Russian Oil Firm Could Sign Fuel-For-Diamonds Deal In This African Nation

Authored by Tsvetana Paraskova via OilPrice.com,

Russian oil firm Tatneft could strike a deal with Zimbabwe to supply fuel to the crisis-stricken African country in exchange for diamonds, the Zimbabwe Independent reported on Friday, describing the potential deal as ‘murky’ because Zimbabwe’s Minister of Mining, Winston Chitando, told the news outlet that he was not aware of any such development. 

“It is the first time I am hearing of that. The bottom line is that it is not true. I maintain that it is not true,” Chitando told the Zimbabwe Independent.

The potential deal, reportedly worth US$1.4 billion, would see Russia’s Tatneft ship in fuel to Zimbabwe via the Port of Beira in Mozambique, according to the Zimbabwe Independent.

Last week, Tatneft’s general director Nail Maganov told Russia’s news agency Interfax that Tatneft was indeed working on an agreement to supply fuel to Zimbabwe as part of a fuel-for-diamonds deal.

“We are working on this issue. I want to say that this is a real thing… I know that the fuel supply is real,” Maganov told Interfax on the sidelines of the World Economic Forum in Davos last week.

Previous reports had it that Russia’s diamond mining giant Alrosa would also be involved in the deal.

Alrosa is not part of this fuel for diamonds scheme, Alrosa’s press service told Interfax last week. 

Zimbabwe is looking at alternatives to buying fuel amid a raging economic crisis and hyperinflation, where fuel, food, basic commodities, and necessities are scarce, while a currency shortage doesn’t allow the authorities to buy fuel on the free market.

Zimbabwe also faces a hunger crisis due to drought, the World Food Programme (WFP) said in December. The economy is in tatters, and Zimbabweans are going hungry and cannot afford basic necessities amid the hyperinflation.

A fourth-month-long doctors’ strike over pay and poor conditions also added to the long list of problems in Zimbabwe.