Iran-Russia Oil & Caspian Trade Flows

Executive Summary

Iran and Russia — the two most heavily sanctioned major oil producers on earth — have spent the 2022–2025 window converting a transactional relationship into a structural one. The pivot is anchored by a 20-year Comprehensive Strategic Partnership Treaty signed in Moscow on 17 January 2025 by Presidents Putin and Pezeshkian, which explicitly covers energy cooperation and settlement in national currencies. REPORTED

The energy dimension is asymmetric and counter-intuitive. Russia, a top-three global oil producer, is positioning to supply gas to Iran — a state sitting on the world's second-largest gas reserves — because Iran's northern provinces are stranded from its southern South Pars fields. The flagship is a Gazprom–NIGC memorandum signed 26 June 2024 for pipeline gas. President Putin has framed deliveries as starting small — up to 2 bcm/year — with a long-term ceiling of 55 bcm/year via a route through Azerbaijan. Oil itself moves less as direct Russia-to-Iran sale than as swap arrangements and as parallel export streams whose tanker logistics, insurance laundering, and payment rails increasingly overlap. REPORTED

This brief is a trade-flow companion to our infrastructure-focused INSTC Caspian Corridor brief. Here the question is not how the rails and ports are built, but what commodity and money actually moves over them, who is sanctioned along the chain, and how an analyst sees it in open sources.

The Strategic Frame: Two Sanctioned Producers, One Workaround Economy

The defining feature of Iran-Russia energy trade is that both parties are price-takers locked out of Western banking, insurance, and shipping. That shared exclusion is the relationship's logic: each becomes the other's testbed for circumvention infrastructure that a single sanctioned state could not sustain alone.

The treaty layer matured rapidly. The 17 January 2025 strategic treaty covers, in its own terms, "politics, security, trade, transport and energy" — though notably without mutual-defence provisions. It sits atop Iran's deepening integration with the Eurasian Economic Union (EAEU), where Iran was designated an observer member at a leaders' meeting in St. Petersburg on 26 December 2024. Underpinning all of it is a financial pivot: by 2024, Russian and Iranian officials reported that national currencies covered more than 96% of mutual settlements. The combined effect is a rules-based shell around a trade that Western sanctions are designed to choke. REPORTED

Oil and Gas: The Swap Logic

Why Russia sells gas to a gas superpower

Iran holds the world's second-largest proven natural gas reserves, yet faces acute winter shortages in its populous, industrial north because its giant South Pars production sits at the opposite end of the country with constrained internal transmission. Russia's proposal — deliver gas to northern Iran via Azerbaijan, freeing Iranian southern gas for export to Iraq, Turkey, and Pakistan or for domestic use — is a classic geographic swap. The 26 June 2024 Gazprom–NIGC memorandum is the vehicle. This builds on a much larger $40 billion NIOC–Gazprom MoU signed in July 2022 covering field development and gas/product swaps. Putin has publicly anchored the start at up to 2 bcm/year scaling toward 55 bcm/year — figures that remain political ceilings, not metered flows. HIGH

The Caspian as a Trade-Flow Black Box

The Caspian Sea is the single most important and least transparent leg of Iran-Russia commodity movement. It is a landlocked basin ringed by five states, with no Western naval presence, limited public AIS coverage, and small specialised tanker and bulk fleets. For the infrastructure picture — ports, the Rasht-Astara rail gap, and corridor financing — see our dedicated INSTC brief; here we focus on what crosses the water.

The Caspian branch of the International North-South Transport Corridor links Russian ports (Astrakhan, Makhachkala) to Iranian Caspian ports (Bandar-e Anzali, Amirabad), feeding onward to Bandar Abbas on the Persian Gulf. The corridor spans roughly 7,200 km from Moscow toward Mumbai and is assessed to be around 30% cheaper and 40% shorter than the Suez route. In June 2024, officials inaugurated the 37-km Rasht–Caspian railway connecting Rasht to the Anzali free zone — a key step toward direct Caspian-to-Gulf freight. Total INSTC cargo reportedly rose roughly 19% in 2024 to about 26.9 million tonnes, with the eastern branch tripling to an estimated 1.8–2 million tonnes. REPORTED

Sanctioned Operators on Both Sides of the Trade

What distinguishes this trade from a normal bilateral relationship is that the counterparties, fleets, and intermediaries are themselves sanctions targets. Iran's oil-export apparatus (NIOC and a rotating cast of front companies) and Russia's export apparatus (including state major Sovcomflot) both rely on the same playbook of opaque ownership, flag-hopping, and insurance laundering documented in our shadow-fleet brief and the Sovcomflot network analysis.

On the Russia side, the EU progressively listed hundreds of shadow-fleet tankers across its 2024–2025 sanctions packages, denying them port access and Western maritime services. On the Iran side, US "maximum pressure" measures escalated sharply: in July 2025, OFAC designated 50+ individuals and entities and identified 50+ vessels tied to the network of Iranian businessman Mohammad Hossein Shamkhani — the largest Iran-related action since 2018. Critically, OFAC linked 33 of those vessels to Russia compliance risk, stating the network both purchased Russian oil for resale and operated a fleet of roughly 25 Russia-trading tankers. This is the clearest public confirmation that the Iranian and Russian export apparatuses now share fleets, intermediaries, and front companies, not merely techniques. CRITICAL

Payment Workarounds: Settling Outside the Dollar

Because both states are walled off from SWIFT and dollar clearing, payment is as engineered as the logistics. By 2024, national currencies covered over 96% of mutual settlements. The plumbing: Russia's SPFS messaging system was linked to Iran's SEPAM service in February 2023, reportedly connecting around 700 Russian banks to Iranian counterparts; and a Mir–Shetab card interlink entered its first phase in late 2024, letting Iranian Shetab cardholders draw rubles from Russian ATMs. REPORTED

What the Trade Numbers Show

Reported bilateral trade between Iran and Russia reached roughly $4–4.8 billion in 2024 depending on the source — Iran's ambassador cited above $4 billion, while some trade databases reported closer to $3.9 billion — up around 12% year-on-year. Notably, agricultural and food products dominate Iran's exports to Russia by both weight and value, underscoring that the headline "energy" relationship does not yet show up as large crude flows in conventional statistics. These figures should be read as directional and politically inflected: official targets, customs mirror data, and corridor throughput projections frequently diverge, and energy swaps by design do not appear cleanly in crude-export numbers.

OSINT Tradecraft: How Analysts Track an Opaque Trade

Because the financial layer is dark and the maritime layer is deliberately obscured, tracking Iran-Russia trade is a discipline of cross-corroboration — no single source is decisive, but convergence across independent layers raises confidence. Our methodology page details the scoring; the practical workflow is below.

For organisations that must screen counterparties against this trade, our sanctions-compliance service maps exposure across OFAC, EU, and OFSI lists, and our vessel-tracking evasion brief details the AIS and imagery techniques that flag a suspect voyage.

Outlook

The trajectory is toward institutional permanence. With a 20-year treaty, an EAEU free-trade umbrella, interlinked payment rails, and a corridor backed by Russian state credit, Iran-Russia trade is being hard-wired to survive sanctions rather than to wait them out. The constraints are physical and commercial, not political: the Rasht-Astara link is unfinished, Caspian fleet capacity is thin, and Iranian crude remains structurally pointed at China, not Moscow. Expect gas swaps and goods trade to outpace any direct oil-for-oil exchange, and expect the evasion toolkit shared between the two fleets to keep converging.

Frequently Asked Questions

Sources

1. U.S. Department of the Treasury, OFAC press release, July 2025 (Shamkhani network designations) — "Treasury Tightens Sanctions on Iran's Oil Network" (50+ vessels, Russia links). ofac.treasury.gov
2. U.S. Department of the Treasury / OFAC — Recent Actions (Iran & Russia oil-network designations). ofac.treasury.gov
3. Offshore Technology — "Iran's NIOC, Russia's Gazprom sign $40bn oil and gas deal" (July 2022 MoU scope). offshore-technology.com
4. TASS — "Russia can start gas supplies to Iran with small volumes of up to 2 bcm a year — Putin" (2 vs 55 bcm). tass.com
5. Caspian News — "Iran, Russia Inaugurate Rasht-Caspian Railway" (37-km link, June 2024). caspiannews.com
6. bne IntelliNews — "Russia, Iran trade in national currencies reaches 96% of mutual settlements." intellinews.com
7. Valdai Club — "The Linkage between Russia's Mir and Iran's Shetab Payment Systems." valdaiclub.com
8. Wikipedia — Iran–Russia relations (treaty 17 Jan 2025, SPFS–SEPAM, EAEU observer status). en.wikipedia.org
9. Wikipedia — International North–South Transport Corridor (7,200 km, Suez comparison, route). en.wikipedia.org
10. Wikipedia — Petroleum industry in Iran (EIA crude/condensate export figures, China destination). en.wikipedia.org
11. OpenSanctions — Maritime and consolidated sanctions datasets (Iran/Russia vessels, entities). opensanctions.org
12. Council of the EU — Sanctions against Russia, including shadow-fleet vessel listings. consilium.europa.eu