© Agence France-PresseA picture released by the Iranian President's website shows Iran's first offshore oil platform in the Caspian Sea
Under the terms of a five-year accord, Russia will help Iran organise oil sales as well as "cooperate in the oil-gas industry, construction of power plants, grids, supply of machinery, consumer goods and agriculture products", according to a statement by the Energy Ministry in Moscow.
The Russian government issued a new statement on Wednesday after mysteriously withdrawing a similar release on Tuesday.
Russian Energy Minister Alexander Novak said on Wednesday that his government will help Iran bring its oil to market. In return, Iran wants to imort power and pump equipment, steel products such as pipes, machinery for its leather and textile industries, wood, wheat, pulses, oilseeds and meat.
Iran "is also interested in the joint construction of power generation and development of coal deposits", Mr Novak added.
Further talks between the two countries will take place next month, he said.
A deal could see Russia buying 500,000 barrels of Iranian oil a day, the Moscow-based Kommersant newspaper has previously reported. That would be about a fifth of Iran's output in June and half its exports.
There's a question over "how substantive this memorandum is", Richard Mallinson, an analyst at Energy Aspects in London, told Bloomberg. "There would be various practical limitations in terms of Iran's current production capacity, geography and shipping logistics, as well as US sanctions."
The move is a win-win for both nations after they were hit with Western sanctions aimed at limiting their energy sectors.
The European Union recently unveiled a raft of measures to restrict certain oil exploration and oil drilling related products in Russia after what President Barack Obama called the country's "illegal actions" in Ukraine. Russia's prescence in the Eastern European country reached a watershed moment last month when Malaysia Airlines Flight MH17 was allegedly shot down by rebels sympathetic to Mr Putin's government, killing all 298 people on board.
Comment: This fanciful propaganda does not seem to go away despite the evidence:
Flight MH17 - What You're Not Being Told
On Tuesday, the Russian President told regional leaders that "the political tools of economic pressure are unacceptable and run counter to all norms and rules", adding that he had given orders to boost domestic manufacturers at the expense of non-Russian ones.
Meanwhile, Iran has faced sanctions due to its reluctance to end a controversial nuclear programme. The country has been locked in talks with six world powers - Britain, China, France, Russia, the US and Germany - to reach an understanding, with an interim deal to lift a ban on sales to the EU and limiting them to Asia agreed in November. However, since then talks have stalled, causing Iran's petroleum exports to halve in the past two years, according to OPEC.
Despite the sanctions, Iran has been looking to boost oil production in recent months, setting a new output target of 5.7m barrels per day (bpd) of crude by 2018 - OPEC believes Iran is currently pumping about 3m bpd of crude. However, it needs the help of international oil companies, and Russian energy firms have repeatedly expressed an interest in teaming up with Iran.
Alexander Novak, Russia's minister of energy, said an agreement would not violate international obligations and is important given the current "reality".
The White House has previously said that reports of talks between Russia and Iran were a matter of "serious concern".
"If the reports are true, such a deal would raise serious concerns as it would be inconsistent with the terms of the agreement with Iran," Caitlin Hayden, spokeswoman for the White House National Security Council, said in January.
No Fly Zone: Moscow may force European airlines to fly around Russia [Link]
"...The Russian business daily Vedomosti quoted unnamed sources as saying the foreign and transport ministries were discussing possible action which might force EU airlines into long and costly detours and put them at a disadvantage to Asian rivals.
Russia may restrict or ban European airlines from flying over Siberia on busy Asian routes, a newspaper reported on Tuesday, following Western sanctions which have grounded one Russian carrier and a billionaire's private jet....
At the height of the Cold War, most Western airlines were barred from flying through Russian airspace to Asian cities, and instead had to operate via the Gulf or the U.S. airport of Anchorage, Alaska on the polar route....
Vedomosti quoted one source as saying a ban could cost carriers including Lufthansa, British Airways and Air France 1 billion euros ($1.3 billion) over three months. Restrictions would lead to longer flights, higher fuel use and other additional costs." [...]