Exclusive: US, Iran plan ‘oil for goods’ deal to ease sanctions

US Secretary of State Mike Pompeo visited Iraq in May amid increasing tensions between Washington and Tehran. (AP)
Updated 07 June 2019
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Exclusive: US, Iran plan ‘oil for goods’ deal to ease sanctions

  • Alleged deal to be similar to UN oil-for-food program, US sources deny

BAGHDAD: Iranian and US officials may have reached an initial agreement to smooth the US-imposed sanctions on Iran by allowing Iran to sell hundreds of thousands barrel of oil per day in exchange for certain goods, Iraqi sources told Arab News. 

The unconfirmed deal suggests that export and import operations will be through Iraq, officials in Baghdad familiar with the talks say. 

Iran has been suffering a “suffocated” conditions since US withdraw from the nuclear deal and imposed economic sanctions on Iran. The tension between the two sides is at peak as US threaten to militarily respond if Iran targeted any of the US interests in the Middle East.

The alleged deal which may have been reached between the US and Iranian officials, would have been made in Baghdad in cooperation with the Iraqi side, however several US government sources that Arab News spoke to have denied that such a deal exists between Iran and the US. 

However, according to one senior Iraqi official familiar with what he described as ‘ongoing talks’, the deal could be considered “a good-will gesture offered by the Americans to calm the escalation between the two countries, but it is still in its preliminary stages. 

“The involved parties have agreed on the general lines which state allowing Iran to export a specific amount of oil and getting specific goods in return.
“Iraq will be the transit area for both importing the goods and exporting the oil,” he added. 

Iran has been controlling dozens armed factions operating in Iraq, Syria, Lebanon and Yemen. The activities of these groups have been representing a serious threat to the US and its’ allies in the region.

US-imposed economic sanctions on Iran aim to halt its nuclear program and prevent it from funding and equipping these factions.

“The main goal that the Americans are looking to achieve it is preventing the Iranians from getting any cash money,” a second Iraqi official familiar with the talks told Arab News in condition of anonymity.

“The deal will allow the Americans to monitor and control everything, the amount of the exported Iranian crude oil, the kinds of the imported goods and being sure that no cash will be paid back.
“This will paralyze the Iranians and force them to abandon the armed factions they fund and will keep them busy dealing with the internal Iranian situation,”.

The “initial” deal which has been concluded by Bijan Zanganeh, the Iranian Minister of Oil who was in un announced visit to Iraq lasted for few days, has not became final yet as the three sides have not agreed on the details including the amount of oil, the kind of goods and the key buyer of the Iranian oil, Iraqi officials told Arab News.
The suggested amount of oil which supposed to allow Iran to export a certain amount of barrels per day but “this point still under discussions” two officials at least told Arab News. Also the key buyer in this deal “still one of the disagreement points between the Iranians and Americans”.

“Iranians have suggested one of the European countries as a key buyer but the Americans have refused,” one of the sources who is familiar with the talks told Arab News.

“The confirmed thing so far in this deal is, that Iraq will be the transit area for the exchange operations (import and export), so US can closely monitor the commitment of the Iranians,”.

Oil for goods

The alleged agreement, which is still in its early stages of negotiations, is inspired by the oil-for-food program implemented in Iraq in 1995 by a Security Council resolution to ease the impact of the economic embargo imposed on Iraq following the invasion of Kuwait in the early 1990s. The oil-for-food program allowed Iraq to export a quantity of its oil in return for securing the humanitarian needs of the Iraqi people under the supervision of the United Nations.

“The targeted shape of the suggested deal is almost a copy of the oil – for – food program which used to apply in Iraq in 1990s, but Iraq will replace the UN as the supervisor of procurement and receipt and disbursement of funds received,” a prominent Shiite leader and a member of the Oil and Power parliamentary committee familiar with the talks told Arab News.
“The proposal is to open a bank account in the Iraqi Central Bank in favor of Iran to deposit the money obtained from the sale of Iranian oil and then Iraq to pay bills of Iranian purchases later using this money.

“This mechanism will enable the Americans to follow the dollar closely and monitor Iran's disbursements,”.

Iraq has been importing 1100 MW of electricity per day from Iran since years, in addition to 28 million cubic meters of gas oil which secure another 4,000 MW.

Iran stopped supplying Iraq with electricity and gas oil last summer because of the inability of Iraq to pay its dues as a result of US financial sanctions imposed on Iran. The resulted serious shortage of electricity led to the outbreak of angry and violent demonstrations in the Shiite-dominated provinces in southern Iraq. At least 17 people including a number of security forces were killed and many government and party offices, including the Iranian consulate were burned.

A prominent Shiite leader familiar with the deal told Arab News that the negotiations started less than a month ago in Baghdad and the deal included maintaining all the contracts that Iran was signed before imposing the sanctions with European, Chines and Asian  companies to supply medical substances and spare  parts fo the oil and industry and Iraq will financially cover these contracts from the deposit money in the suggested bank account
To bypass US sanctions and ensure they are not breached, the Iraqi government last year has opened a bank account at the Central Bank of Iraq on behalf of Iran to deposit the money owed by Iraq and then use it to pay Iranian purchase bills to other countries, Iraqi officials said.
“The proposed opening of the bank account, the receipt of the sold oil money and the payment of the invoices of Iran’s purchases, among the points agreed upon,” another member of the oil and power parliamentary committee, said.


Israel records 160 launches fom Lebanon as Hezbollah targets Tel Aviv, south

Israeli security forces and people inspect a damaged house at a site hit by rockets fired from Lebanon in Rinatya village.
Updated 7 sec ago
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Israel records 160 launches fom Lebanon as Hezbollah targets Tel Aviv, south

  • Medical agencies reported that at least 11 people were wounded, including a man in a “moderate to serious” condition

JERUSALEM: Israel’s army said Hezbollah fired around 160 projectiles into its territory from Lebanon on Sunday, with the group saying its attacks had targeted the Tel Aviv area and Israel’s south.
The Iran-backed group said in a statement that it had “launched, for the first time, an aerial attack using a swarm of attack drones on the Ashdod naval base” in southern Israel.
Later, it said it fired “a barrage of advanced missiles and a swarm of attack drones” at a “military target” in Tel Aviv, and had also launched a volley of missiles at the Glilot army intelligence base in the city’s suburbs.
The Israeli military did not comment on the specific attack claims when contacted by AFP.
But it said earlier that air raid sirens had sounded in several locations in central and northern Israel, including in the greater Tel Aviv suburbs.
It later reported that “approximately 160 projectiles that were fired by the Hezbollah terrorist organization have crossed from Lebanon into Israel.”
Some of the projectiles were shot down.
Medical agencies reported that at least 11 people were wounded, including a man in a “moderate to serious” condition.
AFP images from Petah Tikva, near Tel Aviv, showed several damaged and burned-out cars, and a house pockmarked by shrapnel.
The wave of projectiles follows at least four deadly Israeli strikes in central Beirut in the past week, including one that killed Hezbollah spokesman Mohammed Afif.
In a speech on Wednesday, Hezbollah chief Naim Qassem had said the response to the recent strikes on the capital “must be expected on central Tel Aviv.”
The Lebanese army, meanwhile, said that a soldier was killed on Sunday and 18 others injured, “including some with severe wounds, as a result of an Israeli attack targeting a Lebanese army center in Amriyeh.”
Though the Lebanese army is not a party to the war between Israel and Hezbollah, Israeli strikes have killed 19 Lebanese soldiers in the last two months, authorities have said.
Since September 23, Israel has intensified its Lebanon air campaign, later sending in ground troops after nearly a year of limited exchanges of fire initiated by Hezbollah in support of its ally Hamas after the Palestinian group’s October 7, 2023 attack, which sparked the Gaza war.
Lebanon’s health ministry says at least 3,670 people have been killed in the country since October 2023, most of them since September this year.


Israeli strike on Lebanese army center kills soldier, wounds 18 others

Updated 24 November 2024
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Israeli strike on Lebanese army center kills soldier, wounds 18 others

  • It was the latest in a series of Israeli strikes that have killed over 40 Lebanese troops
  • Lebanon’s caretaker prime minister condemned it as an assault on US-led ceasefire efforts

BEIRUT: An Israeli strike on a Lebanese army center on Sunday killed one soldier and wounded 18 others, the Lebanese military said.

It was the latest in a series of Israeli strikes that have killed over 40 Lebanese troops, even as the military has largely kept to the sidelines in the war between Israel and Hezbollah militants.

There was no immediate comment from the Israeli military, which has said previous strikes on Lebanese troops were accidental and that they are not a target of its campaign against Hezbollah.

Lebanon’s caretaker prime minister, Najib Mikati, condemned it as an assault on US-led ceasefire efforts, calling it a “direct, bloody message rejecting all efforts and ongoing contacts” to end the war.

“(Israel is) again writing in Lebanese blood a brazen rejection of the solution that is being discussed,” a statement from his office read.

The strike occurred in southwestern Lebanon on the coastal road between Tyre and Naqoura, where there has been heavy fighting between Israel and Hezbollah.

Hezbollah began firing rockets, missiles and drones into Israel after Hamas’ Oct. 7, 2023, attack out of the Gaza Strip ignited the war there. Hezbollah has portrayed the attacks as an act of solidarity with the Palestinians and Hamas. Iran supports both armed groups.

Israel has launched retaliatory airstrikes since the rocket fire began, and in September the low-level conflict erupted into all-out war, as Israel launched waves of airstrikes across large parts of Lebanon and killed Hezbollah’s top leader, Hassan Nasrallah, and several of his top commanders.

Israeli airstrikes early Saturday pounded central Beirut, killing at least 20 people and wounding 66, according to Lebanon’s Health Ministry. Hezbollah has continued to fire regular barrages into Israel, forcing people to race for shelters and occasionally killing or wounding them.

Israeli attacks have killed more than 3,500 people in Lebanon, according to Lebanon’s Health Ministry. The fighting has displaced about 1.2 million people, or a quarter of Lebanon’s population.

On the Israeli side, about 90 soldiers and nearly 50 civilians have been killed by bombardments in northern Israel and in battle following Israel’s ground invasion in early October. Around 60,000 Israelis have been displaced from the country’s north.

The Biden administration has spent months trying to broker a ceasefire, and US envoy Amos Hochstein was back in the region last week.

The emerging agreement would pave the way for the withdrawal of Hezbollah militants and Israeli troops from southern Lebanon below the Litani River in accordance with the UN Security Council resolution that ended the 2006 war. Lebanese troops would patrol the area, with the presence of UN peacekeepers.

Lebanon’s army reflects the religious diversity of the country and is respected as a national institution, but it does not have the military capability to impose its will on Hezbollah or resist Israel’s invasion.


EU’s Borrell urges pressure on Israel, Hezbollah to accept US ceasefire proposal

Updated 24 November 2024
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EU’s Borrell urges pressure on Israel, Hezbollah to accept US ceasefire proposal

  • The EU’s foreign policy chief warned that Lebanon was “on the brink of collapse”

BEIRUT: The European Union’s foreign policy chief called on Sunday during a visit to Beirut for pressure to be exerted on both the Israeli government and on Lebanon’s Hezbollah to accept a US ceasefire proposal.
Speaking at a news conference in Beirut, Josep Borell also urged Lebanese leaders to pick a president to end a two-year power vacuum in the country, and he pledged 200 million euros in support for Lebanon’s armed forces. 

Lebanon on 'brink of collapse'

The EU’s foreign policy chief warned that Lebanon was “on the brink of collapse” after Israel launched an intense air campaign two months ago following nearly a year of clashes with Hezbollah.
“Back in September I came and was still hoping we could prevent a full-fledged war of Israel attacking Lebanon. Two months later Lebanon is on the brink of collapse,” Josep Borrell told reporters in Beirut.


Israeli army orders Gaza City suburb evacuated, spurring new displacement wave

Updated 24 November 2024
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Israeli army orders Gaza City suburb evacuated, spurring new displacement wave

  • Israeli military blames Hamas rocket fire for renewed evacuation directive
  • Palestinians say hospitals in north Gaza barely functioning

CAIRO: The Israeli military issued new evacuation orders to residents in areas of an eastern Gaza City suburb, setting off a new wave of displacement on Sunday, and a Gaza hospital director was injured in an Israeli drone attack, Palestinian medics said.
The new orders for the Shejaia suburb posted by the Israeli army spokesperson on X on Saturday night were blamed on Palestinian militants firing rockets from that heavily built-up district in the north of the Gaza Strip.
“For your safety, you must evacuate immediately to the south,” the military’s post said. The rocket volley on Saturday was claimed by Hamas’ armed wing, which said it had targeted an Israeli army base over the border.
Footage circulated on social and Palestinian media, which Reuters could not immediately verify, showed residents leaving Shejaia on donkey carts and rickshaws, with others, including children carrying backpacks, walking.
Families living in the targeted areas began fleeing their homes after nightfall on Saturday and into Sunday’s early hours, residents and Palestinian media said — the latest in multiple waves of displacement since the war began 13 months ago.
In central Gaza, health officials said at least 10 Palestinians were killed in Israeli airstrikes on the urban camps of Al-Maghazi and Al-Bureij since Saturday night.
Hospital director wounded by gunfire
In north Gaza, where Israeli forces have been operating against regrouping Hamas militants since early last month, health officials said an Israeli drone dropped bombs on Kamal Adwan Hospital, injuring its director Hussam Abu Safiya.
“This will not stop us from completing our humanitarian mission and we will continue to do this job at any cost,” Abu Safiya said in a video statement circulated by the health ministry on Sunday.
“We are being targeted daily. They targeted me a while ago but this will not deter us...,” he said from his hospital bed.
Israeli forces say armed militants use civilian buildings including housing blocks, hospitals and schools for operational cover. Hamas denies this, accusing Israeli forces of indiscriminately targeting populated areas.
Kamal Adwan is one of three hospitals in north Gaza that are barely operational as the health ministry said the Israeli forces have detained and expelled medical staff and prevented emergency medical, food and fuel supplies from reaching them.
In the past few weeks, Israel said it had facilitated the delivery of medical and fuel supplies and the transfer of patients from north Gaza hospitals in collaboration with international agencies such as the World Health Organization.
Residents in three embattled north Gaza towns — Jabalia, Beit Lahiya and Beit Hanoun — said Israeli forces had blown up hundreds of houses since renewing operations in an area that Israel said months ago had been cleared of militants.
Palestinians say Israel appears determined to depopulate the area permanently to create a buffer zone along the northern edge of Gaza, an accusation Israel denies.
Israel’s campaign in Gaza has killed more than 44,000 people, uprooted nearly all the enclave’s 2.3 million population at least once, according to Gaza officials, while reducing wide swathes of the narrow coastal territory to rubble.
The war erupted in response to a cross-border attack by Hamas-led militants on Oct. 7, 2023 in which gunmen killed around 1,200 people and took more than 250 hostages back to Gaza, according to Israeli tallies.


Iran to hold nuclear talks with three European powers in Geneva on Friday, Kyodo reports

Updated 24 November 2024
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Iran to hold nuclear talks with three European powers in Geneva on Friday, Kyodo reports

  • A senior Iranian official confirmed that the meeting would go ahead next Friday

DUBAI: Iran plans to hold talks about its disputed nuclear program with three European powers on Nov. 29 in Geneva, Japan’s Kyodo news agency reported on Sunday, days after the UN atomic watchdog passed a resolution against Tehran.
Iran reacted to the resolution, which was proposed by Britain, France, Germany and the United States, with what government officials called various measures such as activating numerous new and advanced centrifuges, machines that enrich uranium.
Kyodo said Iranian President Masoud Pezeshkian’s government was seeking a solution to the nuclear impasse ahead of the inauguration in January of US President-elect Donald Trump.
A senior Iranian official confirmed that the meeting would go ahead next Friday, adding that “Tehran has always believed that the nuclear issue should be resolved through diplomacy. Iran has never left the talks.”
In 2018, the then-Trump administration exited Iran’s 2015 nuclear pact with six major powers and reimposed harsh sanctions on Iran, prompting Tehran to violate the pact’s nuclear limits, with moves such as rebuilding stockpiles of enriched uranium, refining it to higher fissile purity and installing advanced centrifuges to speed up output.
Indirect talks between President Joe Biden’s administration and Tehran to try to revive the pact have failed, but Trump said in his election campaign in September that “We have to make a deal, because the consequences are impossible. We have to make a deal.”