Iran is ready to swap oil with investments in the energy sector, oil minister Javad Owji told parliament on Sunday, as US sanctions prevent large-scale exports.

Owji in a meeting with parliament’s industry and mining committee promised that “good news” is on its way and Iran is ready to barter oil with merchandise and investments.

The oil ministry’s website quoted Owji as saying, "Soon, good news will be announced about the diversity of contracts for crude oil, gas condensate and oil barter."

US sanctions imposed since 2018 not only have banned third parties from buying oil from Iran but have also threatened banks with penalties if they do business with Iran. Even if a company or a country buys crude oil form Iran it would face serious hurdles in making payments through the international banking system.

It appears that China is the target of Owji’s investment marketing push. In September the oil minister said that Iran needs $145 billion in investments to improve its fossil fuel industry in the next 4-8 years and underlined the importance of making deals with Chinese companies.

China is a diplomatic ally of the Islamic Republic but so far it has avoided openly challenging US sanctions. By all indications China is clandestinely importing hundreds of thousands of barrels of crude a day via third party channels, but Iran gains little from this trade as intermediaries take most of the profits and often deliver goods instead of cash.

Owji particularly mentioned the need to make investments in its South Pars gas fields in the Persian Gulf, as production as flattened while its domestic demand has risen. Serious power cuts in the past year have crippled industrial production and angered residential customers. Officials have warned of widespread electricity shortages this winter.

Despite past attempts by Iran to lure investments from Chinese energy companies, two major players Sinopec and CNPC made a total of just $4.4 billion investments between 2007-2016. In contrast, investments in Saudi Arabia’s energy sector have reached tens of billions of dollars in the past two decades.

Former oil minister Bijan Zanganeh had said that that the crude production sector needs $20-25 billion of investments annually and if this amount does not materialize, the industry will face disruptions.

In principle, all this could change if the United States reaches a nuclear agreement with Iran and lifts sanctions. But in that case Tehran would be tempted to export its crude oil for cash to make up for depleted foreign reserves and immediate needs it faces to finance government operations with a 50 percent deficit and support its battered currency, which has fallen eightfold since 2017.

With an estimated $60 billion of annual energy, food and other subsidies and handouts to citizens and industries, Iran has failed to upgrade its oil and gas infrastructure. Given the political danger in abolishing the subsidies, it is hard to see how the country could invest tens of billion of dollars in its energy sector.