Iran's Economy Minister Ehsan Khandouzi announced on July 26 that the US dollar has officially been ditched in his country's trade relations with the Russian Federation.
At a press briefing in Tehran, the minister said the US currency has been replaced with the Russian ruble in Iran-Russia business, adding that similar plans are in the pipeline for trade with such partners as Turkey, China and India.
The Russian currency has dramatically depreciated since late February when President Vladimir Putin ordered an invasion into neighboring Ukraine. The nosedive for Iran's rial has been way sharper, especially after the 2018 US pullout from the Iran nuclear deal.
To ease the pressure, Iran has been contemplating an array of alternatives. The country's Supreme Leader Ayatollah Ali Khamenei has vigorously promoted his "look to the East" vision as a long-term strategy toward economic independence from Western powers by augmenting trade with Russia, China and India.
An internationally isolated Putin was in Tehran last week, sitting down with Ayatollah Khamenei in what appeared to be a cordial conversation between the two. At the meeting, according to Iran's Central Bank governor Ali Salehabadi, the Iranian leader was empathic on the need for the elimination of the American dollar from Iran-Russia trade, and Putin was equally welcoming of the idea, calling for the provisions to be pursued.
During Putin's visit, Iranian media also reported the sealing of a $40 billion deal between Russian energy companies, on top of them the giant Gazprom, and Iran's state-owned National Oil Company. Under the agreement, the Russian firm will invest in developing six gas and oil fields in Iran's energy-rich south.
However, despite the Iranian officials' applause for the "win-win deal," Reformist outlets have cast doubt on whether Gazprom will fulfil its commitments at a time of unprecedented economic uncertainty and a mounting pile of sanctions levied on Russia over its war on Ukraine. They have particularly noted that unlike the Iranian side, the Russian company has not publicly confirmed the $40 billion figure.
Along the same lines, some have referred to the case of the Russian firm Lukoil, which joined other international firms to bid farewell to their projects in Iran in 2018. The exodus was triggered by the US withdrawal from the nuclear deal and fears of American penalties over business with the Islamic Republic.
Against such a background, Iranian critics have thus highlighted the necessity to press Gazprom for robust promises. Iranian authorities have yet to clarify if they have obtained or will seek any guarantees.