Reports that Russia and Iran were negotiating a multi-billion dollar backdoor trade deal that could undermine upcoming nuclear negotiations with Tehran is a matter of "serious concern", the White House admitted last night.
The $1.5 billion-a-month oil-for-goods deal was first revealed in news reports last week and threatens to undermine the credibility of White House claims that Iran would receive only $7bn in phased and reversible sanctions relief in exchange for nuclear concessions, experts said.
In a sign of the potential seriousness of the sanctions-busting agreement, John Kerry, the US secretary of state has personally raised the issue of the deal with his Russian counterpart Sergei Lavrov, the White House added.
Mark Dubowitz of the Foundation for Defence of Democracies, a think-tank that released a report last week showing Iran's economy already starting to recover, said Russia's actions were a "serious challenge" to Mr Obama's pledge to vigorously enforce existing sanctions.
"The administration is facing a real test from Moscow which, if not addressed, will embolden other sanctions busters and make it more difficult to resolve peacefully the Iranian nuclear crisis," he said.