Russia has become the largest foreign investor in Iran in the last year, it was reported this morning (Thursday) in the “Financial Times”, from Iranian officials. This, against the background of the heavy sanctions imposed by countries in the West on Iran and Russia, above which the war in Ukraine began. Inside such, Ahsan Khandozithe Iranian Minister of Finance, said that “Russia invested 2.76 billion dollars in Iran during the last year, while opening various projects in the industry and transportation sectors.”

The Iranian finance minister also said, “We define our relations with Russia as strategic, and we work together in many aspects, especially in the economic aspect. China and Russia are two economic partners, and Iran will expand relations with Russia through the implementation of strategic agreements.” This, as mentioned, is against the background of the sanctions that the Western countries have imposed on the countries in the last year.

Russian President Vladimir Putin and Iranian President Ebrahim Raisi (Photo: Office of the Iranian Supreme Leader/WANA)

In recent times, many delegations from Russia have been present in Iran, looking for deals designed to circumvent the sanctions. According to sources familiar with the details, Iran was eager to develop new trade relations, in order to strengthen the economy following the severe sanctions. Also, Russia was responsible for two-thirds of the total foreign investments in Iran, according to data from the Ministry of Finance in Tehran. Raisi’s delegation prioritized the development of regional trade relations, since he took office in 2021. As a result, the Iranian Finance Minister emphasized that Iran managed to increase oil exports last month, for the first time in two years, to reach 1.3 million barrels per day, despite the American sanctions.

At the same time, the central banks in Iran and Russia signed an agreement to link interbank communication systems, in order to increase trade between the countries. The Iranian Finance Minister said that “Russia and other countries are interested in using mechanisms such as mutual financial agreements. We have negotiated, not only with Russia, but also with China and other partners such as Turkey.”

However, the government in Iran is still struggling to contain the economic weakness that has gripped the Islamic Republic, with inflation soaring to more than 47%. Economists in Iran blame the authorities for the “excessive” printing of money. Despite the claims of the economists, Khandozi defended the government, saying that it plans to reform the central bank, which will stop the rampant inflation.

As you may remember, during the war in Ukraine, it was widely reported that Russia was purchasing Iranian drones. The Wall Street Journal even reported that the two countries are advancing plans to establish a new factory for the production of drones on Russian soil. According to the report, this is a factory that will be able to produce at least 6,000 Iranian-designed drones. According to the sources cited in the American media, a high-level Iranian delegation landed in Russia in early January to visit the site where the factory is planned to be built, in order to finalize the final details before the project is implemented.

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