Iran signs $4bn deal with Russian firms to develop oil fields, minister says

Iran has finalized four agreements worth a total investment of $4 billion with Russian companies to develop seven oil fields, Oil Minister Mohsen Paknejad said.

During his visit to Moscow for the 18th session of the Iran-Russia Joint Economic Commission, Paknejad said on Thursday that the deals form part of broader efforts to expand strategic cooperation across sectors, including energy, finance, and agriculture.

“The potential for trade between Iran and Russia is far greater than the current $5 billion level,” he said, adding that additional memoranda of understanding are under negotiation in the oil and gas sectors. “Expert groups are actively working to finalize these talks and turn them into binding contracts.”

The oil minister also announced plans for a new nuclear power plant to be constructed in the country, financed by a credit line from Moscow.

Paknejad also said that discussions are underway on importing natural gas from Russia in an initial phase, followed by gas swaps and transit to other countries. “This is one of the key areas of interest for both sides,” he said. “We have had detailed negotiations, and only a few items remain before finalizing the first-phase import volumes.”

The minister added that the latest agreements follow the ratification of a long-term strategic cooperation treaty between Tehran and Moscow. “This is the first joint commission meeting since the treaty’s approval last week, and it opens new pathways for economic collaboration,” he said.

Separately, Saeed Tavakkoli, managing director of Iran’s National Gas Company, said progress has been made on an earlier agreement with Russia to transfer gas to northern Iran, where domestic production is limited. “This plan will help meet energy needs in northern provinces and contribute to Iran’s goal of becoming a regional gas hub,” he said.

Tavakkoli added that while further technical assessments are needed, current negotiations have been effective, and the project aligns with the targets of Iran’s seventh development plan.

The agreements come as Western sanction -- isolating Russia over Ukraine and Iran for its nuclear program, regional role, and human rights -- have spurred a rapid deepening of their ties.

Their shared predicament, alongside a common interest in countering US influence, underpins their growing partnership. Both nations are also exploring ways to bypass these restrictions, including using national currencies and alternative financial channels for trade.