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.


Moroccan activist jailed for criticism of earthquake response

Updated 9 sec ago
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Moroccan activist jailed for criticism of earthquake response

  • El Haouz province, to the south of Marrakech, was one of the areas hit hardest by the 6.8 magnitude earthquake that struck the region in September 2023, killing close to 3,000 people and wounding 5,600

RABAT: A Moroccan activist who criticized the kingdom’s response to a major 2023 earthquake was jailed for three months on Monday for defamation, according to his defense team.
Said Ait Mahdi, who leads a group for victims of the El Haouz earthquake and has been in detention since December 23, was tried for “defamation, insult and the publication of false allegations aimed at infringing on privacy.”
Three other accused, also members of the group, were charged with “insulting public officials.”
“The Court of First Instance of Marrakech condemned Said Ait Mahdi to three months in prison and acquitted three others,” one of their lawyers, Mohamed Nouini, told AFP.
Ait Mahdi was also ordered to pay 10,000 dirhams ($1,000) in damages to each of the civil parties, Nouini said, adding that he would appeal the verdict.
According to the lawyer, the case was based on “complaints from local officials following social media posts they considered offensive.”
El Haouz province, to the south of Marrakech, was one of the areas hit hardest by the 6.8 magnitude earthquake that struck the region in September 2023, killing close to 3,000 people and wounding 5,600.
It also destroyed around 60,000 homes in the High Atlas mountains, forcing many families to live in tents through the winter.
Ait Mahdi’s group has campaigned for faster reconstruction and more aid to those affected.
The Moroccan authorities said in December they had issued 57,000 reconstruction permits and that more than 35,000 homes had been or were in the process of being rebuilt.
The authorities have put in place an $11 billion, five-year reconstruction and development plan for the six provinces hit by the disaster.


Israel’s ambassador to UN calls on Security Council to thwart Hezbollah attempts to rearm

Updated 4 min 25 sec ago
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Israel’s ambassador to UN calls on Security Council to thwart Hezbollah attempts to rearm

  • Israeli authorities say continuing extensive presence of Hezbollah weaponry in southern Lebanon could cause them to ‘reconsider’ 60-day timeline for withdrawal of forces
  • Israel has violated November ceasefire agreement hundreds of times, killed 33 civilians, blocked citizens from returning home, continues to demolish houses and infrastructure

NEW YORK CITY: Israel’s permanent representative to the UN on Monday expressed concern about what he described as Hezbollah’s ongoing military build-up, accusing the group of attempting to rearm with Iranian assistance.

Danny Danon called on the Lebanese government and the international community to curb “the smuggling of weapons, ammunition and financial support through the Syria-Lebanon border and via air and sea routes.”

The ceasefire deal agreed by Israel and Lebanon in November mandates a 60-day halt to hostilities, during which time Israel must withdraw its forces from southern Lebanon, and Hezbollah must withdraw its forces to positions north of the Litani River.

In an urgent letter to Algeria’s ambassador to the UN, Amar Bendjama, who holds the rotating presidency of the Security Council this month, Danon said that Israel has detected several attempts to transfer weapons and cash to Hezbollah since the agreement was signed.

“We have witnessed hundreds of violations, including 168 prominent violations,” he wrote in his letter, a copy of which Arab News has seen.

“These violations include: attempts by Hezbollah to rebuild its military infrastructure; presence of Hezbollah activists south of the Litani; attempts to smuggle weapons into Lebanon; attempts to transfer funds intended for Hezbollah; presence of Hezbollah arms north of the Litani.”

The Lebanese Armed Forces have handled some of these complaints, Danon added, but in many instances “Israel had to take action by itself in order to thwart them.”

Hezbollah has halted its rocket attacks against Israel, and Israeli forces have stopped the continual bombing of Beirut suburbs, the eastern Bekaa Valley, and southern Lebanon.

However, both sides accused the other of breaching the ceasefire agreement. Israeli forces remain in the south, where they continue to destroy homes and infrastructure. They have also fired on Lebanese citizens, killed at least 33 Lebanese residents in the past month, and prevented people from returning to their homes.

Under the terms of the agreement, Israel is obliged to withdraw its troops from southern Lebanon within 60 days of Nov. 27. They will initially be replaced by troops from UN Interim Force in Lebanon, followed by Lebanese army forces.

But Israeli authorities have warned that the continued extensive presence of Hezbollah weaponry in the south, and the group’s efforts to rebuild, could cause them to “reconsider” their planned timeline for withdrawal from the country.

Danon welcomed the “encouraging” steps taken by the Lebanese army to dismantle some of Hezbollah’s military infrastructure south of the Litani. But he lamented what he described as the slow pace of the efforts and the lack of capacity to effectively address “the full scope of violations,” in light of the “vast military arsenal found on the ground, that has been erected during the years.”

He warned: “Israel will not tolerate any violation of the ceasefire understandings.

“The existence of terrorist infrastructure in southern Lebanon that continues to threaten Israeli citizens is unacceptable.”

He called on the UN’s peacekeeping force to work “in a much more robust and effective way” to implement Security Council Resolution 1701 and the recent ceasefire understandings. Resolution 1701 was adopted by the council in 2006 with the aim of resolving the conflict that year between Israel and Hezbollah. It calls for an end to hostilities, the withdrawal of Israeli forces from Lebanon, the withdrawal of Hezbollah and other forces from parts of the country south of the Litani River, and the disarmament of Hezbollah and other armed groups.

Danon accused UNIFIL of interpreting its mandate “leniently” and of opting not to take “all necessary action to ensure that its area of operations is not utilized for hostile activities of any kind.”

He continued: “As a result, UNIFIL allowed the severe restriction of its freedom of movement, which Hezbollah exploited to systematically establish terrorist infrastructure on private property.

“We are concerned that lessons have not been learned, and that today we are witnessing yet another refusal by the force to adapt to Hezbollah’s changing modus operandi.”

Dannon urged the Security Council to monitor and expedite the Lebanese army’s actions on the ground throughout Lebanon, and to insist that “all the terrorist infrastructure present in Lebanon is removed and to make sure that any attempt to smuggle arms to Hezbollah is thwarted.”


Palestinians dedicate a new West Bank olive grove to former US President Jimmy Carter

Updated 13 January 2025
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Palestinians dedicate a new West Bank olive grove to former US President Jimmy Carter

  • The "Freedom Farm" would be fenced in to protect it from wildlife or extremist Jewish settlers
  • Jimmy Carter was highly critical of Israel’s military rule over the Palestinians

TULKAREM: Palestinian activists and residents planted a grove of 250 olive trees in a northern West Bank town on Monday in memory of the late US President Jimmy Carter, describing him as a staunch supporter of the Palestinian cause.
The former president’s legacy is “rooted” among Palestinians and across the globe, said Abbas Melhem, executive manager of the Palestinian Farmers Union. Carter was one of the few world leaders who “stood firmly supporting the struggle of the Palestinians for independence and for freedom,” he said.
Under clear winter skies, Palestinian kids helped a handful of adults place the trees into newly dug holes. Melhem said the 10-dunam (2.5-acre) grove in the city of Tulkarem, titled “Freedom Farm,” would be fenced in to protect it from wildlife or extremist Jewish settlers, who have attacked Palestinian olive trees in the past.
The advocacy group for farmers in the West Bank launched the project in collaboration with US-based nonprofit Treedom for Palestine, which plants trees to empower Palestinian farmers.
Carter, who died last month at the age of 100, brokered the Camp David peace accords between Israel and Egypt in 1978.
In his later years, Carter was highly critical of Israel’s military rule over the Palestinians, saying conditions in the occupied West Bank amounted to apartheid. Israel captured the West Bank in the 1967 Mideast war, and the Palestinians want it to form the main part of their future state.
“I think planting olive trees that live at least 100 years old like him is a very suitable way to honor his life and his legacy,” said George Zeidan, the Carter Center’s Director in Israel and Palestine.


Israel airstrikes kill family of 5 in Gaza Strip

Updated 13 January 2025
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Israel airstrikes kill family of 5 in Gaza Strip

  • Hamas said on Monday that talks over some core issues for a ceasefire deal in Gaza have made progress, an official in the Palestinian group said

CAIRO: At least 14 Palestinians, including a family of five people, were killed in three separate Israeli airstrikes on Monday in northern Gaza Strip, Palestinian medics said.
One strike hit a group of people in the Daraj neighborhood in Gaza City, killing at least seven people including two children, the Health Ministry’s emergency service said. Two more people were killed in Jabaliya Al-Balad area in northern Gaza, it said.
Another five people were wounded in the strike, it said.
A third strike hit Salaheddin school, which shelters displaced families in the western part of Gaza City.
The strike killed two parents and their three children, according to the Al-Ahly Hospital which received the casualties.
The Israeli military did not have an immediate comment on the strikes.
Hamas said on Monday that talks over some core issues for a ceasefire deal in Gaza have made progress, an official in the Palestinian group said.
“The negotiation over some core issues made progress and we are working to conclude what remains soon,” added the official.
The administration of President Joe Biden sees a possible truce as soon as this week, White House national security adviser Jake Sullivan told Bloomberg News on Monday, adding that there were no guarantees that the parties would agree to such a deal.
Sullivan, speaking to Bloomberg in an interview, added that Biden’s administration has been in contact with incoming President Donald Trump’s team and sought a united front on the issue ahead of Washington’s Jan. 20 transition of power.
“The pressure building here toward the end of President Biden’s term has been considerable,” Sullivan said. “It’s there for the taking.”
Biden leaves office next week after Democrats lost the White House in November’s election, handing back the US government to Trump and his fellow Republicans, who will control both chambers of Congress.
Envoys of both Biden and Trump attended weekend talks on the potential deal.
“The question is now: Can we all collectively seize the moment and make this happen,” Sullivan told Bloomberg, adding that Biden had directed him to work closely with the incoming team.

 


Israel army says intercepted projectile launched from Yemen

Updated 13 January 2025
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Israel army says intercepted projectile launched from Yemen

  • Israeli military also intercepted a drone launched from Yemen on Monday

JERUSALEM: The Israeli military said it intercepted a projectile fired from Yemen on Monday before it crossed into Israeli territory, in the latest in a series of ongoing attacks.
“One projectile launched from Yemen was intercepted by the IAF (Israeli air force) prior to crossing into Israeli territory,” the military said in a statement.
Earlier on Monday the military said it had also intercepted a drone in southern Israel that was launched from Yemen.
Since the war in the Gaza Strip broke out in October 2023, the Iran-backed Houthi militants who control swathes of Yemen have repeatedly fired missiles and drones at Israel in what they say is a show of solidarity with the Palestinians.
In retaliation, Israel has struck Houthi targets several times inside Yemen, including in the Houthi-controlled capital Sanaa.