties as a result of the pipeline blasts which occurred in central Iran, near the city of Borujen.

According to Deutsche Welle, “Owji pointed to a similar incident in 2011, which he called an act of sabotage, that temporarily cut gas to four different regions of the country.” And according to more details of the fallout:

Fars News Agency, affiliated with the Revolutionary Guard, reported early Thursday that the targeted pipeline is the main conduit for transporting natural gas from refineries in the Persian Gulf to major cities including Tehran, Esfahan, and Mashhad.

These explosions resulted in the closure of roads in the surrounding areas for hours, forcing residents of neighboring villages to spend hours on the streets due to fear as large flames engulfed the surrounding areas. Reports indicate that the sound of explosions and the glow of flames were visible within a radius of 60 kilometers, leading to the gas supply being cut off to dozens of villages.

Videos of the aftermath showed flames expanding high into the air…

…click on the above link to read the rest…

Iraqi parliament calling to ditch US dollar for oil trade

Iraqi parliament calling to ditch US dollar for oil trade

Washington has exercised strict control over Iraqi oil revenues for the past two decades

(Photo credit: INA)

The Finance Committee in the Iraqi parliament made a statement on 31 January calling for the sale of oil in currencies other than the US dollar, aiming to counter US sanctions on the Iraqi banking system. 

“The US Treasury still uses the pretext of money laundering to impose sanctions on Iraqi banks. This requires a national stance to put an end to these arbitrary decisions,” the statement said.

“Imposing sanctions on Iraqi banks undermines and obstructs Central Bank efforts to stabilize the dollar exchange rate and reduce the selling gap between official and parallel rates,” it added.

The Finance Committee affirmed its “rejection of these practices, due to their repercussions on the livelihoods of citizens,” and reiterated its “call on the government and the Central Bank of Iraq to take quick measures against the dominance of the dollar, by diversifying cash reserves from foreign currencies.”

Washington imposed sanctions on Iraqi Al-Huda Bank this week, under claims of laundering money for Iran. Several other banks have been hit with similar sanctions over the past year.

The statement came the same day a senior US Treasury official said Washington expects Baghdad to help identify and disrupt the funds of Iran-backed resistance factions in Iraq.

“These are, as a whole, groups that are actively using and abusing Iraq and its financial systems and structure in order to perpetuate these acts and we have to address that directly. Frankly, I think it is clearly our expectation from Treasury perspective that there is more we can do together to share information and identify exactly how these militias groups are operating here in Iraq,” the official stated. 

…click on the above link to read the rest…

‘Playground of choice’: Iran mobilises to drive US troops out of Iraq

The US has the cudgel of the American dollar to prevent its expulsion from Iraq, but will the Biden administration use it?

When Iraqi Prime Minister Mohammed al-Sudani arrived in New York City in September for the UN General Assembly, a delicate truce was in balance between the two foreign powers that loom over Baghdad.

Iraqi paramilitaries, backed by Iran, had frozen their attacks on US troops in the country. Iraq’s new leader arrived in New York City amid the lull. He was feted on a circuit of swanky receptions with western businessmen and diplomats on the sidelines of the General Assembly, as he pitched Iraq’s oil-rich but corruption-riddled economy as an investment destination.

Four months later, the Iraqi leader is condemning Iran and the US for launching deadly strikes in his country and his investment pitch to the global elite at Davos Switzerland is overshadowed by his call for the US military and its coalition partners to leave Iraq.

Since the Hamas-led attacks on 7 October and the war in Gaza, Iranian-backed militias have launched at least 70 attacks on US forces in Iraq.

In early January, the US hit back with its most powerful response yet, launching a drone strike in Baghdad that killed Mushtaq Taleb al-Saidi, also known as Abu Taqwa, a senior commander in the Popular Mobilisation Units, an umbrella organisation of Iraqi state-funded and Iran-aligned, Shia militias.

Baghdad hit out at the strike as “a violation of Iraq’s sovereignty”. But no sooner was Iraq chastising the US for the strike, when Iran launched a barrage of ballistic missiles into the Iraqi city of Erbil, killing four people, including a prominent Kurdish real estate developer and his one-year-old daughter.

…click on the above link to read the rest…

Iran Warns Against US ‘Adventurism’ After Parking Cruise Missile-Armed Warship In Red Sea

Iran Warns Against US ‘Adventurism’ After Parking Cruise Missile-Armed Warship In Red Sea

The Red Sea continues to grow busy with the presence of naval assets, as the West and its allies attempt to keep international shipping lanes open despite the threat of Houthi missiles and drones launched from Yemen. This has lately included nations such as Denmark, Pakistan and Sri Lanka sending military ships to regional waters as well.

US Secretary of State Antony Blinken while meeting with Arab leaders over the weekend before he arrived in Israel Monday evening said, “These attacks are having a real effect on the prices that people have to pay for food, for medicine, for energy. Ships have to get diverted to other places. Insurance rates go up.”

Maritime and industry analyst Sam Chambers has observed, “Over the weekend, the number of transits through the Suez Canal fell to the lowest since the waterway was blocked by the Ever Given containership in early 2021, according to Inchcape Shipping Services.”

Iranian warship Alborz, file image, Fars News Agency/AP

But amid the heavy presence Western coalition military ships, there is now an Iranian frigate parked in the Red Sea after its arrival starting nearly a week ago. “2024 was only a few hours old when Iran dispatched a warship, the frigate Alborz, to the Red Sea,” FP recently noted. “Its arrival was yet more bad news for shipping, already facing a crisis from the Iran-backed Houthi attacks on merchant vessels.”

Iran’s Foreign Ministry has issued a new statement warning Israel and America against ‘adventurism’ which will expand war in the region:

“Iran issues a stern warning against any US adventurism that could endanger regional peace,” Ambassador Amir Saeid Iravani said Tuesday in a letter directed to the US and its allies, a week after Iran’s Navy deployed a cruise missile-armed warship in the region.

…click on the above link to read the rest…

UK Navy Alerted To Incident Near Djibouti As Houthis Paralyze Red Sea Shipping

UK Navy Alerted To Incident Near Djibouti As Houthis Paralyze Red Sea Shipping

International shipping in the Red Sea and vital Bab al-Mandab Strait is grinding to a halt with tankers, container ships, and other types of commercial vessels rerouting around the Cape of Good Hope to avoid missile and drone attacks from Yemen’s Iran-backed Houthis.

In a report that has become almost daily this week, Bloomberg states that the United Kingdom Maritime Trade Operations is monitoring a new potential incident involving a commercial vessel. This latest incident is said to have occurred around 80 nautical miles northeast of Djibouti.

On Monday, Houthi rebels attacked two commercial ships in the Red Sea. Full details of the attacks were not immediately known, but spurred a handful of major shipping companies to halt transit through the Red Sea.

At least seven major shipping companies, including Taiwanese container shipping line Evergreen, Belgian tanker owner Euronav, energy giant BP Plc, Maersk, Hapag-Lloyd, CMA CGM, and Mediterranean Shipping Company have paused all commercial vessel operations through the Red Sea that connects to Egypt’s Suez Canal.

Spillover risks of the Israel-Hamas war are quickly building, as the Red Sea is responsible for 10% to 12% of the world’s international trade. These mounting risks have forced London maritime insurers to demand war risk coverage for vessels that want to transit the Red Sea.

On Monday, US Secretary of Defense Lloyd J. Austin said the US and allies, including the UK, Canada, France, and others, are creating a new naval task force to protect critical maritime shipping lanes.

…click on the above link to read the rest…

Houthi Rebels Hit Norwegian-Flagged Tanker With Anti-Ship Cruise Missile At Key Maritime Chokepoint

Houthi Rebels Hit Norwegian-Flagged Tanker With Anti-Ship Cruise Missile At Key Maritime Chokepoint

An anti-ship cruise missile fired by Yemen’s Houthi rebels struck a Norwegian-flagged tanker in the Red Sea near a key maritime chokepoint known as the Bab el-Mandeb Strait, where nearly 10% of all crude traded at sea passes through.

Reuters quoted Houthi military spokesperson Yehia Sarea, who said the tanker – named “Strinda” – was targeted because it was headed to an Israeli terminal, and the crew ignored all warnings.

However, Strinda’s owner, Norway’s Mowinckel Chemical Tankers, said the vessel was bound for the Suez Canal and then on to Italy with a cargo containing vegetable oil and biofuels.

A US official told Reuters that the attack occurred about 60 nautical miles north of Bab al-Mandab Strait, connecting the Red Sea and the Gulf of Aden around 2100 GMT. After the attack, another official said the tanker could move under its own power.

According to the US military’s Central Command, which supervises US forces in the Middle East, the Arleigh Burke-class destroyer USS Mason received a distress call from Strinda and was able to respond:

“There were no US ships in the vicinity at the time of the attack, but the (US Navy destroyer) USS MASON responded to the M/T STRINDA’s mayday call and is currently rendering assistance.” 

The Iran-backed militant group has carried out a series of attacks on commercial vessels in the Red Sea (read: here & here). They are specifically targeting any vessel they believe is going to or coming from Israel.

Bloomberg cited sources who said the US and Gulf allies have been discussing potential military action against the militant group for the latest spate of attacks on commercial vessels in the Red Sea.

As for energy markets, Brent crude futures briefly traded above $76 a barrel after Central Command posted on X about the incident on Monday night. Yet Brent gave up all gains and slid back to the $75 handle early Tuesday. Global crude markets are gripped with oversupply fears.

…click on the above link to read the rest…

3,000 US Troops Enter Gulf Region In Latest Escalation With Iran

3,000 US Troops Enter Gulf Region In Latest Escalation With Iran

Two American warships with over 3,000 newly deployed US military personnel between them have entered the Red Sea, new statements confirm Monday, as part of the Pentagon’s efforts to thwart Iranian seizures of international vessels in regional waters.

The US Fifth Fleet announced Monday the ships have transited the Suez Canal with the fresh deployment of sailors and Marines. The Bahrain-based command said the USS Bataan and USS Carter Hall warships provide “greater flexibility and maritime capability” in ensuring the safety of global shipping in the Gulf and Mideast area of operations.

US Navy, file image

The statement further said the new troops and warships will seek to “deter destabilizing activity and de-escalate regional tensions caused by Iran’s harassment and seizures of merchant vessels.” Both US warships are amphibious assault-style vessels with rapid deployment capabilities of both Marines and helicopters, and other assets.

It comes after the Pentagon has tallied that over 20 internationally-flagged tankers have been either seized or harassed by Iran’s military over the last two years, particularly in the vital Strait of Hormuz.

Last week the Pentagon announced an unconventional and controversial plan to “deploy a security guard composed of Marines on board commercial tankers passing through and near the Strait of Hormuz, to form an additional layer of defense for these ships,” according to Fifth Fleet spokesman Tim Hawkins.

But there are legal questions and hurdles to such a proposal, still reportedly being mulled – given the US Marines would be dealing with various foreign vessels, and presumably some would not give permission for them to board. It further remains unclear whether the Marines would only provide security details on US-flagged tankers, or among other close Western allies such as British-flagged vessels.

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Desertification: An Existential Crisis For Iran

Desertification: An Existential Crisis For Iran

  • Iran is grappling with severe desertification and water scarcity, leading to potentially uninhabitable territories, contributing to internal migration and posing a threat of mass exodus.
  • Tehran’s attempts to mitigate water scarcity have led to dam-building and water-intensive irrigation projects that have contributed to the drying up of rivers and underground water reservoirs, exacerbating the desertification problem.
  • Iran, one of the most water-stressed nations globally, faces potential conflict due to water scarcity, both internally and with neighboring states such as Afghanistan, adding to its socio-political challenges.
Iran

Temperatures in Iran are hitting record highs, rivers and lakes are drying up, and prolonged droughts are becoming the norm, highlighting a water crisis that is turning much of the country’s territory to dust.

The desertification of Iran is occurring at a staggering pace, with officials last month warning that more than 1 million hectares of the country’s territory — roughly equivalent to the size of Qom Province or Lebanon — is essentially becoming uninhabitable every year.

The situation has Tehran scrambling to gain control of the situation in a country where up to 90 percent of the land is arid or semi-arid. But the clock is ticking to stave off what even officials have acknowledged could lead to an existential crisis and the mass exodus of civilians.

The warning signs were on full display this month. Temperatures in southwestern Iran hit a staggering 66.7 degrees Celsius (152 degrees Fahrenheit), higher than what is considered tolerable for human life.

Iranian scientists warned that the water levels of Lake Urmia, which is in severe danger of drying up, are the lowest recorded in 60 years. And in what has become routine, advisories were issued about the threat of suffocating dust storms.

…click on the above link to read the rest…

BRICS Nations Developing “New Currency” as Quest for Global De-Dollarization Accelerates

BRICS Nations Developing “New Currency” as Quest for Global De-Dollarization Accelerates

China and Brazil recently finalized a trade deal in their own currencies completely bypassing the dollar, but that’s not the only bad news for the world’s reserve currency.

Last week, a Russian official announced that the BRICS nations are working to develop a “new currency,” yet another sign that dollar dominance is waning.

State Duma (the Russian legislative assembly) deputy chairman Alexander Babakov said the transition to settlements in national currencies is the first step. We’ve already seen this occur with recent oil deals between India and Russia being settled in currencies other than dollars.

The next one is to provide the circulation of digital or any other form of a fundamentally new currency in the nearest future. I think that at the BRICS [leaders’ summit], the readiness to realize this project will be announced, such works are underway.”

That summit is scheduled for August.

Babakov said the BRICS nations are developing a strategy that “does not defend the dollar or euro” and that “a single currency” would likely emerge within BRICS, pegged to gold or “other groups of products, rare-earth elements, or soil.”

Brazil, Russia, India, China, and South Africa make up the BRICS block. It accounts for about 40% of the global population and a quarter of the global GDP.

Last year, Iran officially applied to join BRICS, and according to a report by The Cradle, several nations have expressed interest in joining the bloc, including Saudi Arabia, Algeria, UAE, Egypt, Argentina, Mexico, and Nigeria.

Former Goldman Sachs chief economist Jim O’Neill coined the BRIC acronym. In a recent paper published by Global Policy Journal, he urged the expansion of BRICS.

“The US dollar plays a far too dominant role in global finance,” he wrote. “Whenever the Federal Reserve Board has embarked on periods of monetary tightening, or the opposite, loosening, the consequences on the value of the dollar and the knock-on effects have been dramatic.”

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Iran-Saudi Rapprochement Will Deal A Deathblow To The Dollar


Jacob Lawrence Struggle: From the History of the American People, Panel 8 1954
Eurasia’s geo-economic integration took a great leap forward as a result of the IranianSaudi rapprochement, which unlocks the Gulf Cooperation Council’s (GCC) trade potential with Russia and China. Its wealthy members can now tap into two series of Iranian-transiting megaprojects in one fell swoop through this deal, with the North-South Transport Corridor (NSTC) connecting them to Russia while the China-Central Asia-West Asia Economic Corridor (CCAWAEC) will do the same vis-à-vis China.

The bloc’s de facto Saudi leader has been prioritizing a comprehensive economic reform policy known as “Vision 2030” that was introduced by Crown Prince and first-ever Prime Minister Mohammed Bin Salman (MBS) upon his rise to power in 2015. It regrettably stumbled as a result of the disastrous Yemeni War that he’s been waging since that same year, but everything is now back on track and more promising than ever after securing $50 billion worth of investments from China last December.

The People’s Republic regards Vision 2030 as complementary to its Belt & Road Initiative (BRI) due to MBS’ focus on real-sector investments for preemptively diversifying the Saudi economy away from its presently disproportionate dependence on oil exports. His country’s location at the crossroads of Afro-Eurasia also makes investments there extremely attractive from the perspective of China’s logistical interests, hence its massive commitment to his comprehensive economic reform policy.

Without last week’s Beijing-brokered deal, China would have had to rely on maritime routes under the control of the powerful US Navy to facilitate the forthcoming explosion in bilateral real-sector trade, but now everything can be conducted much more securely via the Iranian-transiting CCAWAEC. Looking forward, there’s also a theoretical possibility of Chinese energy investments in Iran connecting the Gulf to Central Asia and thenceforth to the People’s Republic, thus fully securing its strategic interests.

…click on the above link to read the rest…

The Big Stiff: Russia-Iran dump the dollar and bust US sanctions

The Big Stiff: Russia-Iran dump the dollar and bust US sanctions

News of Russian banks connecting to Iran’s financial messaging system strengthens the resistance against US-imposed sanctions on both countries and accelerates global de-dollarization. 
https://media.thecradle.co/wp-content/uploads/2023/02/Iran-Russia-4.jpg

Photo credit: The Cradle
The agreement between the Central Banks of Russia and Iran formally signed on 29 January connecting their interbank transfer systems is a game-changer in more ways than one.

Technically, from now on 52 Iranian banks already using SEPAM, Iran’s interbank telecom system, are connecting with 106 banks using SPFS, Russia’s equivalent to the western banking messaging system SWIFT.

Less than a week before the deal, State Duma Chairman Vyachslav Volodin was in Tehran overseeing the last-minute details, part of a meeting of the Russia-Iran Inter-Parliamentary Commission on Cooperation: he was adamant both nations should quickly increase trade in their own currencies.

Ruble-rial trade

Confirming that the share of ruble and rial in mutual settlements already exceeds 60 percent, Volodin ratified the success of “joint use of the Mir and Shetab national payment systems.” Not only does this bypass western sanctions, but it is able to “solve issues related to mutually beneficial cooperation, and increasing trade.”

It is quite possible that the ruble will eventually become the main currency in bilateral trade, according to Iran’s ambassador in Moscow, Kazem Jalali: “Now more than 40 percent of trade between our countries is in rubles.”

Jalali also confirmed, crucially, that Tehran is in favor of the ruble as the main currency in all regional integration mechanisms. He was referring particularly to the Russian-led Eurasian Economic Union (EAEU), with which Iran is clinching a free trade deal.

…click on the above link to read the rest…

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Olduvai II: Exodus
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