Moscow and Tehran are expanding economic cooperation, with Russia planning multi-billion dollar investments in Iran's energy sector. The move comes as major Western firms are pulling out of Iran amid the threat of US sanctions.

“Russia is ready to invest $50 billion in Irans oil and gas sectors,” Senior Adviser for International Affairs of the Supreme Leader of the Islamic Republic Ali Akbar Velayati was cited as saying by the Financial Times.

Velayati met with Russian President Vladimir Putin last week in Moscow. The sides focused on Russian-Iranian cooperation as well as the situation in the region. According to the Kremlin, they reaffirmed their commitment to the Joint Comprehensive Plan of Action on Irans Nuclear Deal (JCPOA).

An unnamed official from the Russian government confirmed Russias $50-billion investment plans to the Financial Times. A Russian oil company has signed an agreement with Iran worth $4 billion, Velayati said, without specifying the name of the company. He added that the deal “will be implemented soon.”

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Russian energy giants Rosneft and Gazprom are also in talks with the oil ministry of Iran to potentially sign deals worth up to $10 billion, according to an Iranian official. Earlier this year, an agreement was inked by a local Iranian company, Dana Energy, in a consortium led by Russias Zarubezhneft, with the National Iranian Oil Company (NIOC). They seek to redevelop the Aban and West Paydar oilfields, with a total capital expenditure estimated at around $740 million.

Russias Energy Minister Alexander Novak said on Friday that Moscow was studying all legal implications of a possible deal with Tehran, under which Russia would provide goods to Iran in exchange for oil.

Meanwhile, the European Union fears that billions of dollars' worth of trade could be jeopardized as a result of Washington's new sanctions on Iran. The bloc has asked Washington to grant exemptions to European companies but the US has rejected the appeal, saying exemptions would be made only if they benefited US national security.

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