Parliament Member: Iran’s Use Of Barter Thwarts US Pressure

Zabihollah Azami-Sardoui, a member of parliament’s agriculture committee, told the Iranian Labour News Agency (ILNA) that Brazil was a suitable match as it needed petrochemical products, especially nitrogen-based fertilizers, and could in return supply corn, soybean meal, and meat.

Iran has expanded barter to circumvent United States ‘maximum pressure’ sanctions, which threaten punitive action against any third party buying Iranian oil or dealing with Iran’s financial sector. Bartering oil for of imports animal feed and agricultural products has proved particularly viable.

Barter can be effective where there is a rough trade balance, but is less practical where trade is imbalanced. Azami-Sardoui said challenges in bartering were being overcome.

Some have criticized the practicalities of such arrangements. "We had not signed clear agreements with China for bartering,” Masoud Daneshmand, a business representative in Tehran, told ILNA in January. “We gave them oil and told them to pay in kind. In such circumstances, they give us all their inferior quality products including the pesticides that have caused so much damage to our agricultural exports.”

Daneshmand also took issue with an agreement to receive tea from Sri Lanka as ‘payment’ for a nearly decade-old $251-million oil debt. At least until US ‘maximum pressure’ sanctions were introduced in 2018, Iranians were among the top ten drinkers of Sri Lanki tea.