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Russia gives the Taliban government a discount on wheat and oil products

Russian Foreign Minister Sergei Lavrov at a meeting with the Taliban delegation
Russian Foreign Minister Sergei Lavrov at a meeting with the Taliban delegation. File Image

The Taliban leadership in Afghanistan has signed an arrangement with the Russian government to receive wheat, liquefied natural gas, diesel fuel, and gasoline. Likewise, Moscow provided the Taliban with a discount relative to global pricing, reports Reuters, in reference to the Taliban’s acting Minister of Industry, Nuriddin Azizi.

The agreement between Russia and Afghanistan for the provision of fuel, gasoline, LNG, and food has been tentatively agreed upon, and specifics are now being discussed, informed Russian Presidential Representative Zamir Kabulov to the media.

Russia classifies the Taliban as a terrorist organisation. Since the collapse of the internationally recognised government of Ashraf Ghani, however, the movement has held power in Afghanistan for more than a year. Russia is one of the few nations maintaining an open embassy in Kabul. Taliban delegations visit Russia regularly, including the St. Petersburg international business forum.

According to Azizi, Russia agreed to supply Afghanistan annually with two million tons of wheat, one million tons of diesel fuel and gasoline, and 500,000 tons of liquefied natural gas. He declined to reveal the total value of the agreement and mentioned only the discount.

It is unclear how the purchase will be paid for. The Taliban regime is essentially shut off from the world banking system due to sanctions. The arrangement with Moscow is the Taliban’s first known big contract since assuming control. Previously, Washington announced the establishment of a special fund that would receive a portion of Afghanistan’s frozen funds to pay for the purchase of essential items for the nation.

The financing of terrorists is prohibited by several articles of the Russian criminal code. A year ago, in October 2021, Russian President Vladimir Putin stated that Russia’s position was to move towards removing the Taliban from the list of terrorists.

Russia and Afghanistan on economic cooperation

The negotiations between Russia and Afghanistan on economic cooperation began on August 15, 2022, as per Ria Novosti. Representatives of the Taliban offered to buy about a million barrels of oil from Russia. They were also interested in the supply of grain and sunflower oil. Minister of Industry and Trade of Afghanistan Nuriddin Azizi said that the oil and gas project is the most vital.

A year ago, Taliban militants took control in Kabul, the group was designated a terrorist organisation in Russia, and its activities were prohibited. The Taliban movement is also subject to UN sanctions for terrorist actions.

This does not preclude Moscow from doing business with the Taliban, who also attended this year’s St. Petersburg International Economic Forum.

Speaking to Ria Novosti, the Russian Ambassador to Kabul Dmitry Zhirnov said that the Taliban is “a reality that cannot be avoided.” 

“Therefore, we must work with them where it suits our interests and where it is required to solve the tasks facing Russia,” Zhirnov said.

At the beginning of June, the European Union introduced a partial embargo on Russian oil, which will be fully operational from December 5. Against this background, Moscow began to reorient itself toward the Asian market. At the same time, at the site of the St. Petersburg International Economic Forum, the Taliban announced plans to purchase about 5 thousand tons of Russian oil (about 90,000 barrels) and 2 million tons of grain.

Lithium and TAPI Pipeline

According to the agency, if Russia is interested, oil supplies may be exchanged for Afghan commodities. The kind of goods Afghanistan could provide products was not indicated.

The Taliban may be able to offer mineral deposits to Russia. Everyone considers Afghanistan to be the world’s future lithium capital. There is an abundance of lithium, uranium, oil, natural gas, coal, precious stones, and gold. The only thing lacking is security.

A sufficient production and energy base is required to extract the resources, but this is not the case. No production, no base, and no industrial workers exist. Someone must go into the Afghan wilderness to collect lithium before the first ISIS or Taliban strike. Even the Chinese avoid taking chances. China once operated copper mines in Afghanistan during the Ashraf Ghani administration.

Another important project is the Pakistan Stream gas pipeline project, earlier called the TAPI pipeline project. In a March interview with TASS, the Russian ambassador to Asghbat, Alexander Blokhin, said that Russian firms are interested in executing the TAPI project. This natural gas pipeline is important to India, Afghanistan, Pakistan, and Turkmenistan.

The ambassador emphasised that Russian businesses had previously provided pipes for this gas pipeline, a portion of which was built across Turkmenistan last year, adding, “it was a $300 million project at the time.”

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